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Senate Majority Leader Randy Richardville, R-Monroe

(Fritz Klug | MLive.com)

LANSING, MI -- Business groups would prefer to see Michigan's minimum wage stay where it is, but they're now signalling support for a modest increase if it means avoiding a larger hike.

Legislation introduced last week by Senate Majority Leader Randy Richardville (R-Monroe) would increase Michigan's minimum wage from from $7.40 to $8.15 per hour for most workers and from $2.65 to $2.93 for tipped employees.

It would do so by repealing and replacing the state's existing minimum wage law, a move that could undermine a statewide petition drive seeking to gradually raise the hourly rate to $10.10 an hour for all employees, giving tipped workers an 85-cent raise each year until they reach parity.

Democrats and other ballot proposal backers blasted Richardville's bill on Tuesday, calling it an attempt to work around the will of some 258,000 voters who have already signed the petition. But key business leaders began to offer support.

"Ideally, the minimum wage is an issue that would be addressed at the federal level by Congress, but if that's not going to happen, we think it's more appropriate for elected officials to address the issue through the legislative process," said Michigan Chamber of Commerce President and CEO Rich Studley.

"We don't believe in government regulation by petition drive. We're open to the idea that Senator Richardville is exploring."

While supporters say a $10.10 minimum wage would lift workers out of poverty and reduce their dependence on government services, critics say it could ultimately force business owners to cut jobs.

Studley called the potential ballot proposal "a jobs killer, especially for employees in the restaurant industry," and said be believes it is appropriate for the Legislature to look at "alternatives that are less damaging and less harmful."

Charlie Owens, state director of the National Federation of Independent Businesses, had originally opposed any minimum wage increase but said his members are now willing to consider a small bump to avoid a bigger one.

"We're just trying to make the best of a very bad situation," Owens said, going on to dismiss Democratic complaints about the democratic process and allege that the petition drive is being driven by outside special interests.

"The Democrats -- through their proxies in organized labor, big labor, the Restaurant Opportunities Center -- are trying to go around voters by buying the signatures they need to get on the ballot," Owens said. "That's the pot calling the kettle black as far as we're concerned."

The Raise Michigan coalition includes several community and worker advocacy groups, including a local chapter of the Restaurant Opportunities Center, a national group that reportedly has drawn the ire of big business with its aggressive tactics.

The National Employment Law Center of New York, a non-profit that is backing minimum wage proposals in several states, also donated $50,000 to effort, according to recent campaign finance documents.

Danielle Atkinson of Mothering Justice, one of the local groups backing the ballot proposal, noted that the coalition partners were active in Michigan before the petition drive and each have "roots" in the state. The group is using a combination of paid petition circulators and local volunteers.

Raise Michigan has already collected more than the minimum number of signatures required to advance the citizen-initiated legislation, Atkinson said Tuesday. The coalition will continue to collect more before turning in petitions at the end of the month -- whether or not Richardville pushes ahead with his legislation.

"We are committed to the people who have already signed this," said Atkinson. "It's very clear we have overwhelming support for raising the minimum wage to $10.10 an hour. We have a commitment to people who have volunteered their time after working minimum wage jobs. We don't think it's morally right to stop the initiative at this point, especially when we're so close to the finish line."

Business organizations are concerned that the petition drive proposal would index the wage to allow future increases, and they're especially concerned that it would eventually move restaurant workers from $2.65 an hour plus tips to the $10.10 rate.

That could be a big blow for the restaurant owners, according to Justin Winslow of the Michigan Restaurant Association, who said the industry typically operates at just a four percent profit margin.

While President Barack Obama has called for a $10.10 federal minimum wage and various states are considering similar rates, Winslow said Michigan is "the only place in the country" with an active ballot proposal seeking rate parity for tipped employees.

The restaurant group is still studying Richardville's bill, but Winslow called it "a more reasonable approach" to a minimum wage increase. "We're willing to at least entertain that concept as opposed to the petition drive," he said.

Atkinson argued that restaurant workers in states without a distinct tipped wage rate, such as California, are more likely to live at or above the federal poverty level, which is why the ballot proposal would gradually move Michigan in that direction.

"The culture of tipping would not change," Atkinson said, "but the the culture of restaurant workers living in poverty, we hope to change that."

Richardville isn't the only Republican now pushing a small minimum wage increase this year (although he is the most powerful). State Sen. Rick Jones of Grand Ledge and Rep. Margaret O'Brien of Portage have also introduced minimum wage bills that would amend current law rather than replace it.

Sara Wurfel, a spokesperson for Republican Gov. Rick Snyder, said the governor is "open to having a discussion" about the minimum wage but has not yet seen Richardville's proposal and is more focused on creating new jobs.

Jonathan Oosting is a Capitol reporter for MLive Media Group. Email him, find him on Facebook or follow him on Twitter

