Growing and strengthening west Michigan's middle class
LANSING May 13, 2015– The Republican-led state senate advanced a bill today that would repeal the state’s prevailing wage law. The prevailing wage requires companies pay workers union wages on government-funded construction projects.
UPDATE May 14, 2015: The state Senate passed a repeal of the prevailing wage law, 22-15. It now moves to the state’s House of Representatives.
In addition to eliminating prevailing wage, the bill’s sponsor added language that would prevent Michigan’s voters from reinstating the prevailing wage with a ballot proposal.
The Michigan Competitiveness Committee advanced the three-bill repeal package on Wednesday morning in a series of 4-1 votes, and it’s possible the full Senate could take up the bills as soon as Thursday.
A $75,000 appropriation added to Senate Bill 3 would help the state “implement and disseminate information” about repeal, according to sponsoring Sen. Dave Robertson, R-Grand Blanc Township.
But the provision raised eyebrows because it would also make the measure immune to repeal via public referendum.
“If we truly believe it costs $75,000, we should look for it in the budget that is before us and keep politics out of it,” said Sen. Rebekah Warren of Ann Arbor, the lone Democrat and only “no” vote on the panel.
Republican Gov. Rick Snyder has made clear he’s not interested in repealing the state’s prevailing wage law, and a spokeswoman said Wednesday morning he has not changed his position.
But prevailing wage repeal has long been a top priority of Senate Majority Leader Arlan Meekhof, R-West Olive, who sponsored the first bill in the package and testified in support of the proposal.
“I believe repealing prevailing wage will result in millions of taxpayer dollars being saved,” said Meekhof, who argued mandated wage rates have inflated the costs of public works projects. “A less expensive price tag for construction means that communities are financing less, savings taxpayers money over the life of that asset.”
The potential savings of prevailing wage repeal was the subject of great debate on Wednesday, with each side of the issue citing studies to back up their claims. Warren, in particular, challenged projections from Meekhof and other repeal advocates.
“What the studies actually show is that the increased productivity, the lack of missing deadlines and having to come back and renegotiate, actually ends up saving money in the long run,” said Warren.
Prevailing wage supporters say the law ensures a level playing field in the bidding process and a fair wage for workers. They argue repeal would undercut Snyder’s effort to grow the state’s skilled trades workforce.
“How will you attract new young people to the skilled trades if you cut wages and benefits and limit opportunities?” asked Patrick “Shorty” Gleason of the Michigan Building & Construction Trades Council.
The long-simmering debate over prevailing wage repeal began heating up in advance of Wednesday’s hearing. The Michigan Freedom Fund, which fought for the state’s right-to-work law, began airing online ads this week touting potential savings of prevailing wage repeal.
A 2015 paper funded by a construction trades group in West Virginia, concluded the costs of school building projects did not vary significantly between states with and without prevailing wage laws. The main impact, the report argued, was reduced wages that could otherwise depress the economy.
Jim Judd of Master Craft Carpet Service argued Michigan’s prevailing wage law promotes fair competition and prevents “dishonest and often out-of-state contractors” from swooping in to secure business.
“Without prevailing wage laws, honest contractors like me are underbid, losing business and ultimately paying increased workers comp and health insurance premiums to subsidize the dishonest contractors,” Judd told lawmakers.