Senate votes to repeal state's prevailing wage law

By David Eggert
Associated Press

LANSING (AP) — Michigan’s Republican-controlled Senate voted last week to repeal a 50-year-old state law that requires better pay and benefits on state-financed construction projects after forceful debate over whether the legislation would save taxpayers or take money out of blue-collar workers’ pockets.

The main bill, approved 22-15 on a mostly party-line vote, was sent to the House despite opposition from GOP Gov. Rick Snyder — who signed right-to-work laws more than two years ago but wants to avoid another fight with organized labor in part because he is promoting the trades as a career choice.

“I just don’t think it’s right that taxpayers should pay more than private industry for their construction,” said Senate Majority Leader Arlan Meekhof, a West Olive Republican.

He said the law signed by former Gov. George Romney in 1965 artificially increases the cost to construct schools, university dorms and other government buildings. Labor expenses can be 40 to 60 percent higher on projects where prevailing wages are calculated exclusively on local collective bargaining contracts, he estimated, inflating overall costs by 10 to 15 percent.

Democrats and some Republicans countered that construction workers deserve good wages for what can be grueling work, said the current law provides a level playing field to keep out-of-state firms from undermining in-state companies with cheaper labor and argued there is no evidence of savings.

“These bills do nothing to support our businesses. They do nothing to support our workers. Instead, these bills undercut both,” said Sen. Curtis Hertel Jr., an East Lansing Democrat.

Republican Sen. Tom Casperson of Escanaba, who voted against the legislation, said: “I would implore my colleagues to ask yourself: ‘When you’re accused of supporting the corporations at the expense of the working
man — those that are accusing us of that — are they going to be wrong?’”

Supporters said Michigan is among just six states to base prevailing wages solely on local union contracts, and repealing the outdated law would make the state more competitive.

Senate Republicans held off on advancing the bills until after voters last week defeated a sales tax increase tied to road repairs that had bipartisan backing from many interests, including unions. Spokesman Dave Murray said last week that Snyder’s position is “very clear” and he “isn’t interested in repealing the prevailing wage law.”

Twenty-two Republicans supported the legislation, while 10 Democrats and five Republicans opposed it.

The nonpartisan Senate Fiscal Agency said the bills would have an “indeterminate but likely positive” fiscal impact on state and local governments but added that a lack of data makes it difficult to estimate savings with any certainty.

The legislation is not expected to save much on highway projects because most are at least partially funded with federal money.

The 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 legislation includes a $75,000 appropriation to disseminate information about the repeal if it is enacted. The allocation makes the measure immune from a voter referendum, drawing criticism from Democrats.