Editorial: Put an end to prevailing wage
The Legislature is on its way to repealing the state's prevailing wage law. The measure artificially drives up the costs of public construction projects for schools and other government buildings. That's bad for taxpayers, school districts and job seekers.
Republican leaders in the House and Senate have made repealing the prevailing wage a priority this year, and the Senate has already voted to remove it from the books.
The House should follow suit.
Prevailing wage rules require contractors to pay the local union wage on public construction projects, whether or not their workers are in the union. They inflate the cost of building schools and other public structures, adding 10 to 15 percent to overall project costs.
The prevailing wage is based on collective bargaining agreements that cover only 19 percent of the state workforce.
The Michigan House says 10 other states have repealed their prevailing wage laws. Only six other states have prevailing wage laws as strict as Michigan's.
Gov. Rick Snyder has said he's not interested in getting this bill on his desk.
But given how the governor is committed to making Michigan government more efficient, a veto would run contrary to his agenda.
Snyder has expressed concern that ending the prevailing wage would make skilled trade jobs less attractive. And the state has a shortage of workers for such positions. The skilled trades and workforce development will also be a focus of the Detroit Regional Chamber's Mackinac Policy Conference next week.
An estimated 80,000 jobs are unfilled in Michigan because employers can't find trained workers.
If school districts and municipalities are able to fund more projects once prevailing wage is repealed, that should create a demand for even more workers.
While encouraging individuals to pursue the skilled trades is a worthy aim, taxpayers should not be asked to artificially inflate their pay.
Jobs in the trades already pay good wages. The shortage of workers in the trades is not a product of anemic pay, but rather a failure of the education system. Most school districts have ignored vocational training in favor of college readiness, leading more to opt for a college degree instead of a welding mask.
A 2013 study from the Anderson Economic Group highlights just how costly the prevailing wage law is for the state.
Public universities, community colleges and school districts — or rather taxpayers — have to pay an additional $224 million a year, thanks to the law.
In addition to the support of many GOP lawmakers, the Michigan Chamber of Commerce and Associated Builders and Contractors of Michigan favor repealing the law.
Supporters of the law maintain the prevailing wage raises the quality of work on projects. But it should be the responsibility of the government entity bidding on a project to ensure a construction company will offer competent work at a fair price.
Complying with the law is a major paperwork headache for contractors. They have to figure out the prevailing union wage in a variety of job categories and locales.
The law drives up costs for taxpayers and limits the amount of public work that can be done.
Michigan would be better off without it.