The Building Tradesman Newspaper

Friday, March 27, 2009

'Hire Michigan First' passes House; reception may be 'frosty' in Senate

By Marty Mulcahy, Editor

LANSING – The Michigan House of Representatives on March 12 adopted the “Hire Michigan First” plan, which rewards companies that employ 100 percent Michigan workers with state economic development incentives.

The legislation also cracks down on companies that hire undocumented workers by creating penalties that include requiring them to pay back their state incentives and barring them from future state contracts.

“This plan puts a laser-like focus on using Michigan tax dollars to create jobs for Michigan residents,” said State Representative Fred Miller (D-Mount Clemens), the architect of the “Hire Michigan First” plan. “The highly skilled, hard-working residents of Michigan… deserve to be first in line for these jobs. It’s our responsibility to make sure that our tax dollars benefit our working families, not people from out of state or even from other countries.”

Voted in mostly along party lines in the Democratic-controlled House, the “Hire Michigan First” plan:

  • Rewards companies that hire the most Michigan residents in the pursuit of state tax breaks and other economic development incentives. This rule would apply to projects handled by the Michigan Economic Development Corp. and certain state-funded programs, including the Michigan Economic Growth Authority and the Renaissance Zone Act.
  • Encourages transparency and accountability by requiring companies that accept incentives to report on who they hire to ensure that Michigan residents are put first.
  • Cracks down on companies that hire undocumented workers by creating penalties that include requiring them to pay back their tax incentives and barring them from future state contracts.

State Representative Barb Byrum (D-Onondaga), who owns a small business, said:

“Companies should not be allowed to accept tax breaks or state contracts and then turn around and give those jobs to undocumented workers so they can save money on wages and benefits. To improve Michigan’s business climate, we have to protect companies that play by the rules, and this plan does that.”

The legislation goes to the Republican-controlled Michigan Senate. There, said Todd Tennis, an IBEW lobbyist for Capitol Services, the Hire Michigan First legislation will probably have some bipartisan support. “But there’s two pieces that will probably get a frosty reception from Republicans,” he said, “and they both involve the building trades.”

First, he said the anti-union Associated Builders and Contractors “went ballistic” when they saw language that would have allowed the state to permanently bar a construction company from bidding on state-funded projects if a company was caught not paying workers the prevailing wage. Changing the language to allow a company caught not paying prevailing wage a little wiggle room by inserting the language “knowingly and repeatedly” did not pass muster with the ABC, but was retained.

The other aspect of the legislation that upset the ABC, Tennis said, is language that allows the employment of out-of-state workers on state-financed projects if certain collective bargaining agreements come into play. For example, IBEW local unions based in South Bend, Indiana and Toledo, Ohio have for decades had jurisdiction in a few Michigan border counties. In the House version of the legislation, the out-of-state workers would continue to be employed on that state-funded work, per the local union agreements.

That’s an exception to the legislation, which otherwise would require that on state-funded construction projects, “100 percent of the persons working on the project and employed by the contractor and subcontractors be Michigan residents for one year before beginning work.” The current requirement is 50 percent. The language in the state legislation analysis says: “The requirement does not apply to employers who are parties to collective bargaining agreements that allow for the portability of employees on an interstate basis.”

State Republicans have said they oppose some portions of the legislation because it would make Michigan less business-friendly.

State Rep. Tonya Schuitmaker, R-Lawton, said on the House floor that “while there are parts of this legislation I support,” in reality these bills create additional burdens that make it harder for companies to hire new employees, make it harder for our state to attract new investment, and will make Michigan a less competitive place to do business.”

But State House Speaker Andy Dillon (D-Redford Township) said the people of Michigan want to see action on behalf of Michigan’s workers.

“I urge my colleagues in the Senate to act quickly on this plan, because the Legislature’s top priority should be creating good-paying jobs for our residents,” Dillon said. “I commend Representative Miller and everyone else who has worked to shape this common-sense job-creation plan. Now it is time for the Senate to do its part to support Michigan workers and protect our middle-class families.”