SHARE
Courtesy | Col­legian Archives

Michigan Gov. Gretchen Whitmer rein­stated pre­vailing wage require­ments on state projects Oct. 7. 

The move came in the form of an exec­utive order, over­riding the Repub­lican-led Michigan legislature’s 2018 repeal of pre­vailing wage laws. Whitmer cited the Man­agement and Budget Act as her source of authority for the order. 

The pre­vailing wage law requires private con­tractors to pay union rates on state projects. Union leaders, such as Tom Lutz of the Michigan Regional Council of Car­penters and Mill­wrights, said this allows for a “level playing field” between unionized and non-unionized con­tractors, according to the governor’s office.

Free-market advo­cates claim that the higher rates on pre­vailing wage con­tracts cost tax­payers more and reduce the amount of work that can be completed. 

In a statement released by the governor’s office, Lutz claimed that pre­vailing wage laws also prevent the exploitation of workers.

The Public Service Research Foun­dation, a national group, said in a press release that unions use pre­vailing wage laws to increase pay rates for their members. The group cited an Oklahoma case where a union official reported fake workers, at fake rates of pay, on fake projects. The PSRF also cited a 1983 Carter Admin­is­tration study that found pre­vailing wage laws result in addi­tional inflation of nearly 0.25 percent. 

Michigan Senate Majority Leader Mike Shirkey, a Repub­lican rep­re­senting the dis­trict that includes Hillsdale County, said Whitmer’s order is purely a political ploy, saying that it “smells of des­per­ation.” Shirkey also pointed to recent elec­toral trends, which he claims show that union members are “migrating to the Republicans.”

“At the end of the day, Gov. Whitmer has to live with the fact she cast aside the will of the public and the Con­sti­tution to attempt to pur­chase public favor,” Shirkey said in a statement.

Maxford Nelsen, Director of Labor Policy at the Freedom Foun­dation, said private sector unions have an interest in gov­ernment policies because of issues like the pre­vailing wage.

“It is a requirement that arti­fi­cially increases the cost of gov­ernment con­struction projects and makes things more expensive for tax­payers than they need to be,” he said. “It’s taking money out of the economy, espe­cially at the state level.”

According to Nelsen, states don’t have the same spending and bor­rowing ability as the federal gov­ernment. To institute a pre­vailing wage requirement, he said, the state will have to cut spending or increase taxes.

“It is a benefit to a small group, but the broader pop­u­lation of tax­payers and gov­ernment service recip­ients will be paying for it,” Nelsen said.

Logan Washburn con­tributed to this report.