Michigan Republicans repeal prevailing wage law

Republican lawmakers in Michigan for years have wanted to repeal a law they say makes state construction projects more expensive.

On Wednesday, they got their chance.

Michigan’s GOP-majority House and Senate adopted a citizen petition to repeal the state’s more than 50-year-old prevailing wage law, which generally requires union-scale wages and benefits be paid on state construction projects.

“For the first time in over 50 years, the heavy hand of government favoritism will no longer overcharge Michigan taxpayers to build their schools and public buildings,” said Jeff Wiggins, president of the Protecting Michigan Taxpayers ballot committee, which wanted the Republican-led legislature to handle the repeal.   

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“Despite the lies, deception, and desperation from those looking to maintain their special interest carveout, the time-honored notion of fair and open competition has won the day.”

The vote was blasted by Democrats and union-backed labor groups, who shouted angrily in the chamber after the vote tally was read. Union groups in the gallery yelled profanities and vowed to vote out lawmakers who voted for repeal.

“There are few things more offensive and disheartening to the general public than politicians who speak out of both sides of their mouths,” said Rep. Tim Greimel, D-Auburn Hills.

“And yet, when it comes to the prevailing wage debate, the proponents of this legislation, of this initiative, have long said that there is a shortage of skilled trades professionals, skilled trades workers, in this state,” Greimel said. “And yet, this very initiative would lower wages for that work.”

The Senate adopted the petition by a 23-14 margin. All 10 Democrats were joined by four Republicans in opposing the prevailing wage repeal, including Sens. Mike Nofs, of Battle Creek; Tory Rocca, of Sterling Heights; Dale Zorn, of Ida; and Tom Casperson, of Escanaba.

The House voted 56-53 to repeal prevailing wage, with several Republicans joining Democrats in opposition.

GOP legislators have tried before to pass bills that would have repealed the prevailing wage in Michigan. But their efforts were stymied by Gov. Rick Snyder, who opposed repeal in large part because his administration has been focused on increasing skilled trades careers.

The effort this year was led by Protecting Michigan Taxpayers, which recently submitted hundreds of thousands of valid signatures from registered Michigan voters and had its petition certified by state canvassers after the Michigan Court of Appeals ruled in its favor.

As a legislative ballot proposal, it first goes to the Legislature for the first shot at adopting it. As a result, voters will not have an opportunity to decide in November on whether to repeal the law.

Citizen petitions also are immune from Snyder’s veto.

“That is disappointing in some ways. Again, I think that’s one of the reasons that strategy was taken,” Snyder told reporters last week during the Detroit Regional Chamber’s annual policy conference on Mackinac Island.

Even so, he said then, he’s not actively lobbying lawmakers to vote against it: “I’ve made my opinion known, and so legislators can look at that.”

On the floor Wednesday, Democrats urged Republicans to send the petition to the November ballot and allow voters to decide. GOP legislators pushed back against the idea that they were denying the public a voice.

“The fact is, the initiative that we have before us today was given to us by the people to eliminate a government-mandated carveout,” state Rep. Lee Chatfield, R-Levering, said on the House floor. “Let me remind you that carveout takes away money from our schools, that carveout takes away money from our roads and that carveout picks winners and losers.”

The debate over prevailing wage is, in many ways, a debate about organized labor.

Opponents of prevailing wage, generally non-union contractors, say the law artificially inflates the cost of taxpayer-funded projects. Union-backed contractors tend to support the law and say repealing it would lower wages and weaken the attractiveness of worker training programs, including apprenticeship and training programs they run across the state.

Both sides have data that back up their arguments.

Proponents of repeal cite a 2013 report from East Lansing-based Anderson Economic Group, commissioned by Associated Builders and Contractors of Michigan, which represents mostly non-union contractors. It found Michigan taxpayers could have saved $224 million per year — and $2.2 billion in total — on K-12 and higher education building construction from 2002 to 2011 if prevailing wage didn’t exist.

That was partly due to an assumption that prevailing wage inflated pay rates by 25 percent, the report says, though its findings later were challenged in a separate report commissioned by prevailing wage supporters.

Prevailing wage supporters also cite a January study by Midwest Economic Policy Institute which found that a 2015 repeal of a “common construction wage” in Indiana lowered wages of construction workers by an average of 8.5 percent and “had no statistical impact on the average cost per public school project in northern Indiana.”

“This is not a partisan issue. This is an issue that can and will negatively impact the workers, the businesses and the economy,” said Tom Lutz, executive board member of the Michigan Regional Council of Carpenters and Millwrights and financial secretary of Interior Systems Local 1045.

Union groups fear out-of-state contractors will come into Michigan and bid on public building projects at the expense of quality and safety, while workers in Michigan leave for other states that pay higher wages.

“We are in a worker shortage,” Lutz said. “This will produce a worker crisis.”