Four Things You Should Know About Prevailing Wage in Michigan
There’s an effort afoot to repeal Michigan’s prevailing wage law this year.
There’s a lot of talk lately about Michigan’s prevailing wage law and whether it’s about to go away.
An effort to get rid of wage guarantees for construction and skilled trades workers in Michigan is in limbo after the Michigan Supreme Court put a halt this week on the initiative to repeal Michigan’s prevailing wage law. There’s a chance voters will see the measure on the statewide ballot this fall.
So what is prevailing wage anyway? Any why are some people so keen on getting rid of it in Michigan?
WDET’s Jake Neher and Michigan Public Radio’s Cheyna Roth talk about what prevailing wage is and why this is such a hotly contested issue in Michigan. Listen to that conversation by clicking on the audio player above.
Here are a few things you should know about Michigan’s prevailing wage law:
The basic concept can be explained in a single tweet.
I’ve been challenged by @Cheyna_R to explain prevailing wage in a Tweet:
Prevailing wage is a Michigan law that guarantees union-level wages on taxpayer-funded projects. It covers state projects and municipalities with their own PW laws.
Find out more on @wdet at 4:45 and 6:45
— Jake Neher (@GJNeher) May 18, 2018
WDET’s Jake Neher explains the basics of the law in fewer than 280 characters this way:
“Prevailing wage is a Michigan law that guarantees union-level wages on taxpayer-funded projects. It covers state projects and municipalities with their own (prevailing wage) laws.”
See all of Michigan’s prevailing wage rates by county here.
Democrats and unions want to keep prevailing wage around.
The biggest supporters of prevailing wage are unions, most Democrats, and some Republicans — including Gov. Rick Snyder.
State Sen. Curtis Hertel (D-Lansing) explains his support for prevailing wage — and his opposition to the effort to repeal it — this way:
“When you get rid of prevailing wage, you allow for out-of-state companies to cut the cost, but also hire low-skill people from out-of-state to come here and do those jobs,” says Hertel, “which means, well, you get what you pay for.”
Hertel also notes Michigan has put a lot of effort in recent years to bolster the skilled trades and fill the “skills gap” that exists in Michigan. He says cutting these wages would only hurt those efforts. This is one of the big reasons Gov. Snyder opposes efforts to repeal the law.
Most Republicans, free market groups, and non-union construction companies want to get rid of it.
In the other corner are people who don’t generally appreciate the government telling businesses what to pay their workers. And they especially don’t like it when taxpayers have to pick up the tab.
The Mackinac Center for Public Policy, a Midland-based free market think tank that has battled unions in Michigan for decades, isn’t a fan of these wage requirements.
Jarrett Skorup, the Mackinac Center’s director of marketing and communications, compares it to that time he had to do some repairs on his own roof. He writes in the Detroit News:
I recently installed a new roof on my house. Before doing so, I did what any responsible homeowner does — I got bids from different companies and made a decision by balancing quality and costs and using market competition to my advantage.
Now, luckily for me, I learned how to roof from my father, so the best option for me turned out to be doing it myself. Labor costs were minimal, except for some pizza and beer for the friends who helped.
These calculations are what most people make when considering construction projects on their own homes and businesses. But imagine if I had determined from the start that no matter who did the project, I was going to spend a minimum of $12,000 for a new roof because that’s the average price in some areas.
You’d probably find that to be a bit silly and a real waste of my money. Why would I pay more than I need to for a service just because it’s the going rate that other people pay? But that is exactly what Michigan’s prevailing wage law does.
The effort to repeal prevailing wage is an attempt to circumvent the governor.
As mentioned above, Gov. Snyder is not a fan of efforts to repeal prevailing wage in Michigan. He likes prevailing wage. That means a regular, normal, everyday bill to repeal the law would most likely be doomed the moment it hits the governor’s desk.
But there’s a way for the Legislature to pass measures without the governor’s signature in Michigan. It’s called petition initiated legislation — and that’s exactly what this latest anti-prevailing wage effort is. The group Protecting Michigan Taxpayers has turned in more than 380,000 signatures to put the initiative in front of the Republican-dominated Legislature. If lawmakers approve the measure, the repeal becomes law — no signature from the governor required.
However, the proposal is in legal limbo right now. Michigan Public Radio’s Rick Pluta reports:
The court order came less than an hour before a state board was supposed to send the question to the Legislature. The stay allows time for a legal drama to play out at the state Supreme Court. Construction worker unions say petition circulators broke the rules, and that should disqualify the initiative.
“And now we’ll have our day to ensure election laws are upheld in the state of Michigan,” says Steve Claywell with the Michigan Construction and Building Trades Council.
The petition campaign is led by business groups and non-union construction companies. The campaign says people who signed petitions should not have their signatures discounted because of a technicality.
