Editorial: Fix roads without inflated union perks
Road building contractors in April agreed to require union and non-union subcontractors to pay into a union fringe benefit fund — which their non-union peers are barred from receiving. Members of the Republican-controlled Legislature are now trying to use the budget as a tool to ensure a better deal for taxpayers.
Lawmakers are right to raise awareness of this problem, though forcing the matter may cause some unintended consequences for Michigan drivers.
Tucked into the House transportation budget is Section 327, sponsored by state Reps. Matt Maddock, R-Milford, and Shane Hernandez, R-Port Huron. This section of the budget would bar the Michigan Department of Transportation from giving bids to contractors that require their subcontractors to pay into the same union fringe benefits as the general contractor, even if those subcontractors are non-union.
It follows a months-long dispute between the state, unions and contractors that began last fall and culminated in an April agreement between Operating Engineers 324 and roughly 40 road building contractors across the state. It also led to a three-week work stoppage in September, which needlessly delayed vital road projects.
Even though contractors agreed to the union's demands, lawmakers want to protect non-union subcontractors and workers from unfair demands. It would also protect taxpayers from footing the bill for more expensive road project costs.
Subcontractors would have to pay about $29 per hour per worker into trust fund payments used for union pensions, health care and training. This directly drives up costs for taxpayers.
"The state cannot be paying into road projects where some workers pay for pension funds they don't get," says Jeff Wiggins, state director of Associated Builders and Contractors, which represents nonunion contractors and is supporting the budget maneuver.
But there’s a downside: It could disqualify the vast majority of the state's largest road builders from receiving road project bids, potentially delaying road work from completion.
Operating Engineers 324 spokesman Dan McKernan says if this measure passes through the governor’s office, then 80 to 90% of the contractors who have completed road projects in the past five years would be barred from receiving bids.
Yet lawmakers hope to pressure unions and contractors into making a more fair deal.
Gideon D'Assandro, spokesman for House Speaker Lee Chatfield, R-Levering, says the budget measure would protect non-union subcontractors from these "unfair and exploitative" contracts.
MDOT could also consider hiring more non-union contractors to do road work. There are roughly 900 non-union employers who belong to Associated Builders and Contractors in Michigan, employing between 15,000 to 20,000 non-union workers.
Contractors and unions officials should revisit their agreement, which is unfair to non-union subcontractors. And just as we advocated for the end of prevailing wage, taxpayers shouldn't have to pay more for public projects to meet costly union demands.