McNeilly: End the prevailing wage in Michigan
Would you like 3,600 new public school teachers?
Maybe you’d prefer 561,404 brand new iPad Air tablets every single fall — enough to provide one cutting-edge device to every high school student in the state.
What about almost 1.9 billion new No. 2 pencils?
Michigan’s public schools could do a lot with $224 million, and with the help of Michigan’s new legislative leaders this year, they may just get the opportunity.
That’s because lawmakers in both the state House and Senate last week unveiled their number one legislative priority for the new year — repealing Michigan’s 50-year-old prevailing wage law to ensure hundreds of millions of tax dollars are spent on Michigan communities where they were intended, not on inflated construction costs.
Unfortunately, that’s not happening today.
While most taxpayers expect government officials to request multiple bids to ensure the lowest possible cost and best possible taxpayer value before handing out contracts, Michigan’s prevailing wage law forces the government to do the exact opposite.
Instituted in 1965, prevailing wage mandates that any government building contract, including public school contracts, pay union wages and abide by union rules, even if lower cost bids may be available for the same products and services.
According to a study completed in late 2013 by the Anderson Economic Group, the law costs Michigan schools alone $224 million every year.
It costs local governments tens of millions more.
Prevailing wage is a scheme that artificially and intentionally raises costs on taxpayers and drains the bank accounts of schools and local units of government, all to enrich labor union bosses, who pocket big profits.
Prevailing wage kills good paying jobs.
Regardless of what union bosses tell you, the same people who likely built the home you live in are denied the opportunity to competitively bid on public sector construction projects due to this legalized corruption.
During the mid 1990s, the law was suspended by a federal district court ruling and, according to the U.S. Department of Labor, as non-union construction companies competed on an equal footing for the first time in decades, the state gained 11,000 construction jobs.
Under prevailing wage, union bosses get richer while non-union builders and contractors lose money, taxpayers get charged more, and school children have to do with less.
Michiganians will still receive the same safe, high-quality construction services, performed by Michigan workers making great wages. But they’ll get those services at market value — according to the Department of Labor, the average free market construction labor rate is about $47,000 per year — while saving a boat load of cash.
$224 million a year is enough money to put one more teacher in every public school building in the state of Michigan, or to provide $146 in school supplies to every one of the state’s 1.5 million K-12 students, or to equip every student in the state with an e-reader in just a few years’ time.
Eliminating prevailing wage makes sense, is the right thing to do, and helps school children.
Lawmakers are right to pursue these savings, and they should be applauded for putting Michigan students first.
Gov. Rick Snyder should do the same and sign the bills if they make it to his desk. Some 44 other states already have.
Greg McNeilly is president of the Michigan Freedom Fund.