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matter?
by William Keith, Vice-Chair Policy & Resolutions
Houghton County Democratic Party
If you think that Michigan ought to pay the people who build our buildings and repair our
infrastructure a fair wage for work done right the first time, then you'll be concerned about
the possible repeal of the prevailing wage law, that helps ensure just that. Michigan's
prevailing wage law has stood the test of fifty years under Democratic and Republican state
governments alike, because everyone knows that cut-rate wages buy cut-rate work.
Now, though, cutting workers' wages has become part of the new economy. Companies have
gathered signatures on a petition asking Michigan's legislature to let their contractors get
squeezed, claiming that the move will save Michigan money. But repealing prevailing wage
hasn't reduced expenses in other states: the plan is just to pocket the difference when workers get
paid less.
At the Houghton County Dems' business meeting on October 7th, we passed a resolution stating
our support for Michigan's prevailing wage law. You can read it below, along with some further
details and links to more information.
You may wonder if there is anything you can do right now. There is: if you really want to
repair Michigan's budget, corporations that have received huge tax breaks in recent years can
start paying their fair share again. You can sign a counter-petition at fairfix.org which uses the
same process to call for increasing Michigan's corporate income tax.
Check out the information below, join the discussion, and head to fairfix.org to sign the petition
there. And if the prevailing wage repeal comes before the voters next November, join the
Houghton County Democratic Party in making sure that Michigan continues to pay skilled
laborers a fair wage for work done right.
----Background:
Why is it important?
Without this requirement, the lowest bidder would typically be someone paying low wages to
their workers. This:
Weakens Michigan's control of its wage and labor laws by forcing local companies to
compete with national companies subject to other states' wage and labor laws; and
Practically ensures that the project is not done by senior, higher-skilled workers.
Differences in wage costs are largely absorbed by materials and service costs -- in other
words, better workers need less help and do the job with less waste. The productivity
difference can be as high as 13%. The net extra costs are collected as profit by the
companies involved in providing the materials and services. [4]
Worker injuries increase after prevailing wage repeal -- as much as 15% in Utah. [3]
The resulting work may need to be redone or repaired; this was an issue with Michigan's
previous brief suspension of prevailing wage laws in the 1990s. [5]
The argument in favor of repealing the prevailing wage is that it saves the
state money. Does it?
No.
State contracting costs drop very little or not at all after prevailing wage repeals. [1,2,6]
The economic effects of prevailing wage repeal also cost the state money: one study [4]
suggests a loss to Michigan of "11,300 jobs, $700 million in local construction
investment and $1.7 billion in economic output."