Opinion: Michigan’s prevailing wage repeal will hurt workers

Posted by National Alliance for Fair Contracting on

Sean McGarvey and Doug Maibach
June 30, 2018

Michigan’s Mackinac Center for Public Policy keeps promoting the Michigan Legislature’s repeal of prevailing wage protections without considering the latest facts. One of Mackinac’s recent articles calls on the federal government to take a cue from Michigan and advance an effort to repeal federal prevailing wage protections.

Prioritizing ideology over evidence, it doesn’t cite the most advanced economic research on prevailing wage laws, fails to include industry experts, and, even worse, ignores the accounts of construction workers, the building trades unions and high-road contractors who readily pay prevailing wages – the people most impacted by the Legislature’s decision.
If Mackinac had done its research, it would find that there is no statistical relationship between prevailing wage laws and contract costs. In any industry, an employer can reduce labor costs by reducing turnover and using competitive, fair wages to attract and retain the industry’s most productive workers.

Mackinac claims that cutting “inflated wages” for blue-collar construction workers saves taxpayer dollars or lowers costs on a given project, but this obscures the fact that the money will simply be absorbed by other white-collar participants in that same construction project – whether it be the architect, engineer, Wall Street financiers, insurance carriers or project suppliers. Interestingly, these other participants’ wages are never accused of being unfair or inflated.

Construction labor accounts for about 20 percent of a typical project’s overall cost, and Mackinac says the repeal will cut project costs by 15-20 percent. So, following Mackinac’s logic, the construction workforce would work for nothing.

Without prevailing wage protections, responsible contractors must increasingly compete against “low road” contractors who frequently fail to invest in meaningful training and do not offer health and retirement benefits for their workers. The reckless market this creates diminishes incentive, in the form of investments in wages, benefits and training, for both the building of human capital in the construction industry and the retention of human capital over the long run.

Ultimately, this leads to the erosion of community wage and benefit standards, shoddy work and unsafe work sites, and less young people, women, communities of color and veterans joining the skilled trades.

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Will ending union wages on Michigan public projects save money, or just lower pay? (MI)

Posted by National Alliance for Fair Contracting on

Lindsay VanHulle
June 12, 2018

Michigan Republicans last week narrowly repealed a 53-year-old state law that required contractors on public construction projects to pay union-rate wages and benefits.

…

To Democrats and union members in the building trades, who erupted in anger after the vote tally was read, repealing the prevailing-wage law was yet another GOP-sponsored attack on working people – at a time when many Michiganders still feel like a decade-long recovery hasn’t helped them.

…

The argument that repealing the law would make it harder to recruit people into the trades is one of a litany of criticisms offered by repeal opponents, who predict lower wages and no savings on state construction costs.

Will any of that happen in Michigan without prevailing wage?

Bridge asked two researchers, whose studies have been cited as evidence on both sides of the prevailing wage debate, to project what may happen in Michigan in the years ahead.

Frank Manzo IV is the policy director for the nonprofit Midwest Economic Policy Institute, an associate of the Illinois Economic Policy Institute. He has studied the effect of repealing prevailing wage, mostly recently in Indiana, and found it did not save money on construction projects and lowered worker wages. The group’s board of directors includes people who work primarily in the construction industry, including contractors and labor representatives.

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From your research, as a result of last week’s vote, what do you predict Michigan will look like five years from now?

Manzo: He said his group’s January study from Indiana found that repeal of that state’s “common construction law” in 2015 led to less-skilled workers in the field, more worker turnover, less productivity and lower wages.

Expect similar results in Michigan, he said.

“Any purported savings don’t materialize because productivity declines,” Matzo told Bridge.

…

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High court puts prevailing wage repeal vote on hold (MI)

Posted by National Alliance for Fair Contracting on

Jonathan Oosting, Detroit News Lansing Bureau
Published 1:40 p.m. ET May 15, 2018

Lansing – A push to repeal Michigan’s prevailing wage law for construction workers hit a snag on Tuesday.

The Michigan Supreme Court suspended a lower-court order requiring the Board of State Canvassers to certify petition signatures as the seven justices decide whether to hear an appeal.

The high court did not rule on the merits of the case and could still reject an appeal by a coalition of unions and union-friendly contractors.

But the Tuesday afternoon “stay” prompted cancellation of a canvassers meeting and delays likely action in Michigan’s Republican-led Legislature, which is expected to take up the prevailing wage repeal measure if it reaches lawmakers. Approval would bypass a threatened veto by GOP Gov. Rick Snyder.

The 1965 law guarantees union-level pay and benefits for construction workers on projects funded by the state government. Repeal proponents argue prevailing wage inflates construction costs ultimately borne by taxpayers, while opponents maintain repeal would lower wages and limit training programs they fund.

The Michigan Court of Appeals last week ordered the Board of State Canvassers to certify the prevailing wage repeal petition after the panel deadlocked in late April in a 2-2 vote.

The Michigan Bureau of Elections had recommended certification of the prevailing wage ban ballot proposal, but both Democrats on the bipartisan panel voted against the prevailing wage repeal measure amid arguments over false addresses provided by circulators who had collected signatures.

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Repealing prevailing wage would be irresponsible (MI)

Posted by National Alliance for Fair Contracting on

2018-05-03 / Viewpoint

There’s been plenty of buzz lately around the need for Michigan to update its infrastructure. But when the state sends workers into our communities to fill our potholes, construct our bridges or renovate our schools, we expect the job will be done well. We don’t expect it to take years for them to repave a few blocks of our neighborhood, or that the cherry picker helping assemble an overpass will become part of the community’s scenery as the project lasts indefinitely.

We expect the job will be done on time and will be high quality, and that’s all thanks to Michigan’s prevailing wage laws.

Prevailing wage has gotten a bad reputation lately, but at the end of the day, all it means is that workers are getting paid the local average for construction projects in the area, guaranteeing the workers earn an honest day’s pay for an honest day’s work. That is just common sense.

Critics claim it’s too costly to pay state construction and skilled trades workers a fair wage, and if we repeal our prevailing wage laws, the state will save money and our economy will get on the right path.

But as simple as that sounds, studies show it simply isn’t true.

A study published earlier this year analyzed the effects of repealing prevailing wage on Indiana’s economy in the three years since it’s been eliminated. Rather than enjoying prosperous economic benefits as promised, the state has since suffered with higher worker turnover and lower productivity.

Tim Sneller, State Representative
Burton

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Guest Column: Protect prevailing wage to save jobs

Posted by National Alliance for Fair Contracting on

By Kevin Hertel, Special to Digital First Media
POSTED: 01/30/18, 3:35 PM EST

Michigan’s prevailing wage laws have helped mitigate the effects of this misguided perception. Passage of prevailing wage laws proved that we have had the good sense to make sure that the people who build our schools and office buildings, keep our air conditioners working in the summer and furnaces working in the winter, and come out to unplug our drains at all hours of the day and night will always earn a living wage. This law stands not just to serve as a “minimum wage for tradespeople,” it also protects small contracting businesses. Since everyone is competing at the same baseline pay scale, top tradespeople are not immediately drawn to a company that is able to pay them more than a mom-and-pop contractor. Prevailing wages, then, are simply wages that help all workers in the construction industry earn a fair day’s pay for a fair day’s work.

The bottom line is this: Michigan is a manufacturing state. Our economy cannot exist, let alone continue its upward trend, if we pull the financial rug out from underneath skilled trade workers and leave no benefits to working in the trades. Every legislator I know would say that Career and Technical Education is the key to a successful state-many have worked to ensure that their centers for it are state of the art, as is Macomb County’s. However, if prevailing wage is repealed, this push will have been for nothing-no one is willing to go through that much training and certification to end up making $9.25 an hour. Repealing prevailing wage puts the future of our state at risk.

Democrat Kevin Hertel is a state representative from St. Clair Shores.

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Veterans speak out about prevailing wages in Lansing

Posted by National Alliance for Fair Contracting on

By News 10
Posted: Tue 12:17 PM, Feb 27, 2018
Updated: Tue 7:26 PM, Feb 27, 2018

LANSING, Mich. (WILX) – A group of Veterans gathered in Lansing Tuesday to speak out about and support the prevailing wage vote.

Veterans from three skilled trade unions talked at a press conference at the Michigan Senate building on Tuesday morning.

Their message, “a vote against prevailing wage is a vote against high-quality jobs that allow veterans to support themselves and their families.”

…

“Veterans bring with them the experience, grit and sense of unity necessary to succeed in the skilled trades,” said Brad Reed, a business representative for the Michigan Council of Carpenters and Millwrights (MRCC) and Army veteran. “By protecting the prevailing wage, these high-skill, high-demand jobs are more available and accessible to our nation’s heroes.”

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Prevailing wage a better value

Posted by National Alliance for Fair Contracting on

Henry Yanez
Published 11:00 p.m. ET Feb. 12, 2018

This year, special interests collected signatures to put the question of repealing Michigan’s long-standing prevailing wage law before the Legislature or on the ballot – often misconstruing the true intent of what their petition would do. They tell you it’s about saving you money. Nothing could be further from the truth. Let me tell you what prevailing wage is.

Michigan’s prevailing wage law ensures that our publicly financed buildings, roads, bridges and utilities are constructed using highly skilled and trained workers who are paid the regional average for their trade. The law doesn’t artificially inflate wages or the cost of construction and doesn’t force workers to be union members.

It just ensures that the people building our infrastructure earn a fair wage and benefits, and that their pay reflects their level of training. The law keeps skilled tradespeople and their families here in Michigan, where they spend money, grow the local economy and pay taxes.

Lowering wages reduces job productivity and lengthens the project schedule. Mistakes also happen when inexperienced, lesser-trained workers do the work. Michigan has already experimented with repealing prevailing wage in the mid-1990s. Costs went up and our skilled workforce went down. A study of highway and bridge work in 10 states found that high-wage workers built 74.4 more miles of roadbed and 32.8 more miles of bridges for $557 million less, compared to low-wage workers. Better and more efficient work for less money isn’t a difficult idea to get behind. …

Rep. Henry Yanez, D-Sterling Heights, represents Michigan’s 25th House district.

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Guest Column: Prevailing wage supports Oakland County communities (MI)

Posted by National Alliance for Fair Contracting on

Andy Meisner is Oakland County treasurer
POSTED: 01/12/18, 3:12 PM EST

Big things are happening here in Oakland County. In November, Oakland County voters approved millions of dollars in public projects to improve our schools, sidewalks and communities – all smart investments in our future.

These projects show that our economy continues to grow. We’ve come a long way since the stagnant, cash-strapped Recession years, and we can make even more progress working together.

Unfortunately, some special interests in Lansing want to gamble with Michigan’s prevailing wage law in hopes of increasing their profits. That would create roadblocks to growth in Oakland County, and it’s the wrong move.

Repealing the prevailing wage is being hawked by special interests as a way to save taxpayers’ money. If that sounds too good to be true, it’s because it is. Repealing prevailing wage will send qualified workers out of state, leaving projects to lower-skilled workers. It will lead to expensive mistakes and cost-overruns that will be passed onto taxpayers when projects are built with cheap labor by out-of-state contractors, compromising safety and quality.

…

Prevailing wage is a smart investment that levels the playing field so local Michigan contractors have the opportunity to compete for public projects, without being undercut by the fly-by-night operations that employ cheap, low-skilled labor. By requiring all contractors who bid on a project to pay their workers a fair wage, quality contractors are challenged to work smarter and employ innovative ideas, not just cut costs by slashing wages.

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Prevailing wage supporters launching counter-petition (MI)

Posted by National Alliance for Fair Contracting on

Jonathan Oosting
Updated 11:25 p.m. ET Dec. 7, 2017

Lansing – A coalition of construction unions and contractors are launching a petition drive for an initiative to preserve Michigan’s prevailing wage law, an attempt to thwart a separate petition drive seeking repeal.

The state’s Republican-led Legislature could decide early next year whether to scrap the 1965 law, which requires union-rate wages and benefits on state-financed or sponsored construction projects.

But the Michigan Prevails coalition and the Protect Michigan Jobs ballot committee are urging legislators against taking up the repeal initiative.

“They can do what they want to do, but make no bones about it, we are not going to take this lying down,” said Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council, who is helping organize the counter-petition.

The Protect Michigan Taxpayers ballot committee, funded largely by an association representing contractors who do not use union labor, last month submitted more than 380,000 signatures for a repeal plan. If approved by the Board of State Canvassers, the measure would advance to legislators.

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“This isn’t just about the unions,” said Mike Crawford, executive director for the Michigan Chapter of the National Electrical Contractors Association. “This is very much a business issue. The prevailing wage law … makes sure that public construction projects are bid on an equal footing, at least as far as labor is concerned.”

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(Visit Michigan Prevails Website)

Letter: Prevailing wage stabilizes labor market (MI)

Posted by National Alliance for Fair Contracting on

DetroitNews
Published 10:57 p.m. ET Jan. 3, 2018

Michigan is experiencing a skilled-worker crisis. Our state’s construction industry is booming and contractors are struggling to find the workers needed to participate on public projects. From a business perspective, the prevailing wage is a proven tool to retain qualified workers on Michigan’s public projects and entice new recruits into the trades (Re: The Detroit News’ editorial, “Let’s move past prevailing wage,” Dec. 14).

Contractors know Michigan’s prevailing wage laws help stabilize the labor market on publicly funded projects so we can find the workers needed to finish projects and make the best use of taxpayer dollars. I want Michiganders and policymakers to understand there could not be a worse time to repeal Michigan’s prevailing wage law.

I was there when we suspended the prevailing wage laws in the ’90s, and I saw how it devastated our skilled workforce for publicly funded projects. Facing reduced hourly rates, our workforce became transient. Decades of loyalty was supplanted by a revolving workforce forced to focus on finding the best pay. The best workers were lured away by increases in hourly wages, making it harder to complete the schools our children attend, the roads we drive on and other infrastructure projects on time or on-budget.

Repealing Michigan’s prevailing wage laws did not save money or benefit public clients 20 years ago and it will not help them now. Today, we are experiencing the same market trends. All contractors, including Barton Malow, have turned down work due to a lack of available workers. With billions more in publicly-funded jobs coming online this spring, Michigan can’t afford to gamble like we did in the ’90s with our skilled workforce.

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