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Published in Economic Development
Whitmer’s proposed multi-million dollar plan focuses on raising wages, childcare, small biz PHOTO: Kate Carlson

Whitmer’s proposed multi-million dollar plan focuses on raising wages, childcare, small biz

BY Thursday, June 03, 2021 05:33pm

GRAND RAPIDS — Gov. Gretchen Whitmer unveiled a multi-million dollar plan Thursday that targets boosting wages, helping small businesses and providing access to childcare.

Whitmer talked about the Michigan Economic Jumpstart Plan at a press conference alongside small business owners and city leaders at the Grand Rapids Opportunities for Women building in downtown Grand Rapids. 

Under the plans, which in part would require approval of the state Legislature, the state would give employers incentives to raise wages for workers to help companies improve their recruitment efforts, as well as offer additional lifelines to the most affected small businesses during the pandemic. As well, the proposal also would expand the state’s investment in free and affordable childcare programs to help encourage more workers to return to the workforce, building on a program first piloted and backed by businesses in the Grand Rapids area. 

“With billions of dollars from the federal government to aid our recovery, we now find ourselves where we once predicted would be at about a $3 billion shortfall, we are at a $3.5 billion surplus,” Whitmer said. “That’s a pretty remarkable change of fortunes here in Michigan, which means we’ve got some opportunities to make some investments in ways that really lift people up and help small businesses and help us get back to normal.”

Under the plan, $300 million will go to businesses on a first-come, first-served basis in the form of grants to fill the gap so they can raise workers’ wages to $15 an hour. The grants would cover the first three months of the pay raise if businesses commit to retaining the employees and continue the $15 per hour wage for at least three more months. 

Whitmer’s Jumpstart plan would provide $120 million to the Michigan Reconnect initiative, which offers a tuition-free credential or certificate for anyone 25 years old or older. Another $60 million would go toward the Future for Frontliners program.

“By bumping up pay and increasing education and skills opportunities for workers, we can entice more people to get back into the workforce and increase our labor participation rate,” Whitmer said.

Michigan’s unemployment rate for the month of June stood at 4.9 percent, better than the national average of 6.1 percent, according to data from the U.S. Department of Labor.

“If the legislature acts, businesses will also be able to bring in new employees part-time without them losing their unemployment benefits,” Whitmer said.

The governor did not disclose a dollar amount, but also said she is proposing an expansion of Michigan’s Work Share program. The Work Share program offers employers a tool to avoid laying off workers and became a popular option in the early days of the pandemic, as MiBiz previously reported

Mainstreet Initiative

Part of the Jumpstart plan includes the Michigan Mainstreet Initiative, which would allocate $300 million for small businesses in the form of restart grants, microenterprise grants and SmartZone funding. 

This would include an investment of $100 million to help restaurants and other place-based businesses in the form of grants of up to $20,000 that they could use to pay for mortgages, rent, taxes, payroll and operating expenses. Of the $100 million, $25 million would be earmarked for small businesses with fewer than nine employees, which accounts for more than half of the businesses in Michigan.

The Mainstreet Initiative also would include a $125 million investment for grants to businesses that either did not qualify or did not apply for other incentives such as the federal Paycheck Protection Program. Another $75 million would go toward the Michigan Small Business SmartZones and Business Accelerator and Resiliency Initiative, providing grants for startups to support traditional commercial corridor or main street businesses, as well as provide opportunities for new businesses, including covering basic startup costs.

Whitmer also said the Unemployment Insurance Agency would hire 50 additional full-time staffers to help meet the expected surge in demand ahead of the state ending a waiver for work search requirements for people receiving unemployment benefits. 

Childcare

In Whitmer’s executive budget recommendation, she proposed a $370 million investment to expand access to no-cost or low-cost childcare for 150,000 more families. The governor’s plan would temporarily increase the income eligibility threshold from 150 percent to 200 percent of the federal poverty line, waive out-of-pocket copays through the 2022 fiscal year, and provide a 10-percent increase in hourly rates for childcare providers.    

As a business owner who is a mother, Alita Kelly, founder of South East Market, said she is grateful for the acknowledgement of the importance of childcare in the governor’s funding plan.

“We know we’re not alone in facing these obstacles,” Kelly said.

Working family members are facing barriers to re-enter the workforce because of a prevalent lack of access to childcare, Whitmer said.

“Working parents, especially women, have been forced to reduce their hours or leave the workforce to take care of their kids,” Whitmer said. “Some are working a double shift, working a day job and then trying to support virtual school. Neither are sustainable in the long run.”

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