The Building Tradesman Newspaper

Friday, August 29, 2014

Livingston County bans prevailing wage on its building work

By Marty Mulcahy, Editor

The Livingston County Board of Commissioners voted 5-4 on Aug. 4 to “not require prevailing wage” on county-funded construction projects.

Not allowing prevailing wage requirements allows the county to hire contractors who can pay their workers substandard wages and benefits. The vote opens the door to hiring out-of-area contractors, who will be feel free to underbid local contractors by hiring out-of-area, underpaid construction workers to do county-sponsored work.

“This is wrong on so many levels,” said Gary Hellmer, a business representative for the Michigan Building and Construction Trades Council and a Livingston County resident. “Preventing prevailing wage means that Livingston County will potentially be paying the salaries for out-of-area construction workers to perform work that local people should be doing. It also means we’re opening the door to having untrained, unqualified people in here doing work on public buildings.

“I can tell you that good, qualified contractors with qualified apprenticeship programs aren’t going to bid on these jobs. They won’t spend their resources on bidding because there’s just no bottom to the bidding.

“And beyond that, as a taxpayer, I want my taxes to pay for wages that are going to be recycled in the community. Pay local people a fair wage and they will be able to spend their money on taxes, in local restaurants and at local stores.”

The resolution, as indicated by its own language, stemmed from the 2012 passage of Michigan’s right-to-work law, which is “nonsense,” Hellmer said, because there is no connection between prevailing wage and right-to-work.

The resolution reads, “Whereas, Michigan is now a ‘right-to-work’ state allowing contractors and workers alike to participate freely in the construction industry.

“Therefore be it resolved that all future construction projects funded by Livingston County taxpayers will not require prevailing wage.”

Commissioner Dave Domas, in supporting the anti-prevailing wage motion, told theLivingston Press and Argus that eliminating  prevailing-wage requirements opens up the work to nonunion and union workers alike, and that prevailing wage “effectively eliminates nonunion workers from participating in the project.”

That’s simply not the case. The intent of prevailing wage, Hellmer said, is to stabilize local wages and industry standards by preventing unfair and/or unregulated bidding practices. The presence of a prevailing wage law does not exclude nonunion contractors. “Prevailing wage levels the playing field for bidding contractors, and allows union or nonunion contractors to win bids based on having the most productive, best-equipped and best-managed workforce,” he said.

And for years, U.S. workers have been able to withhold dues money from their union for any purpose other than the administration of the union contract and the collective bargaining process.

“Yes” votes in favor of outlawing prevailing wage came from Livingston County commissioners Kate Lawrence, William Green, David Domas, Ronald Van Houten and Donald Parker.

“No” votes to allow prevailing wage in Livingston came from commissioners Steve Williams, Carol Griffiths, Dennis Dolan (of Plumbers Local 98) and Gary Child.

Michigan’s right-to-work law allows an employee to opt out of paying union dues, even though that employee still enjoys the benefits of union membership. Prevailing wage laws generally require the payment of construction wages on taxpayer-funded projects that “prevail” in a given geographic area. The original prevailing wage law, the federal Davis Bacon Act, was a Republican-backed law from the 1930s that sought to limit contractors, often from the South, from paying their workers low wages, and thus being able to win bids elsewhere by undercutting local contractors’ bids  on federal jobs.

Ironically, the vote in Livingston County came just nine weeks after a Michigan Court of Appeals ruling overturned a state law, giving cities, townships, school districts and counties the green light to establish prevailing wage laws in their jurisdiction.

The court ruling overturned a lower court ruling in a case brought by the Associated Builders and Contractors affecting the City of Lansing. The ABC maintained that Lansing’s prevailing wage law should be made invalid because its practice of setting “third party wage and benefit rates is a matter of state, not municipal concern.” The appeals court disagreed, and until this case is ruled upon by the state Supreme Court, municipalities and counties are free to adopt prevailing wage laws.

Livingston County resident Joe Carney, an IBEW Local 58 member who sits on Livingston County’s Workforce Development Board, said “the one thing employers keep telling us at meetings is that we don’t have enough trained workers. What we do in the building trades seems to be the best kept secret in the world, and this vote shows a lack of understanding about what building trades unions do. In the IBEW, 22 cents an hour goes into training, without any money coming from the government. You take away prevailing wage, you take away our ability to provide that training. We have to start educating people about what’s going on.”