The minimum wage has gotten a boost in Michigan, the latest in a growing number of states where lawmakers voted this year to raise the wage.
The state's hourly minimum wage will increase in phases from $7.40 until it reaches $9.25 in 2018.
The legislature passed the bill Tuesday and Republican Gov. Rick Snyder signed it into law.
"I commend my partners in the Legislature for finding common ground on a bill that will help Michigan workers and protect our state's growing economy," said Snyder.
The law will also tie the minimum wage to inflation, so that it will continue to gradually increase after 2018.
While setting minimum wage at $9.25 brings it well above the federal rate of $7.25 per hour, Michigan lawmakers did not go as far as those in some other states.
Vermont's legislature approved a bill earlier this month that raises the minimum wage to $10.50 by 2018, while Maryland lawmakers raised it to $10.10 by the same year. Lawmakers in Minnesota, Delaware, West Virginia, Connecticut and Hawaii have also approved minimum wage raises this year.
A minimum wage hike to $10.10 at the federal level is supported by Democrats and President Obama, but is stalled in Congress. Opponents argue that raising the minimum wage forces businesses to cut workers' hours and jobs.
In Michigan, the wage hike received bipartisan support in the legislature. Two years ago, thousands of demonstrators camped outside the state house protesting a controversial change the bargaining rights of public workers.