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Michigan Building Trades

No Prevailing Wage in Michigan

#MAGA makes its mark in red state Michigan as construction wages hit rock bottom

Kris LaGrange's picture
Jun 07, 2018

Over the last year, the anti-union Associated Builders and Contractors (ABC) have been collecting petition signatures to repeal Michigan’s prevailing wage. Once they gained enough signatures, the state legislature had 40 days to either repeal the law or allow it to be put on the November ballot. On Wednesday, the state legislature voted to do just that and lower wages for thousands of Michigan workers.

The 1965 law, mandates that state-funded projects must pay a prevailing wage. This keeps wages high and helps union contractors to stay competitive with non-union shops. ABC, which is made up of non-union shops, has spent the last three years trying to get rid of the law. Campaign finance reports show that ABC spent $1.8 million last year to help finance the petition drive, while the Protecting Michigan Taxpayers ballot committee raised another $1.2 million from anti-union groups like the Chamber of Commerce.

On Wednesday, the State Senate voted 23-14 to repeal the law. Later in the afternoon, the State Assembly voted 56-53 to repeal the 53-year-old law. Throughout the floor debate, union members in the balcony and union members on the floor protested as Senate Republicans attempted to fast-track the vote.

The repeal of the prevailing wage was in no way a slam dunk. One of the reasons that ABC decided to petition the legislature was that Republican Governor Rick Snyder was promising to veto the bill if it ended up on his desk. However, if the legislature takes up a bill from a petition it only needs to pass the two legislative chambers and the Governor can not veto it.

“This is the wrong move for Michigan and threatens to slam the breaks on Michigan’s economic recovery,” said Tom Lutz, financial secretary of the Michigan Regional Council of Carpenters and Millwrights Local 1045 told the Detroit News. “This vote is actually about the future of our workforce. It’s about the future of Michigan workers and Michigan businesses. It’s about making sure workers are trained and safe.”

With deaths in the construction industry rising across the country, many at the state capitol worried that the repeal of prevailing wage would exacerbate the problem. Thanks to prevailing wage jobs, contractors are able to pay into apprenticeship training programs. Not only do these programs create skilled tradesmen, that can charge higher rates, but they also learn valuable safety training as part of these programs. With taxpayer money on the line, many argued that the prevailing wage law means that these state-funded projects get done right the first time-saving money in the long run. “Just like in the Army, they would never hand you a weapon on the first day and say go to war,” said Jessica Knight, a veteran of the U.S. Army Reserves and an apprentice with the Operating Engineers 324. “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, people who can talk the talk, but they can’t walk the walk.”

Building trades leaders in the state say that when Indiana repealed their prevailing rate law in 2015, construction wages fell by 8.5%. A Midwest Economic Policy Institute and Colorado State University study released in March also found that Indiana’s repeal did not cause a decrease in project costs, but did increase turnover by 1.2% and decreased productivity by 5.3%.  

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