Unions win, Republicans howl as Whitmer restores Michigan prevailing wage

LANSING — Gov. Gretchen Whitmer announced Thursday that Michigan will again require contractors to pay union-level wages and benefits to workers on state-funded construction projects.

In doing so, the first-term Democrat infuriated Republicans, who repealed a statewide “prevailing wage” mandate in 2018 and contend the policy inflates the cost of taxpayer-funded projects by raising prices for non-union contractors.

A legal challenge is likely to the move by Whitmer, who is up for reelection next year. But the governor's office said the GOP repeal initiative "left the door open" for her administration to still require wage guarantees within state contracts.

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Treating workers with "dignity and respect... starts with a fair wage," Whitmer said Thursday, arguing her policy shift could ultimately save the state money by increasing efficiency and favoring contractors who use union-trained labor.

"We are ensuring working people can earn a decent standard of living, saving taxpayers money and time on crucial infrastructure projects, and offering Michigan a highly-trained workforce to rely on as we build up our roads and bridges, replace lead pipes, install high-speed internet, and more," the governor said in a statement. 

Republicans and non-union contractors blasted Whitmer, accusing her of an “illegal” power grab and arguing she does not have authority to restore a policy the GOP-led Legislature repealed three years ago. 

"This isn't policy. It's overt partisan politics. And it smells of desperation," Senate Majority Leader Mike Shirkey, R-Clarklake, said in a statement. 

"We know union members are migrating to Republicans because of policy not politics. After losing the confidence of hardworking people in the building trades over her wasteful legal effort to shut down Line 5, she is trying to buy them back. They won't fall for this cheap stunt. These are people who work too hard to be fooled."

The policy may not have a huge impact on road construction because projects typically involve federal funding, which means federal wage guarantee rules already apply. Nor would it affect local governments that are typically responsible for constructing schools, jails and other government buildings. 

But Whitmer’s policy would have a direct impact on future projects financed by the state. It means non-union contractors would need to pay similar rates if they are going to bid on construction.

Michigan is currently building a new welcome center at the state Capitol, recently completed a new veterans home in Grand Rapids and is in the process of replacing an aged psychiatric hospital in Caro. 

Proponents and opponents of prevailing wage laws have pointed to conflicting studies to bolster their case.

A 2013 study from the conservative Anderson Economic Group, for instance, estimated that Michigan's former policy had cost taxpayers an extra $224 million per year.

But a 2018 study out of Indiana found repeal of that state's construction wage law led to fewer skilled workers in the field, more turnover, less productivity and lower wages.

While Michigan is the birthplace of the modern labor movement, unions have seen their power significantly curtailed by Republicans in Lansing in recent years. 

In 2013, then-Gov. Rick Snyder signed a right-to-work law that prohibited labor contracts making union dues or fees a condition of employment. The 2018 prevailing wage repeal had been another blow to unions, who on Thursday celebrated Whitmer’s new state policy. 

"When prevailing wages are the expectation, contractors have to compete on a level playing field based on quality of their skilled work, not on the exploitation of their workers," said Tom Lutz, executive secretary-treasurer of the Michigan Regional Council of Carpenters and Millwrights.

Non-union contractors and other prevailing wage opponents spent years — and more than a million dollars — to repeal a 1965 law that had required union-level wages and benefits on government-funded construction projects in Michigan. 

Snyder, a Republican governor, opposed the repeal. So opponents financed a petition drive to go around him, collecting more than 268,000 valid voter signatures to send the initiative to the GOP-led Legislature, which then enacted it into law. 

The process prompted accusations of improper lobbying. Earlier this year, a federal judge dismissed corruption charges against former state Rep. Larry Inman, R-Williamsburg, who had been accused of attempting to sell his vote to unions before ultimately backing repeal. 

Republicans called Whitmer's attempt to restore prevailing wage an "attack" on voters who had signed the repeal petition the Legislature enacted. 

The move “will raise costs on taxpayers and it will hurt Michigan’s construction workers," said Tori Sachs, executive director of the Michigan Freedom Fund, a conservative advocacy group.

“The truth is, Gretchen Whitmer knows what she did is illegal – she just doesn’t think the law and rules apply to her.”