In Michigan, a minimum wage hike that ‘undercuts democracy’

May 16, 2014, 6:24 PM UTC

FORTUNE — By a bipartisan 24-14 vote, the Michigan State Senate passed a bill on Thursday to increase the state’s minimum wage from $7.40 to $9.20 an hour.

Good news right? Well, not everyone thinks so.

The bill, introduced by Senate Majority Leader Randy Richardville last week, will gradually increase the minimum hourly wage to $9.20 by 2017; the minimum wage for tipped workers, which is often lower than that of other workers, will increase from $2.65 to $3.50.

Richardville, a Republican, originally proposed a minimum wage of $8.15, but Democrats balked at that figure, so the parties settled on $9.20.

But in passing this legislation, the state’s Senate has undercut what had been a growing movement to put a $10.10 minimum wage for all workers to voters as a ballot initiative in November.

Raise Michigan, a coalition of civil rights, faith, labor, and community groups, said earlier this week that, four months into its campaign, it had collected the required 258,000 signatures to put the minimum wage hike to a constituent vote this fall. But the bill that the Senate approved yesterday — should it pass the Republican-controlled House and gain a signature from Republican Governor Rick Snyder — will repeal Michigan’s current minimum wage law and replace it with one that raises the minimum wage to $9.20. That will render Raise Michigan’s petition toothless since the signatures it collected endorsed changing the existing minimum wage law — one that will no longer exist if Richardville’s bill succeeds.

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“We know first-hand that if we didn’t launch this campaign and come within reach of forcing a vote, this wouldn’t be happening,” says Dave Woodward, a commissioner in Oakland County, Mich. and a member of Raise Michigan. “The [Senate] bill undermines democracy. We feel that it’s unconstitutional, not only to overturn the will of the people but to prevent the people of Michigan from voting on things that are important to them,” he says.

Richardville told Fortune on Friday that Raise Michigan should be given credit for bringing up the issue and showing that voters supported a higher minimum wage. “We reacted to the fact that so many people were interested in a way that was better written and more proactive so business owners knew what to expect,” he says.

Richardville took issue with Raise Michigan’s proposal to give tipped workers the same minimum wage as other workers and to eliminate the state’s lower minimum wage for youth workers — changes that he says would have been “catastrophic” for the state’s restaurant and tourism industries. “That would have been devastating to some segments of the economy, so we came up with a better solution,” he says, emphasizing that the bill passed with bipartisan support.

Although the Senate vote on Thursday met Raise Michigan’s main objective in that it raised the minimum wage, the coalition argues that an hourly rate of at least $9.50 is necessary to make a real dent in the state’s poverty rates.

Ten of the Michigan Senate’s 12 Democrats voted in favor of the bill on Thursday. Robert McCann, spokesperson for the Senate Democrats, says that members of the minority party were simply trying to make the most of a bad situation. “The Republicans were going to kill the ballot drive with our without our support,” McCann says. “Our question at that point was, ‘Do we oppose this and watch it go through as a token increase or try to do something about it?'” McCann says that, through negotiation, Democrats managed to increase the $8.15 minimum wage that Richardville initially proposed to $9.20 and tack on an automatic cost of living increase that will go into effect in 2018.

Members of the coalition who oppose Richardville’s bill point out that Thursday’s vote wasn’t the first time the state’s GOP leadership has taken action to upend ballot initiatives. In 2012, the Senate approved a law that gave the state’s financially distressed cities and school districts a choice between filing for bankruptcy or the appointment of a state-appointed emergency manager. The vote took place a month after voters repealed a similar law during the November 2012 election. In May 2013, Governor Snyder signed a law that legalized Michigan’s first-ever gray wolf hunt and — in doing so — undercut a statewide referendum sought by opponents of the hunt.

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Richardville says that ballot initiatives have their place, but if voters pass a proposal, it goes into law as it’s written on the ballot. The language in ballot initiatives often doesn’t address all of the new law’s potential consequences. “So we’d rather be proactive and get real solutions out there,” he says

McCann, meanwhile, says Richardville’s bill is part of a larger pattern of Republican leaders trying to “ignore or silence the voters.”