The Building Tradesman Newspaper

Friday, June 15, 2018

Michigan's prevailing wage law is repealed

By Marty Mulcahy, Editor



LANSING - A petition drive costing more than a million dollars, as well as a conservative judiciary and state Legislature, all converged to impose a devastating blow on Michigan's construction industry: the repeal of the state's Prevailing Wage Act of 1965.

The state Legislature did its dirty work on June 6, with the state House and Senate both taking up the language in a petition drive that called for prevailing wage repeal. The Senate adopted the measure 23-14, with all Democrats voting against repeal along with Republican Senators Tory Rocca (R-Sterling Heights); Mike Nofs (R-Battle Creek); Dale Zorn (R-Ida) and Tom Casperson (R-Escanaba).

The House voting margin was closer, 56-53. Again, all Dems voted against repeal, and they were joined by Republicans Reps. Joseph Bellino (R-Monroe); Gary Howell (R-North Branch); Martin Howrylak (R-Troy); Steve Marino (R-Mt. Clemens); Brett Roberts (R-Charlotte; Jason Sheppard (R-Lambertville) and Jeff Yaroch (R-Richmond).

Intense lobbying by the building trades unions and their contractors and contractor associations failed to sway enough lawmakers to vote no or simply pass on the vote and let the repeal question go on the general election ballot to let the people decide in November.

“It’s incredibly disappointing to see the legislature move forward with an attack on Michigan
workers that will cut wages and harm communities across the state," said Michigan Building and Construction Trades Council President Steve Claywell. "We are already facing a shortage of skilled labor, and thanks to this misguided vote Michigan is now lacking an essential tool to ensure quality wages that attract top talent. The legislature took power away from the people to decide on this important issue today and they now will need to answer to Michigan voters. It will be up to the voters to decide on whether they support their lawmakers cutting wages for hard-working men and women in this state.” 

Typifying the argument against prevailing wage, Senate Majority Leader Arlan Meekhof (R-West Olive) said: "it's time to eliminate this law and save our taxpayers money." But there are numerous studies that show prevailing wage repeal doesn't save taxpayers a dime.

On state taxpayer-funded projects, prevailing wage assures the payment of a wage to workers that "prevails" for a given geographic area. The law helps keep local jobs local, by removing the incentive for contractors to import cheap labor from elsewhere.  A number of academic studies have shown that repealing prevailing wage depresses worker wages, reduces money that's available for worker training, pushes workers into other jurisdictions or other lines of work in search of better pay - and offers zero savings for taxpayers.

With an aging workforce and a busy industry, there's a full-court press to get more Michiganians interested in a construction career. Lowering wages won't help. "Why you'd want to gut the wages of those workers at the same time doesn't make a lot of sense to me," House Democratic Leader Sam Singh (D-East Lansing) told MLive. "I've been trying to make the case to my colleagues in the House that this doesn't make sense."

Tweeted state Rep. Stephanie Chang (D-Detroit), who voted against repeal: "Prevailing wage repeal passes the Michigan House, 56-53. My heart is breaking for the families whose paychecks we are cutting and whose health care we are inhumanely ripping away."

Said state Senate Minority Leader Jim Ananich (D-Flint): "I didn't come here to lower people's wages. It's very clear that Democrats stand with working families."

The last seven weeks have seen a flurry of administrative, judicial and political activity that ultimately sealed the fate of the state's prevailing wage law. Late last year the front group for the ABC-Michigan, called Protect Michigan Taxpayers, submitted some 378,000 signatures to the state as part of their effort to repeal the prevailing wage law. The lies told by petition gatherers to obtain signatures was well-documented, first-hand accounts found them saying the petition was to reduce taxes or actually increase workers' wages.

On April 23, after a nine-week review of that higher sampling of signatures, the Michigan Bureau of Elections reported the prevailing wage repeal initiative had 3,139 valid signatures. If the sampling universe were carried out, it would mean that there were an estimated 268,403 valid signatures - more than the 252,523 needed.

However, after an appeal by Protect Michigan Jobs, a union-backed front group the Michigan Board of Canvassers on April 26 deadlocked 2-2 on whether to certify petition language intended to repeal the law. At issue was the validity of the signatures of people who signed above signature collectors who provided false or a wrong home address. Some collectors provided the address of a UPS store, a church with no shelter, a post office box or a hotel that was closed during the time signatures were being collected. 

Protect Michigan Jobs argued that there were enough invalid names of signature collectors (invalidating up to eight petition signatures on the signature pages) to toss out the entire petition process. 

The Michigan Court of Appeals disagreed. In a 3-0 ruling on May 11, the appeals panel ordered the Board of Canvassers to certify the petitions. The appeals judges ruled that while there are legal consequences for signature collectors who provide a false address, those consequences do not include invalidating the signatures that were collected. "The statutory sanctions do not include disqualifying elector signatures," the court ruled.

A subsequent appeal by Protect Michigan Jobs earned a small victory when the state  Supreme Court issued a stay of the appeals court ruling. But on May 30, the high court issued a single-sentence order upholding the Court of Appeals' directive to the Board of Canvassers to certify the anti-prevailing wage petition.

Under the state Constitution, successful citizen-led petition drives first go to the state Legislature for an up or down vote on the petition language. The governor is given no veto power. If the petition is not adopted by both the House and Senate, the language is than moved for a vote on the people on the next statewide ballot, which in this case would have taken place on Nov. 6. One of the main lobbying points distributed by Protect Michigan Jobs was to encourage lawmakers simply not to vote on the matter and let the prevailing wage repeal question go to a vote of the people in November.  

This year a union-backed counter-petition drive was started, with the goal of instituting a new prevailing wage law in Michigan. The May 31 deadline to submit those signatures came and went with the effort raising tens of thousands of signatures, but not approaching the 252,000 valid signatures necessary for it to get on the ballot. The signatures were gathered by unpaid union volunteers. Protect Michigan Jobs Co-Chairman Patrick Devlin, who is also secretary-treasurer of the Michigan Building and Construction Trades Council, said a similar, more substantial petition effort to reinstate prevailing wage would be considered next year.

"Throughout this process, we have heard from plenty of nonunion construction workers, who saw the writing on the wall and spoke up on their own and said repealing this law is going to cut my wages," Devlin said. "So this isn't just a union issue, it's an issue for everybody who wants to earn a fair wage for the work they do. Shame on these lawmakers who put business profits ahead of the people who elected them."


Prevailing wage repeal: They said it:

Following is a collection of quotes related to the June 6 repeal of the Michigan Prevailing Wage Act - perhaps the most important act of the state Legislature affecting the building trades since MIOSHA was established in 1974.

“Driving down wages and opening the door to shady out-of-state contractors is not how you address a skilled trades shortage, but that’s the backward philosophy we’re seeing from Michigan Republicans with this repeal. DeVos-backed, corporate front groups have bought a piece of legislation and working families will suffer for it. This repeal will not save the public money, instead, it will lower pay for construction workers and put their safety at risk. Today’s vote is proof that Michigan Republicans put the needs of corporate special interests before those of Michigan’s working families.”

- Lonnie Scott, executive director of Progress Michigan.

***

"This proposal would repeal a decades-old government mandate known as 'prevailing wage' that benefits a select few by requiring that union contracts be given a monopoly in determining work and wage classifications on state-government construction projects. It’s a law so restrictive that Michigan is currently one of only six states that are similarly in statute. The current system is unfair, outdated and doesn’t work toward moving Michigan forward."

-Michigan Attorney General Bill Schuette, and Republican gubernatorial candidate, excerpted from an Oakland Press guest column under the heading:  "Schuette: Prevailing wage not best for Michigan."

***

Prevailing wage is a "discriminatory and racist relic of the past … Repealing this antiquated price-fixing scheme will save hundreds of millions of dollars.”

-State Rep. Gary Glen (R-Williams Twp.)

***

“Since my days as a township official, I have viewed prevailing wages laws as an unnecessary burden on our schools and local communities.  It does not make sense that our taxpayers should have to pay more for improvements to our school and municipal buildings.” 

-Michigan Senate Majority Leader Arlan Meekhof (R-West Olive)

***

“My colleagues on the other side of the aisle just opened the floodgates for taxpayer contracts to be scooped up by foreign and out-of-state companies — essentially sending pink slips to Michigan workers, telling them their talent is no longer valued here. Michigan workers should be first in line for Michigan jobs.”

-State Sen. Steve Bieda (D–Warren)

***

"As we talk about repealing prevailing wage, I want to bring to you, which I dropped off in your offices, a study of the prevailing wage ordinance in the city of Marquette, Michigan. We've had this prevailing wage ordinance for over 30 years, and we knew that by having this...we are the best stewards of the taxpayers' dollars. In 2006 and 2010 we pulled five years of all the projects that my city did. And when we compared the actual numbers for what we budgeted for those construction projects vs. what the actual cost was, we found no truth in the argument that repealing our local prevailing wage ordinance would save any taxpayer money. If anything, the data proves that the work gets done on time, and under budget, when employing highly skilled workers and contractors who understand the industry."

-State Rep. Sara Cembensy (D 109th District -Marquette) from a June 6 speech on the House floor.