The Building Tradesman Newspaper

Friday, November 23, 2012

State prevailing wage back in GOP’s crosshairs

By Marty Mulcahy, Editor

LANSING – The Michigan Prevailing Wage Act of 1965 is on the chopping block – again.

Its repeal, in whole or in part, may come before the end of the year in the legislative lame duck session. While plans by state Republicans are still in flux, they have indicated that removing prevailing wage requirements from school construction will be the first target. And school construction comprises the vast majority of work performed under the state’s prevailing wage law.

“We’re working with governor and some moderate Republicans to try to work something out that’s more favorable to the building trades,” said Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council. “But this isn’t going to be pretty. We’ve already shown in the 1990s that prevailing wage repeal doesn’t work, but the anti-worker agenda among most state Republican lawmakers isn’t going to listen to reason. ”

The Michigan Prevailing Wage Act assures that wages that “prevail” in a geographic area are paid on construction project that involves the use of state taxpayer dollars. The state law mimics the federal Davis-Bacon Act, which has similar requirements for federally funded construction projects. Prevailing wage laws assure that out-of-area contractors can’t gain a bidding advantage on local projects by importing cheaper out-of-area or illegal workers to perform taxpayer-funded work.

With all the anti-worker bills that have been adopted by the Republican Legislature over the last two years, “I’m actually a little shocked that this hasn’t come up for a vote yet,” said Todd Tennis, a lobbyist for the IBEW.  “At this point, we’re talking to eight or nine Republican lawmakers in the House and Senate who might listen to us, but that’s a lot of votes and minds to change.”

Tennis said an appeal would be made to Senate Majority Leader Randy Richardville (R-Monroe), who has been reputed to be a moderate but has blocked little if any of the anti-labor legislation that has passed his desk.  At this point there is movement to repeal prevailing wage requirements from all state-funded construction, and there’s also talk of just removing the wage requirements from state school construction. “Maybe he’s willing to compromise,” Tennis said.

This isn’t the first time the Michigan Prevailing Wage Act has been repealed. A federal judge overturned the act in the mid-1990s, claiming that it was preempted by the federal Employee Retirement Income Security Act. A U.S. Supreme Court ruling overruled the judge and reinstated the dormant law after a 30-month period.

Multiple academic studies showed that when prevailing wage was dormant in Michigan, the state saved no money on construction costs. Studies of prevailing wage repeal in other states have similarly showed no cost savings to the taxpayers. In fact, University of Utah economics Professor Peter Phillips called Michigan “the poster child” for why prevailing wage repeal doesn’t save taxpayers money, as many conservative lawmakers contend, because it was easy to study the state before, during and after the repeal.

The Associated General Contractors of Michigan weighed in on the prevailing wage repeal with this statement: “AGC has been informed that the Michigan Legislature intends to take up legislation to repeal prevailing wage requirements on school construction work during the ‘lame duck legislative session this year.

“House and Senate leadership has apparently already agreed to pass the legislation and has the votes to do so. While the nine days of legislative session will provide for limited debate, if the legislation proceeds as expected, AGC will attempt to be the voice of reason. Legislators have been convinced that this amounts to a dollars and cents issue and that the state will reap substantial savings in future school construction costs absent prevailing wage.

“Countless studies have demonstrated otherwise. AGC would prefer that this be taken up during the next Legislature and be given due course, debate and consideration before making such a significant policy change. In the meantime, we are working with legislators, industry partners, the construction unions and others on this issue.”