Return of the ‘Death Star’ Debate in House
June 27, 2023
Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter
A day after the Senate Labor Committee took up a similar package of bills, the House Labor Committee circled back around for a second day of debate on shooting down legislation dubbed the “Death Star” in 2015.
House Democrats, led by Rep. Joey Andrews (D-St. Joseph), proposed overturning the 2015 Local Government Labor Regulatory Limitation Act, which preempted local control, and allowing local units of government to again set their own policies regarding higher-than-state minimum wages or additional benefit requirements through Andrews’ HB 4237.
The plan is also to bring back the use of project labor agreements (PLAs) in state and local government construction contracts with Rep. Jenn Hill (D-Marquette)’s HB 4231.
Both bills were supported the first time around by local officials, while the Michigan Chamber and Retailers Association expressed concern about the ramifications of changing regulations under Andrews’ bill.
That debate continued on Wednesday, with the Michigan Manufacturers Association (MMA) opposing the bill for potential threats to manufacturer competitiveness.
David Worthams of the MMA said he believes that decisions regarding minimum wages and benefits should be maintained by the legislature “so there is consistency among managing facilities and so our members can remain competitive here and internationally.”
He said the legislature is committed to ensuring the laws are fairly applied and executed and allowing municipalities to enact their own policies could result in dramatically different employment regulations across county or township lines.
Worthams added that as it stands now, none of his members are hiring at minimum wage because they must remain competitive. Instead, Michigan manufacturers average 24% higher minimum wage than other industries, he said.
Andrews responded that industries already paying above minimum wage should have nothing to worry about. He said the removal of local control in 2015 felt like “an anomaly” when local governments are allotted so much decision-making power in other areas.
But Worthams said it’s not an issue of wages paid, but about who gets to make the decision, and he added that the state has preempted local control in other elements of government, including state safety and vehicle codes.
Safety standards are dramatically different than wages, Andrews countered.
“The same things are going to kill people no matter where they are,” he said, but the cost of living varies greatly across the state.
The concern about hourly wages, specifically on construction jobs, was also addressed via Hill’s HB 4231. This bill repeals the 2011 ban on PLAs in state and local government construction contracts, which allows collective bargaining between labor unions and project owners while bidding on a job.
She said PLAs discourage dishonest contractors and lead to higher wages, better working conditions and more efficient projects.
Former Rep. Shane Hernandez, now president of the Associated Builders and Contractors of Michigan, said PLAs are problematic because they require non-union companies that utilize them to pay double fringe benefits.
They would still have to pay their employees for already existing health plans, but would also have to pay for union benefits through the PLA, which Hernandez said a majority of employees won’t receive because the PLA only exists for one job.
He anticipated that the return of PLAs would likely raise construction costs between 12% and 20%.
Hernandez echoed Rep. Tom Kunse (R-Clare), who said last week that the bill could ban a large number of apprenticeships through job sites using PLA’s.
He said approximately 80% of Michigan’s construction industry is non-union and takes on apprenticeships, including community college, university and trade school programs.
“No one should be denied equal access to opportunity because they choose not to contract with a labor union,” Hernandez said.
Rep. Dylan Wegela (D-Garden City) countered that because it’s up to local governments to decide on finite details, the assumption that apprenticeships would have to be union employees is “jumping to conclusions.”
Hernandez responded that those concerns were developed through historical context from before PLA’s were repealed, and it’s important to safeguard against any type of exclusion.
Jeremy Garza, a Lansing City Council member who represented himself in support of both bills, said local governments should be trusted to decide what’s best for their community.
He said it’s offensive that the state government would presume to know the needs of people in his city better than himself.
Kunse asked how far local control should go. Should it extend to prevailing wages?
Garza responded that he’s only there to talk about the two House bills before the committee, to which Kunse replied, “That’s a great dance. You do well in Lansing, sir.”
Neither bill was taken up for a vote on Thursday, but both received numerous cards in support and opposition.
HB 4237 was supported by Yannet Lathrop of the National Employment Law Project. It was opposed by the West Michigan Policy Forum, the International Council of Shopping Centers, the Robinette Apple Haus and Winery, the Pleune Service Co., First Community Bank and Rockford Construction.
HB 4231 was supported by the Michigan Townships Association. It was opposed by the Midland Business Alliance, the Michigan Minority Builders Association and the Michigan Association of Construction Academies.
Both bills were supported by the city of Ann Arbor, the Michigan Municipal League and the Michigan Nurses Association.