LANSING – If the state ends its prevailing wage statute, it will not save money as supporters argue, a group of construction and union executives said on Monday.
In fact, repealing prevailing wage would make it more difficult to hire skilled trades workers, and eventually any savings would be negated because costs will go up, they said.
Already the state is down thousands of skilled workers over the past 15 years and companies are having difficulty now hiring individuals for skilled trades jobs, the executives said.
Michigan faces a “significant challenge” to keep construction trades shortage from getting worse, Vince DeLeonardis, president of Pontiac-based George W. Auch Company, said, and ending prevailing wage will add to the problem because it will make it more difficult for companies and workers to continue funding apprenticeship programs.
Mike Stobak, a vice-president with Detroit-based Barton Malow, said that when prevailing wage was suspended from 1994 to 1997, any savings local governments saw quickly vanished as construction prices went back up to the levels they were under prevailing wage.
The press conference with the construction executives, all members of the group Michigan Prevails, was held as state election officials are expected to soon release a sample of petition signatures to be checked to see if an initiative to repeal the state’s prevailing wage law has sufficient signatures to go to the Legislature for enactment, or to the public for approval in the 2016 election if the Legislature does not act.
Chris Fisher with the Associated Builders and Contractors of Michigan (one of the primary sponsors of the effort to end prevailing wage) said his organization was absolutely certain there would be enough votes in the Legislature to pass the proposal and bypass the need for an election.
But Herb Spence, of Spence Brothers in Saginaw, said lawmakers should let the public decide the issue. Most polls have shown the public opposed to ending the state’s prevailing wage law, Spence said.
Fisher argued that when prevailing wage was previously suspended in Michigan, there were 11,000 construction jobs created in the state. He also disputed charges that costs were effectively no cheaper when prevailing wage was ended than when it was in practice.
Fisher said plenty of studies have shown that government agencies see actual savings when prevailing wage is eliminated.
He also said it was no surprise that the contractors who held the press conference would support prevailing wage since their firms hire union workers. “They make a killing off the taxpayers,” he said.
Spence said any contractor, union or non-union, can bid on a project that involves prevailing wage. He said that is a system that ensures that companies get jobs on the basis of productivity and not for paying people less.
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