The Building Tradesman Newspaper

Friday, February 03, 2017

Prevailing wage repeal No. 1, again, on GOP priority list

By Marty Mulcahy, Editor

LANSING - The prevailing wage repeal zombies are back in the Michigan Legislature. They never really went away.

With the entire state government having been firmly in control of ultra-conservative Republican lawmakers for the past six years, repeal of the Michigan Prevailing Wage Act of 1965 has consistently been among their top priorities.

So it is again in 2017, as a three-bill package to repeal the law was the first legislation (Senate Bill 1) introduced in the new session of the Legislature on Jan. 18. Senate Majority Leader Arlan Meekhoff (R-West Olive) personally introduced the new repeal legislation, which rose up and then was left for dead in both 2015 and 2016.

"It just never stops," said Michigan Building and Construction Trades Council Secretary-Treasurer Patrick Devlin. "They give lip service to wanting to grow the number of people going into the skilled trades, but they keep pushing to lower construction industry wages,  benefits and training by attacking prevailing wage. It makes no sense, unless you also understand that this isn't about common-sense economics, it's about ideology - most Republicans in the state view repeal as a way to attack labor unions."

The great majority of Michigan Republicans lawmakers support prevailing wage repeal, but not all. The big holdout is Gov. Rick Snyder, who has pledged to veto repeal because he understands that lower worker wages - a key result of eliminating the law - would drive workers from the construction industry.

"I think you'll see that Republicans have a history of going after folks who make a living wage, so much so that they will put it at the top of their agenda, whether Gov. Snyder is willing to sign it or not," Senate Minority Leader Jim Ananich (D-Flint) told the news service MIRS. "As for me and the members of my caucus, we want to focus on bringing more good-paying jobs to Michigan, not reducing the pay of hardworking people."

The Michigan Prevailing Wage Act assures that on state-funded construction projects, wages that "prevail" in the area of the project will be paid to construction workers. The law assures that local and out-of-area contractors can't submit low bids on taxpayer-funded construction projects, and win contracts by employing a low-paid workforce.

In states where prevailing wage has been repealed, worker wages have dropped by 10 percent or so, union training programs are starved for funds because of lower wage packages, workers become much more migratory seeking higher wages, and job safety statistics show greater incidents of injuries. Proof of all the above are backed up by numerous academic studies.

Still, Republican proponents of prevailing wage repeal in Michigan have pushed on with their seemingly never-ending quest. There's little doubt that both the state House and Senate would vote to overturn the law in a heartbeat, if not for Snyder's threatened veto. Two different statewide petition drives, one starting in 2015 and the other in 2016, both fizzled out. The first died because hundreds of thousands of signatures were found to be faked or duplicated, in what could be a massive case of un-prosecuted fraud. The other ended abruptly nearly a year ago, with the speculation being that the Devos family of Grand Rapids simply turned off the funding spigot.

“Since my days as a township official, I have viewed prevailing wages laws as an unnecessary burden on our schools and local communities,” said Meekhof. “It does not make sense that our taxpayers should have to pay more for improvements to our school and municipal buildings. The extra cost of prevailing wage laws siphons money away from other community priorities.”

Those same academic studies referenced above found that despite Meekhof's claims, there is no correlation to taxpayer savings on public construction projects and prevailing wage repeal. Proponents of prevailing wage repeal claim that cutting worker wages leads to a direct correlation to lower bids by contractors. But that theory doesn't take into effect factors like lower worker productivity, a more transient workforce, higher costs associated with more worker injuries, and contractors simply not lowering their bids. 

When Michigan's prevailing wage law was suspended by a federal judge for more than two years in the mid-1990s, a Barton-Malow executive called it "a disaster" for the state's construction industry.

Speaking of disasters, the Associated Builders and Contractors of Michigan, through a front group, sponsored the first, failed petition drive to repeal prevailing wage. ABC of Michigan State Director Jeff Wiggins was asked by MIRS how the situation with prevailing wage is any different than in the past.

"It's a new year and a new legislature," Wiggins said. "An even greater majority of the lawmakers support the repeal. We think this is the right time for introducing this legislation."

Todd Tennis, an IBEW lobbyist in Lansing for Capitol Services, said there is likely a majority of support for prevailing wage repeal in both the state House and Senate, but not enough for a two-thirds majority in both houses to overturn an anticipated Snyder veto.

"Prevailing wage is still a top priority in the GOP caucus, and I wouldn't be surprised to see a vote for repeal in the Senate by the end of February," Tennis said. "There are a lot of new faces in the House, so we have to find out where they stand, and we will have an opportunity to tell the story of the benefits of prevailing wage. But to our knowledge, the governor's position hasn't changed, he has talked a lot about the importance of developing the skilled trades in Michigan."

Tennis said there still remains a good possibility of the initiation of a third petition drive to rescind prevailing wage.

Meekhoff's bill was referred to the Committee on Michigan Competitiveness.

"As Governor Snyder noted in his State of the State Address this week, skilled trades people are literally at the center of rebuilding our great state and are in short supply," said Mike Jackson, executive secretary-treasurer of the Michigan Regional Council of Carpenters and Millwrights. "If cutting pay and benefits is what Senator Meekhof and his stooges want, then they should lead by example and volunteer to cut their salaries and health care benefits first. Why taxpayers even pay politicians like Meekhof who make a sport out of targeting workers is beyond us. Our message to Republicans is simple: lead by example - cut your own taxpayer-funded wages and benefits before you start targeting our privately negotiated paychecks."