The Building Tradesman Newspaper

Friday, February 22, 2013

Did Michigan’s prevailing wage law get Gov. Snyder’s kiss of death?

By Marty Mulcahy, Editor

LANSING – Uh oh.

Gov. Rick Snyder told reporters on Feb. 6 that he’s not interested in taking up prevailing wage repeal – the next big target for state Republican lawmakers who are being prodded by their big money backers.

“It’s a very divisive issue so I would say it’s not something that we’re working on,” Snyder said.

Of course, if any other governor had said that, the state’s building trades workers could breathe a sigh of relief, glad that Snyder is likely signaling to the Legislature that he wouldn’t sign such a bill if it reaches his desk.

But the governor has a bit of history in saying something is not on his agenda, and then changing his mind: witness the Michigan right-to-work law that Snyder signed Dec. 11 after zero public input and lightning-fast movement through the Legislature. Snyder signed the RTW law after proclaiming for nearly two years that the issue was also too “divisive” and that it wasn’t on his agenda.

It may not be on his agenda, but it’s on the agenda of state Republican lawmakers. “He (Snyder) didn’t want to do right-to-work, either,” state Sen. Arlan Meekhof (R-Olive Twp.) told the Holland Sentinel. A three-bill package introduced in the state House on Feb. 5 would repeal the Michigan Prevailing Wage Act of 1965. House Bill 4172 would repeal the law on a statewide basis. House Bill 4174 would exempt school construction from prevailing wage. And House Bill 4173 would address economic development aspects for repeal. There have similar bills introduced in the Senate.

Michigan’s Prevailing Wage Act is probably the single most important law bolstering wages for the state’s construction workers, both union and nonunion.

“The threat of prevailing wage repeal is way more important to the building trades than making Michigan right-to-work,” said Michigan Building and Construction Trades Council attorney John Canzano. “The building trades are a different breed. They could work nonunion, but they choose to work union; they want to be in a union, so right-to-work is less of a factor in the trades than elsewhere. But passage of a law repealing prevailing wage – that’s going to immediately affect the pocketbooks of building trades workers.”

The state’s law requires that prevailing wage be paid to construction workers on projects that involve state taxpayer dollars. That usually includes new construction and renovations of local school buildings, similar projects sponsored by colleges and universities, as well as work on state buildings. Every year, hundreds of millions of dollars in construction would lose prevailing wage guarantees. Road and bridge projects are less affected by the repeal, since much of that work involves federal money and the involvement of the federal prevailing wage law.

The wage is determined by state surveys over the years, which are taken sporadically at best. Usually, but not always, the prevailing wage equals the union rate. Take away that wage requirement, and contractors will be free to bid work at reduced levels, paying whatever lower wage level they can get away with. If bids can be won by importing cheap $9 per hour workers from wherever they can be found in this country or another – and that goes on every day all across the nation – then that workforce will be regular competitors for Michigan construction jobs.

Indeed, that scenario hasn’t changed since the federal Davis-Bacon Act was adopted in 1931. The federal prevailing wage law was sponsored by Republican legislators James Davis and Robert Bacon, and signed into law by GOP President Herbert Hoover. It was adopted in an effort to prevent the importation of cheap Southern labor from undermining the wage standards of other areas of the country.

In Congress in recent years, Republican lawmakers have backed off on efforts to repeal the Davis-Bacon Act – because the law does support community wage levels, and slows the importation of cheap, illegal labor from other countries, without creating greater project costs. But that’s not stopping the radical right lawmakers controlling both the Michigan House and Senate. Prodded by big money backers who want to build as cheaply as possible, they’ve got this year and next to build support for repealing the Michigan prevailing wage, and convince Snyder to see things their way.

House Minority Leader Tim Greimel (D-Auburn Hills) told MIRS News Service, “The fact that the Republicans are proposing the elimination of the prevailing wage right on the heels of enacting so-called right-to-work legislation demonstrates that wages in this state are never low enough for the Republicans. It will result in lower wages for Michigan workers and much bigger corporate profits. That’s what’s really motivating the Republicans, is trying to pad the profits of their corporate buddies.”