Senate Considers Repeal of Michigan’s Prevailing Wage Law

“Prevailing wage laws are the best deal for taxpayers. A PWL keeps construction costs down by promoting a high-skilled, high-quality construction workforce that completes jobs on time, the first time.” — Frank Manzo IV, Director, Midwest Economic Policy Institute

Tomorrow the Senate Committee on Michigan Competitiveness will be meeting to discuss a package of bills to repeal the state’s prevailing wage law. GOP lawmakers consider this legislation so important that they were the first three bills introduced in this legislative session back in January — not by coincidence, on the same day Gov. Snyder delivered his 2015 State of the State address, where he emphasized the importance of promoting trades education. The three-bill package, SB-1, SB-2, and SB-3 ,would reverse fifty years of wage policy requiring contractors that receive state funds to pay workers at a union-scale rate. Repeal would impact only about 5 percent of construction jobs because the Depression-era federal prevailing wage law applies to all work drawing federal dollars, yet GOP lawmakers insist the savings would be vast.

The Anderson Economic Group claims the state’s prevailing wage law costs Michigan $224 million per year, but study after study catalogued at FairContracting.org refute those findings, citing backend higher costs as a result of employing under-skilled workers. A University of Utah study that looked at the fallout from the repeal of Kentucky’s prevailing wage law found numerous unintended and costly pitfalls:

“Lost skills and lost experience means greater risk of accidents, greater risks of work interruptions, greater risks that work is not completed on-time and greater risks that the work is done poorly requiring rebuilds and higher downstream maintenance costs.”

Other GOP-dominated states are also pushing for repeal of their laws. The Wisconsin Senate Committee on Labor and Government Reform tabled similar legislation late last week, but the measure could still find its way to the Senate floor without committee approval. They were using numbers provided by the Koch brother-backed Americans for Prosperity which conjured the wild estimate of $300 million in savings to be had. However, the Wisconsin Contractor Coalition disputes that figure, stating that wages are not driving-up construction costs, but building materials are.

Back in Michigan, Sen. Steve Bieda (D-9) explained to the Detroit Free Press “I think we’ve made a really strong case of why we need prevailing wage. It’s about worker safety and quality of work. You’ll be opening up projects to fly-by-night operations. I think it’s a shortsighted approach and an assault on working people.”

The data backs-up his claim. The comprehensive Kentucky study looked at a number of factors, among them the unintended costs involved when employing under-skilled workers at a lower wage. Disability costs alone spiked at an alarming rate.

Prevailing wage law states fewer disabilities

Prevailing Wage Law States Have More Experienced and Safer Construction Workers

A repeal of Michigan’s law does not sit well with Gov. Snyder who has expressed concern that it would conflict with his emphasis on trades education and would drive skilled workers out of the state. He’s been fairly clear he intends to oppose the measure — as recently as last week the governor’s spokesperson, Dave Murray, said “He didn’t support it in his first four years, and he doesn’t support it in his second term.” Doubters have been citing his flip-flop on right-to-work back in 2012, but as a lame-duck governor, he is much less likely to make any effort to politically appease this legislature.

The whole exercise smacks more of union-bashing than a serious attempt to shave labor costs. There is some concern that lawmakers will launch a petition drive for a ballot question to repeal the law. That too is political risky business in the wake of the voter spanking the legislature got over their goofy roads proposal last week.

DSCN0444Amy Kerr Hardin

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3 Responses to Senate Considers Repeal of Michigan’s Prevailing Wage Law

  1. Charles W Harris says:

    Governor Snyder needs to do more than merely to refuse to support such measures. He needs to decry them as short-sighted, wasteful and regressive. If necessary, he needs to veto any such legislation that comes across his desk. Otherwise, all of his promotion of skilled trades education is just so much hollow political jabber.

  2. Phil says:

    I support state prevailing wage but I have to call a “foul ball” on your figure 7 graphic.
    The y-axis for the blue columns should have started at zero – instead, they started at 23.4, thereby using visual perceptual cues to overemphasize the difference between 23.7 and 24.2. The difference in column height ought to be 2.1% of the first bar (.5÷23.7). Notice the graphic has the red bar starting at zero. This is one reason why people say some can “lie” with statistics.
    I know you didn’t design the graphic but don’t encourage them by posting.
    I do support prevailing wage.

    • admin says:

      Agreed, the graphic is clearly a mash-up of two disparate graphs. However, the differential of disabilities is on the order of about 12 percentage points, versus the law v. non-law separation of less than a point, so an expanded graphic would have more fully illustrated the depth of the problem. Thanks for your input.

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