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Jul
2015
30

U.S. Sen. Peters on Prevailing Wages: “Getting rid of them makes no sense.”

Right thing-doer, Gary Peters.

Right thing-doer, Gary Peters.


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With prevailing wage repeal still a hot-button topic in Michigan, some political leaders are taking their message to the masses in hopes of keeping the law on the books.  Since taking control of the Senate, Republicans have made prevailing wage repeal a top priority, spearheaded by Arlan Meekhof and against GOP governor Rick Snyder’s wishes.

But Snyder is not alone in opposing repeal. Several Republicans have voted against it and a June poll showed that likely voters support the prevailing wage by more than a two-to-one ratio.

Now, U.S. Senator Gary Peters is weighing in, decrying special interest attempts to dismantle this important wage protection at a time when the country is finally beginning to move forward from the financial woes that nearly destroyed Michigan almost a decade ago.  Peters highlights the quality of worker that solid wages generate and the importance of ensuring that state- and federally-funded projects are done correctly the first time:

These laws, at both levels, ensure that our skilled workers can earn a decent living while making our communities safer. Getting rid of them makes no sense.

Prevailing wage requirements help ensure contractors who want to work on government-backed projects employ skilled workers who are more productive and better qualified to do the job. It ensures that contractors do not use underhanded tactics to avoid paying taxes or workers’ compensation. And for Michigan, the state law prevents dishonest contractors from being able to undercut our local contractors by bringing in lower-paid, out-of-state workers.

With the prevailing wage, we can better guarantee that construction sites around the state — our roads and bridges, our downtown developments and our schools — will be safe. Construction sites can be dangerous, but requiring workers who are safety-certified mitigates these hazards. This protects our children and residents from preventable accidents and safety violations.

Peters recognizes the value of training and skills. Lowering standards is risky business, he explains:

Proponents of repeal argue that prevailing wage laws inflate the cost of government construction projects. The reality is that hiring under qualified workers instead of the best-trained workers to do it the right way is not a good long-term investment of taxpayer dollars. When we expect these large-scale projects to last decades or longer, quality matters. A project is always cheaper in the long run when it is done right, on time, the first time. Preventing cost overruns and reducing maintenance costs caused by cut-rate construction protects both the safety and pocketbooks of Michigan taxpayers.

Research has consistently shown that because trained construction workers perform more efficiently than untrained workers, a prevailing wage allows government projects to pay middle-class wages to skilled workers at no additional cost to taxpayers. Repealing laws that demand better wages for better work while keeping costs down would hurt Michigan’s working families — and ultimately our economic recovery.

The key word here is “research.” The evidence supports the prevailing wage, as Kevin Duncan and Alex Lantsberg argue in a Detroit News op-ed:

Would you support cost-neutral legislation that would eliminate thousands of jobs, force thousands more onto public assistance, suppress economic growth, export hundreds of millions of dollars out of Michigan, necessitate additional cuts to vital public services and undermine the quality of our public highways, bridges, hospitals, and schools?

Of course you wouldn’t.

And Gov. Rick Snyder has made it clear that he will not either.

The two researchers provide further data to disprove the concept of giant cost savings related to prevailing wages.  In fact, as Duncan and Lantsberg point out, repeal creates a whole new set of costs:

The argument these repeal proponents make—and one that has long been rejected by reams of peer reviewed research and leaders of both political parties—is that cutting the wages of the skilled professionals who build our public infrastructure saves money.

Problem is, it doesn’t. And there is absolutely no consistent evidence to suggest otherwise.

A comparison of prevailing wage and non-prevailing wage states shows that any savings from lower wages are immediately offset by lower worksite productivity and far more spending on fuels, materials, equipment and other services, a direct result of the fact that prevailing wage states rely more on home grown talent and higher skilled professionals to get the job done right the first time.

Using industry standard IMPLAN software to model the economic impact of the proposed policy change, the researchers found that prevailing wage repeal would eliminate more than 11,300 jobs and $1.7 billion in economic activity statewide. Adding insult to injury, $28 million of state and local tax revenue would be lost. 

So much for savings.  

A primiary concern of the labor movement, of course, is local work for local workers. In an op-ed The Times-Herald, Dan Husted, Business Manager of LIUNA Local 1075, explains how repeal would open doors for Michigan projects to be manned by out-of-state, fly-by-night contractors:

Prevailing wage is the best way to ensure taxpayers and citizens are getting the most out of their tax dollars on construction projects. Prevailing wage acts as a minimum wage on publicly financed construction projects, and it ensures that workers are well-compensated for quality work in dangerous conditions. There are additional unintended consequences to a repeal apart from lowering wages.

A prevailing wage repeal would open the door to unscrupulous out-of-state contractors who want to reap the benefits of our tax dollars. They do this by shipping in low-wage workers to work on construction projects. Then those workers take their paychecks back home out of Michigan. The last thing we need are out-of-state contractors swooping in and taking away our local jobs.

The GOP’s efforts to tear construction workers down may be steadfast, but opposition voices are multiplying and amplifying in kind.

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