The Building Tradesman Newspaper

Friday, February 20, 2015

Short lull in prevailing wage repeal effort gives trades time to lobby GOP

By Marty Mulcahy, Editor

LANSING - Republicans in both the state House and Senate have made repeal of the Michigan Prevailing Wage Act of 1965 their top priority in 2015 - with the first three bills in each chamber that were introduced last month related to canceling the law.

There is expected to be a several week interlude before committee votes are taken on the bills, with a pause for the hoopla leading up to the May 5 special election to hike the state sales tax to improve the state's roads. 

Various news sources have suggested that there will be legislative committee hearings on prevailing wage repeal, but real work isn't expected until after the May 5 special election. "In the meantime," said Jeannette Bradshaw, recording secretary/registrar for IBEW Local 58, "we're talking to lawmakers, and we're asking our members to contact their lawmakers and urge them to vote against prevailing wage repeal. They do listen to their constituents." 

The legislation has been referred to the House Commerce and Trade Committee, and the Senate's Michigan Competitiveness Committee. The building trades hope to keep the legislation bottled up in one of the committees, so that it doesn't reach a full vote in either the House or Senate. But that's highly unlikely, so the focus will likely be on the full floor vote in both chambers, and on winning over a few Republicans to join the entire slate of Democrats expected to vote no on prevailing wage repeal. With historically large Republican majorities in both chambers, it's a tall order.

"If the vote were to take place tomorrow to repeal prevailing wage, we would probably lose," said Todd Tennis, an IBEW lobbyist for Capitol Services. "But it looks like they're going to wait until after the May 5 vote to take it up, and that's a good thing. It gives us time. We are taking our message to everyone we can, and we have identified quite a few lawmakers who have a basic understanding of the construction industry and where we're coming from."

Tennis said the lobbying so far has been effective, because there is a lot of information out there that refutes the benefits of prevailing wage repeal.  "The more we bring it up, the more they give it a second look," Tennis said. Gov. Snyder has vowed to veto a repeal bill.

"It's extremely disappointing that the first priority of Republicans is to lower wages and have people work for less," said House Minority Leader Tim Greimel, D-Auburn Hills. "It's just another example of Republicans' relentless push for cheap labor."

While building trades unions do their lobbying, the Associated Builders and Contractors have been busy lobbying the GOP, too. Their debatable mantra: repealing prevailing wage is a burden to taxpayers, with Michigan being able to save as much as $250 million in 2007 if the law had been repealed. The ABC said it "points to studies indicating a savings of 10 to 15 percent when prevailing wage mandates are removed." The one study the ABC consistently brings up is the Anderson Economic Group of Lansing, which points to about $225 million in savings for the state if the law is repealed.

Said ABC of Michigan President Chris Fisher in a press release “Nearly every peer-reviewed study concludes that prevailing wage is a job killer and tax dollar waster."

In making that statement, Fisher ignores research from the Professor Peter Phillips at the University of Utah, Michigan State University's Dr. Dale Belman, and papers from State University of New York, Bowling Green University and the University of Missouri, among others. Phillips is often seen as the guru about prevailing wage research, having been to Michigan several times to talk about the studies he and staffers have done on our state's prevailing wage law and others.

Phillips has long maintained that prevailing wage repeal does not save taxpayers money, but has a cost to society in terms of lower worker training and less safe jobs, as well as creating poorer construction workers. In a November 2013 paper, Phillips derided the Anderson Economic Group's prevailing wage research by Alex Rosaen under the title, "Mr. Rosaen's Magical Thinking." Phillips said Rosaen fundamentally overestimates the cost of blue collar construction on public education construction at 30 percent of the total cost. That number was from the 1990s, Phillips said, the real number today is closer to 20 percent. The difference skewers any prevailing wage savings comparisons.

But that's only the start. Here is a portion of Phillips' "rant" against Rosaen's study:

"He also does not consider construction quality associated with a lower-skilled workforce or the affects of a cut in wages on the skills and work ethic of the labor force. He does not consider downstream maintenance costs on capital facilities built by a substantially lower-paid, less-skilled workforce. He does not consider the spillover effects on private local construction labor standards impacted by a 25 percent wage cut on public works. He does not consider the effect of a less-skilled labor force on injury rates or workers compensation costs. He does not consider the multiplier effects on local Michigan communities of a substantial loss of income for local construction workers. He does not consider the impact of out-of-state contractors exploiting a prevailing wage repeal to bring in low-wage workers from elsewhere who will, in turn, take their construction earnings elsewhere.

"He does not consider these factors because to do so would require more than a back-of-the-envelope calculation based on a simple and restricted set of doubtful hypothetical assumptions."

The Michigan Prevailing Wage Act of 1965 is the most important law on the state's books that affect the wages of construction workers, both unions and nonunion. For the reasons Phillips states above.

Building trades leaders are urging Hardhats to contact their legislators - especially Republicans - and ask them not to repeal prevailing wage.

"We need our members to speak out. Start getting spouses and families involved, speak from the heart," Bradshaw said. "Phone calls, letters and e-mails are fine, but it's great when you can talk face to face with your lawmaker at a local coffee meeting. One of the things I ask is, 'why are we pushing a skilled workforce, and we work hard to get people into the trades, and then undercut their pay by repealing prevailing wage?' "

Help stop repeal of the Michigan Prevailing Wage Act.  
To contact your state lawmakers, go to:
    Under the "Senators" tab, click on "Find your Senator."
    Click on "Find your Representative" at the bottom of the page.
Or, call your city of township clerk's office and ask them who your lawmakers are.