(Source: MIRS.news, Published 08/20/2024) A new Small Business Association of Michigan (SBAM) survey shows businesses are still worried about inflation while also having anxiety over an increase in labor costs because of laws set to take effect in February.

The survey looked at 500 businesses and found that 93 percent have said their costs are higher than normal, while 78 percent said they’ve increased employee pay at least 5 percent over the past year.

“Michigan’s smallest operators are expressing concern and reporting a loss of confidence, ahead of new regulations on them that will hit in just six months,” said SBAM President Brian Calley.

Calley said half of the businesses in the survey were reducing their expenses to prepare for the reinstatement of the minimum wage laws and paid sick time when the “adopt and amend” was ruled unconstitutional by the Michigan Supreme Court. 

The survey found that 79 percent of small businesses offer paid time off.

The minimum wage laws are set to take effect starting Feb. 21, 2025, and be phased in to top off at $15 per hour by 2030. Minimum wage for tipped employees would also go from $3.93 to $5.90 per hour. 

“Small businesses are the most trusted institutions in our nation, and we know that people support their local economies as best they can. But the more the government increases costs, the closer to the cliff our small businesses are pushed,” Calley said.

The survey also found that overall optimism for Michigan small businesses was going down, with 37 percent being optimistic about the short-term prospects over the next six months. A total of 54 percent said they were optimistic about their long-term survival.

“The cliff is in sight now. In February, they’ll start to fall over it,” Calley said.