Prevailing wage ban

Those laws require government-funded projects to pay skilled workers wages that are indexed to union pay rates.

The difference can be significant. Nationally, the average hourly rate of carpenter is $19, according to payscale.com. But the second quarter 2015 prevailing wage estimate from the state of Michigan Licensing and Regulatory Affairs wage hour program places the required payment in Ingham for a prevailing wage contract at $41.17 an hour. A 2007 report from the free-market Mackinac Center found prevailing wage requirements increased hourly rates by nearly 40 percent.

While the legislation is expected to pass both chambers of the Legislature, Republican Gov. Rick Snyder has made it clear he opposes the change. He has not expressly threatened a veto, as he did with the Religious Freedom Restoration Act, but he is considered likely to reject the bill if it lands on his desk.

To counter a likely veto from Snyder, supporters have submitted — and the State Board of Canvassers on Tuesday approved — ballot language for a citizen initiative.

The initiative is being pushed by Protect Michigan Taxpayers, the coalition that championed the “Right to Work” legislation in 2012.It will have 180 days to collect over 250,000 valid signatures from registered Michigan voters. Once that happens, the state Legislature will have the option to approve the initiated law — and Snyder would not have an option to veto it. If the Legislature rejects the initiative, it will go the ballot and Michigan voters will have their say.

Right to Life used the initiative process several years ago to circumvent Snyder’s veto on controversial abortion insurance requirements. Rather than allowing the initiative to go to a vote of the people, the Republican-controlled Legislature approved the law. That mandate was labeled rape insurance by opponents since it would have prohibited an insurance company from paying for abortion services unless a person had purchased a special insurance rider to cover such services.

Unlike the Right to Life initiative, Protect Michigan Taxpayers late on Tuesday added an appropriation of $75,000 to the language. With enough signatures and legislative approval, under the Michigan Constitution it still may not be eligible for a referendum because of the appropriation.

"This appropriation is the height of political cowardice," Sen. Curtis Hertel, D- East Lansing, said during the floor debate last week. "You´re afraid of what the voters will do. You´re afraid they will go to the ballot and vote this down."

Supporters of repeal, like Sen. Rick Jones, R-Grand Ledge, said the prevailing wage law artificially inflates the cost for taxpayer-funded building projects. A repeal, he said, would lessen the costs to taxpayers.

“All indications are that it will create more jobs,” Jones said in a phone interview. “Maybe a city will spend less money on a new city hall or courthouse or police department, and can do more with roads.”

Jones said citizens don’t want to pay more for government construction projects and are angry about it. He said he would support encouraging able-bodied persons on welfare to train and take the skilled jobs necessary for construction.

“Skilled workers will have no problem under a change from prevailing wage,” Jones said. “Skilled trades like pipe fitters, crane operators, and electricians will have no problem. The unskilled labor worker would not be paid as much.”

Jon Byrd of the Michigan Laborers’ Council disagrees with Jones and offers this twist on the measure. He said repealing the law will allow out-of-state contractors to underbid Michigan companies and employees for Michigan tax-funded projects.

As a word of warning, he notes a situation that occurred in 2010, during the cleanup operations of Enbridge Inc.’s massive pipeline oil spill in Marshall. Hallmark Industrial, a Texas company, was hired as a subcontractor for Enbridge’s cleanup operations, which were overseen by Garner Environmental Services of Texas. Byrd argued that because there were no prevailingwage requirements, Hallmark was able to transport dozens of Central American immigrants who were in the country illegally to the state. There they toiled on the river for 12 to 14 hours a day being paid about half what other workers were being paid. The situation was revealed after an investigation by Michigan Messenger.

“[Prevailing Wage] was originally passed as a disincentive to out-of-state contractors from undercutting in-state and local contractors,” Byrd said. “If it is repealed, what happened there could happen all over the state.”

Former Rep. Mark Schauer, the Democratic candidate for governor last year, concurred with Byrd. If prevailing wage laws are repealed, he said, “You get untrained, unqualified workers doing work wrong and dangerously.” He said companies that pay a prevailing wage are more likely to invest in safety training.

On the other side of the issue, the Associated Builders and Contractors of Michigan has hailed the repeal move.

“A repeal of the outdated law will mean school and university budgets, as well as all state government, will not be forced to overspend on construction, saving taxpayers as much as $250 million annually in the educational construction sector alone,” said association President Chris Fisher. “The fact that the bills are the first introduced in the 2015 session indicates the importance of prevailing wage reform to easing the strain on state and education budgets.”

Byrd, however, said the association is not interested in workers, but rather in the contractors who hire them.

“ABC advances an agenda for the economy where they can pay the least and get the shoddiest job done, the fastest,” Byrd alleges. He also notes that while the group claims it is about American workers, nationally the group is advocating to import more foreign-born workers under guestworker visas designed to allow foreign nationals with needed skills for the U.S. economy to immigrate and work in the states legally.

Prevailing wage controversies are not new to Lansing. In 2013, the builders and contractors association sued the city over its local ordinance requiring prevailing wages for city supported projects. Circuit Court Judge Clinton Canady III struck the law down, but the state Appeals Court reversed that ruling. The association argued the law was a violation of Michigan’s Home Rule law because the municipality usurped the state’s control and influence.

In a union city like Lansing, prevailingwage requirements are popular, and Mayor Virg Bernero is an advocate.

The association “has filed an appeal to the MI Supreme Court, and we are hopeful that the state’s high court will sustain the appellate court decision,” said Bernero spokesman Randy Hannan via email.

“Mayor Bernero arrived at his position on this issue as the son of a working class family and as a public official who is deeply concerned about economic issues that impact the middle class. He believes that the prevailing wage is important because it spreads the benefits of economic development to working families across the metro Lansing region and across the state.”

Hannan said Bernero shares the con cerns of organizers like Byrd.

“He believes that all government jurisdictions should make their best efforts to hire local workers and companies,” Hannan said. “When this is not possible, workers and companies from within the state should be preferred over those from outof-state, provided that they deliver comparable value to taxpayers at a comparable cost. There will be times when a product or service can only be obtained from outside a locality or the state, but even in those cases our prevailing wage requirements should still apply.”