Michigan has now become the 5th state to repeal a prevailing wage law, joining Arkansas, Kentucky, West Virginia, and Indiana. According to the U.S. Department of Labor, twenty-two states do not have prevailing wage laws. Michigan’s prevailing wage law specifically covered construction workers on state financed projects.
The repeal of prevailing wage means billions in savings for Michigan taxpayers over just a few years thanks to construction project costs no longer being driven up by inflated wages. It’s a win for taxpayers in the tug of war with unions.
A study by the Anderson Economic group found that the act cost Michigan taxpayers an average of $224 million per year on K-12 districts, community colleges, and public universities from 2002 to 2012.
The legislation passed Wednesday in the House and the Senate, despite opposition from Democrats and some Republicans. The issue was brought to focus by Protect Michigan Taxpayers, who created a petition and sent it to the Capitol after obtaining substantial signatures.
While the legislature could have let citizens vote on it through a ballot in November, they decided to approve it themselves. Since the bill met a signature threshold and passed both chambers, it does not need to be signed by Governor Rick Snyder, a supporter of the prevailing wage law. Instead, the bill will become law immediately.
Republican state senators have argued that the prevailing wage law is outdated and burdensome to taxpayers. Michigan’s Prevailing Wage Act was passed in 1965.