by Bruce Walker
Gov. Gretchen Whitmer on Tuesday announced she has reinstated Michigan’s controversial prevailing wage for government contracts.
The state’s prevailing law was repealed by the state legislature in June 2018, during the final year of the administration of Republican Gov. Rick Snyder. Michigan was one of 24 states repealing the prevailing wage practice.
The governor had indicated last October her plans to reinstate prevailing wage, alleging the 2018 legislative action “left the door open” for the state’s Department of Technology, Management and Budget (DTMB) to exercise its authority to “develop the terms of state contracts.”
Wendy Block, vice president of Business Advocacy and Member Engagement for the Michigan Chamber of Commerce, said the governor’s reinstatement of prevailing wage clearly violates the will of Michigan voters.
“In 2018, over 380,000 Michigan citizens signed a petition proposing legislation to repeal Michigan’s prevailing wage law and the Michigan Legislature adopted it,” Block told The Center Square.
“The law repealed Michigan’s red tape requirement that union wages be paid on state government construction projects regardless of whether the construction worker is unionized or not,” Block continued.
“The result of Michigan’s prevailing wage requirement was higher construction costs on taxpayer-funded projects. In fact, a 2015 study by the nonpartisan Anderson Economic Group revealed that prevailing wage schemes for just public schools and universities cost Michigan taxpayers an additional $127 million annually over a 10-year period.”
American Builders and Contractors Greater Michigan Chapter President and CEO Jimmy Greene did not mince words when approached by The Center Square for comment.
“Yesterday, Gov. Whitmer ‘proudly’ and I would suggest illegally reinstated State Prevailing Wage on government projects coming out of the Department of Technology, Management and Budget, all to appease 15 percent of the commercial workforce,” Greene wrote in an email. “This is a blatant insult to Michigan taxpayers who overturned Prevailing Wage in 2018.”
Greene continued the anticipated higher costs brought about by the governor’s actions will exacerbate the impact of nationwide inflationary pressures on Michigan households.
“With inflationary costs on materials, severe supply chain issues and a continued shortage of workforce personnel, the Governor made a decision that scoring political points for union contractors are much more important than the vast majority of nonunion contractors and the skilled trades workers that choose not to belong to a union. The result: Artificially inflated construction costs and you, the taxpayer, will pay.”
James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, also questioned the legality of Whitmer’s actions.
“The governor should abide by state law and award contracts to the best bidder,” Hohman told The Center Square in an email. “She should not inflate the costs of state construction with prevailing wage rules.”
Among those supporting the reinstatement of prevailing wage are Tom Lutz, executive secretary-treasurer of the Michigan Regional Council of Carpenters and Millwrights, and Price Dobernick, business manager of the United Association of Plumbers and Pipefitters Local Union 333.
“Although we had thought the law was settled, Governor Whitmer is now working to unilaterally overturn the Legislature’s 2018 repeal of Michigan’s prevailing wage law,” Block said. “We are very troubled by her actions.”
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.
Photo “Gretchen Whitmer” by Governor Gretchen Whitmer. Background Photo “Michigan State Capitol” by jasongillman.