Rep. Steele, R-Orion Township, voiced strong opposition to the ruling, emphasizing the potential harm to local, family-owned restaurants. “This ruling will wreak havoc on our businesses and their employees. We must not treat California like a roadmap for Michigan. We need to learn from their mistakes and stop this before food prices are so high that families can’t afford to go out to eat,” Steele stated.
She highlighted the unique challenges faced by local restaurants in downtown Lake Orion, which are owned by community members and provide employment to thousands. Steele warned that without legislative intervention, many vulnerable workers could lose their primary source of income.
Historical Context and Legislative Response
The controversy stems from the 2018 legislative session when the Michigan Legislature adopted citizen-initiated laws to increase the minimum wage and introduce a new paid sick leave rule. However, the Legislature amended these laws to balance the intentions of the initiatives with the economic realities faced by small businesses. Progressive groups subsequently sued the state, arguing that the “adopt and amend” practice was unconstitutional, leading to the current Supreme Court ruling.
Voices from the Industry
Drew Ciora, owner of 313 Pizza in Lake Orion, expressed his concerns about the financial strain these changes would impose on both owners and customers. “If these changes go into effect, the average bill at my restaurant will rise from $22 to $30 a person. This will be devastating for our industry. Large national franchises may be able to weather this storm, but it will be extremely difficult for smaller operations to survive. Thousands of mom-and-pop restaurants that have been around for generations will close, just like we saw during the pandemic,” Ciora warned.
Survey Results Highlight Economic Risks
Recent surveys by the Michigan Restaurant and Lodging Association underscore the potential fallout if the changes proceed:
66% of restaurant owners indicated they would be forced to lay off employees.
20% anticipated having to shut down entirely.
42% expected to cut operating hours.
Over 92% predicted they would need to hike prices, with many foreseeing increases of 20% to 25% by early 2025.
Additionally, 82% of Michigan restaurant servers expressed a preference for maintaining the tipping system, with 79% fearing job loss if the tip credit were eliminated.
Call to Action
Rep. Steele’s call for legislative action underscores the urgency of addressing the potential economic crisis. “The businesses that will suffer most are local restaurants like we see in downtown Lake Orion. These operations are owned by our friends and neighbors and employ thousands of people. We won’t just be losing businesses. The most vulnerable among us will be losing their primary source of income if lawmakers don’t make a stand and stick up for the people we represent,” Steele emphasized.
Conclusion
As Michigan prepares for the implementation of the Supreme Court’s ruling, the focus now shifts to the Legislature’s response. Lawmakers face the critical task of balancing fair wages with the economic sustainability of small businesses and protecting the livelihoods of thousands of service industry workers. The coming months will be pivotal in determining the future of Michigan’s hospitality industry.
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