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.
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.
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.
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.
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)
We need to keep rethinking outdated practices that are hindering job growth. An effort is gaining momentum to take a huge, positive step in that direction by eliminating Michigan’s outdated and expensive prevailing wage law.