Written by Michael Szudarek

As we are halfway through Q1 2025, the political and economic landscape in Michigan presents both opportunities and challenges for businesses. With shifting legislative priorities and economic conditions in flux, businesses need to be flexible and adaptable in order to succeed. They should be prepared to adjust their strategies in response to evolving external factors. 

Michigan’s Political Overview

The 103rd Michigan Legislature began its session on January 1, 2025. Following the 2024 elections, the state now operates under a split government. Republicans gained control of the Michigan House of Representatives, while Democrats continue to hold the majority in the state Senate. Governor Gretchen Whitmer remains in office, leading to potential legislative negotiations that may shape business regulations and policies. Looking ahead, the 2026 gubernatorial race is already attracting significant attention, with Detroit Mayor Mike Duggan among the high-profile candidates who have announced they are running. Businesses should closely monitor these political developments, as they may lead to new policy directions impacting various industries.

Economic Considerations for 2025 — Key Legislative Changes

Several new laws are now in effect that businesses must understand and integrate into their operations:

• Earned Sick Time Act: Set to take effect February 21, 2025, this law expands employees' rights to accrue and use paid sick leave. Employers should review and update their leave policies to ensure compliance and implement systems to track accruals accurately.
• Minimum Wage Increase: Michigan's minimum wage is scheduled to increase to $12.48 on February 21, 2025. with the tipped minimum wage increasing to $5.99. Businesses must adjust their financial strategies to accommodate these changes, especially those with significant hourly workforces. ([1])

Economic Optimism and Challenges

Despite rising operational costs and workforce shortages, optimism prevails among Michigan’s small business community. A recent survey revealed that:

• 67% of small business owners expect higher profits in 2025. ([2])
• 66% anticipate increased sales over the next year. ([2])

However, addressing workforce shortages and managing operational expenses remain top priorities for many businesses.

Strategic Recommendations for Businesses

To successfully navigate the complexities of 2025, businesses should consider the following strategies:

1. Policy Compliance: Stay up to date with legislative changes and ensure timely compliance to avoid potential legal risks.
2. Financial Planning: Reevaluate budgets and pricing strategies to reflect increased labor costs due to minimum wage adjustments.
3. Talent Acquisition and Retention: Innovate recruitment and retention strategies to combat workforce shortages. Consider offering enhanced benefits or flexible work options to remain competitive.
4. Political Engagement: Monitor ongoing political developments and potential legislative shifts that may affect business operations and strategies.

Positioning for Success in 2025

Michigan’s political and economic landscape in 2025 is dynamic, but by staying informed, adapting strategies, and engaging with the broader political environment, companies can turn challenges into opportunities. At Marx Layne & Company, we specialize in guiding businesses through changing landscapes. Contact us today to discuss how we can help your business navigate its communications and policy opportunities in Michigan with confidence and strategic foresight.

[1] Detroit News, "Deal close on Michigan's minimum wage for tipped workers, key lawmaker says”
[2] Detroit PBS, "2025 Outlook for Small Businesses in Michigan"