Michigan Eliminates Prevailing Wage Mandate

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Michigan Eliminates Prevailing Wage Mandate

 

Should the state mandate a union wage on government construction projects? Michigan legislators answered “no” to this question in early June. They passed legislation to repeal the state’s prevailing wage requirement. While unions bemoaned this move and promised payback at the ballot box, businesses and some workers applauded the move to allow greater flexibility on construction projects financed by the state government.

 

For decades in Michigan, government construction projects operated under the requirement that they pay the “prevailing wage” in a region. That is a state-set wage rate that was supposed to equal the wage and benefits paid to the majority of workers in a certain area. Usually, this meant the union wage rate. This allowed unions to have easier access to these projects and made it more difficult for non-union companies to compete for government construction contracts.

 

A business group had collected enough signatures to place a repeal of Michigan’s prevailing wage law on the November ballot. Legislators had the option of enacting this measure by approving it through a majority vote. Both houses of the legislature did so, with most Republicans voting to repeal the wage requirement and most Democrats voting against it.

 

Proponents of repealing the prevailing wage mandate say that taxpayers will save money because labor costs on government construction projects will be lower, perhaps by as much as 15%. They also say that this will mean more companies will be able to bid on government construction projects, thus giving more job opportunities to workers who are not in unions.

 

Organized labor fought against this law’s repeal, arguing that it would lead to lower wages for workers. They contend that it will drive skilled labor out of the state. They also say that this law helped working families.

 

Do you think that states should mandate a union wage scale on government construction projects?

 

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