ABC is strongly opposed to job-killing prevailing wage requirements.
ABC believes in strong, competitive wages. This means having wages that are neither artificially low nor high. When government requires that state prevailing wage be paid on publicly funded construction projects, wages are artificially inflated by as much as 40 to 60 percent above private sector averages.
Prevailing wage cost inflation makes public construction uncompetitive and puts an undue strain on contractors and on state and school budgets. Repealing the state prevailing wage mandate would create more good paying jobs and help the construction industry compete with the 44 other states that either have no such artificial mandates or that have at least chosen to base wage determinations on more accurate and reliable measures. Right now, Michigan is tied for worst in the country. We need to do better!
Without prevailing wage, Michigan’s construction industry already pays its workforce an average annual salary of $47,000 (which is a better wage than the state average for all industries combined). Michigan’s construction industry - the only industry that is subject to prevailing wage in Michigan - should not be penalized for already doing the right thing.
Learn more about how Prevailing Wage harms our Michigan economy.
In Michigan, prevailing wage doesn’t “prevail.” It's not like a minimum wage - it’s based on collective bargaining agreements, which cover only 17 percent of the state construction workforce but are imposed on 100 percent of workers. Such a lopsided scheme is hardly “prevailing.” The state of Michigan and taxpayers aren’t even allowed at the bargaining table in determining rates.
The Michigan prevailing wage agreements are not subject to any administrative or legislative oversight or negotiation. Because there's no fiscal responsibility to taxpayers in prevailing wage, research routinely finds that these requirements inflate government-funded construction costs by approximately 10 percent without any additional gain or return on investment.
Prevailing wage is a red tape nightmare that forces the construction industry to monitor more than 350,000 different wage classifications. That’s more wage classifications than there are construction workers in Michigan.
Best practices seen in other states (and common sense) all point to it being time to repeal Michigan’s prevailing wage.
We need to encourage our construction industry to grow, not create undue burdens on these businesses.
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