State Legislature repeals prevailing wage law
LANSING — The Republican-controlled Michigan Legislature has rescinded the state's decades-old law that guarantees higher wages for construction workers on government projects, quickly enacting the repeal initiative rather than letting it go to a public vote.
Though Governor Rick Snyder opposed the measure, it was veto-proof because it was initiated through a ballot drive by non-union contractors. The prevailing wage law requires paying the local wage and benefit rate - usually union scale - on state-financed construction of schools, university dorms and other public works projects.
Michigan is the fifth conservative-led state to annul its prevailing wage law since 2015. The repeal will take effect immediately but not affect existing contracts.
"The time has come to eliminate this outdated law and save our taxpayers money," said Senate Majority Leader Arlan Meekhof, a West Olive Republican who has long pushed to repeal the measure that was enacted in 1965. Other GOP lawmakers called the law a government-mandated "carve-out" and a "price-fixing scheme."
Democrats voted against the legislation , saying it will result in lower paychecks and that it makes no sense as Michigan tries to address a shortage of tradespeople. They questioned whether it will save taxpayers money, warned it will be a boon to "cheap" out-of-state contractors with lesser-skilled employees and said angry construction workers watching in the legislative galleries should lash out in the fall election.
"It will only cost our state in the long run," said Sen. Curtis Hertel Jr. of East Lansing.
The Senate voted 23-14, with four Republicans joining Democrats in opposition. More than 90 minutes later, the House narrowly supported the repeal 56-53, as seven Republicans voted no.
Outraged tradespeople, who unsuccessfully lobbied for the bill to proceed to the November ballot, then yelled at and cursed at legislators amid a stepped-up security presence at the Capitol.
Twenty-two states do not have prevailing wage laws, according to the U.S. Department of Labor. Republican-led Arkansas and Kentucky repealed theirs in 2017, West Virginia in 2016 - when GOP lawmakers overrode a veto - and Indiana in 2015.
The ballot drive was funded primarily by the nonunion Associated Builders and Contractors of Michigan, which spent $1.3 million to collect voter signatures to bypass a veto from Snyder. After a court fight, the initiative was certified by the state elections board last week.
Critics say the prevailing wage mandate is a "red tape nightmare" that inflates costs and makes it harder for nonunion contractors to compete by making lower bids. Business groups such as the Michigan Chamber of Commerce and conservative organizations like Americans for Prosperity urged legislators to act, saying Michigan is among just six states to base prevailing wages solely on local union contracts.
Others in the business community and organized labor, however, rallied against the repeal measure. They said the law helps fund union training that is important from a business perspective and for the safety of 170,000 workers in the industry.
"Without prevailing wage, we wouldn't have the mission-driven and highly trained workers for the jobs. We'd have low quality cutting us out. ... Taxpayers, they're going to pay for the mistakes," said Jessica Knight, an apprentice with Operating Engineers 324 who serves in the Army Reserve.
The legislation is not expected to save much on road projects because most are at least partially funded with federal money and are subject to a U.S. prevailing wage law.
Michigan's law was intended to put union and nonunion labor on an equal footing in competing for state construction jobs. It was struck down in 1994 and reinstated by a federal appeals court in 1997.
The repeal law includes a $75,000 appropriation, making the measure immune from a voter referendum.
The Legislature's move was the latest blow to organized labor in a state where right-to-work laws were enacted in 2012. The last times that lawmakers enacted citizen-initiated laws rather than let them go to voters were in 2014 and 2013, when Republicans backed wolf hunt and abortion insurance measures.