Repeal the Prevailing Wage

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Repeal the Prevailing Wage! - Contact your Legislators

 

There's little doubt that Michigan's economy is back on solid footing — but that doesn't mean there isn't more work to do to continue bringing jobs to the state.
We need to keep rethinking outdated practices that are hindering job growth. An effort is gaining momentum to take a huge, positive step in that direction by eliminating Michigan's outdated and expensive prevailing wage law.
In place for half a century, the law inflates the price tag on taxpayer-funded building projects — think school buildings, sewers and township halls — by forcing construction companies to pay artificially high wage rates based on union agreements, rather than what the free market dictates.
Not only does it hinder job growth and create an inefficient use of taxpayer dollars, but the name of the law itself is misleading. With more than 80 percent of the construction workforce choosing not to belong to a union, there is nothing "prevailing" about the wages the government requires private employers to pay workers under the law.
That's right — Michigan's prevailing wage law allows labor unions to dictate wages and fringe benefits, although they represent less than 20 percent of the workforce. Worse yet, the public and our elected representatives are not allowed a seat at the bargaining table.
The unrealistically steep construction wage rates mandated by the law are often double or more the national average. The average free-market construction wage is already a healthy $23 per hour or more, according to the U.S. Department of Labor. Prevailing wage typically inflates wages up 60 percent or more for most construction trades.
Despite already paying higher wages than most industries in Michigan, construction is the only sector subjected to prevailing wage rules and the only industry in which wages are arbitrarily set by an elite group and imposed on the rest of the industry. There's no logical reason for the construction industry to be treated differently from every other industry and denied a competitive ability that every other small business enjoys — paying competitive wages.
The current law has a chilling effect on job creation. Artificially imposed higher wages mean contractors hire fewer workers. When Michigan's prevailing wage law was suspended for 30 months — from December 1994 to June 1997 — following a federal district court ruling, approximately 11,000 more construction jobs were created. (Source: U.S. Department of Labor)
Permanent repeal of the law is long overdue. Michigan taxpayers are standing up for free-market principles as signers of petitions this year asking for fiscal responsibility in government spending and another boost for our state's economic resurgence.