Michigan votes to repeal prevailing wage law

The Michigan Legislature voted to repeal Michigan’s prevailing wage law on June 6. According to Associated Builders and Contractors, Inc. (ABC), the 50-year-old law overcharged taxpayers on public construction projects and limited competitive bidding opportunities for Michigan workers. The vote makes Michigan the 24th state without a prevailing wage law. 

“For the first time in decades, Michigan will be a place where fair and open competition will be welcomed on public construction projects” Jeff Wiggins, state director of the Associated Builders and Contractors of Michigan, says. 

In addition to forcing businesses to adhere to inflated union contract terms on public projects, critics say the regulations are just as bad. In 2017 alone, Michigan published more than 500,000 prevailing wage designations, resulting in almost four times more classifications than there are construction workers in the state.

The inflated costs associated with prevailing wage laws have been documented in studies from across the country, including Michigan and Ohio. ABC says these studies provide ample evidence that repeal would save hundreds of millions of dollars, citing a Ohio Legislative Service Commission report that showed almost $500 million in savings in the first four years following Ohio’s repeal of its prevailing wage law on school construction.

“Michigan is the sixth state since 2015 to repeal their archaic and costly prevailing wage law,” Ben Brubeck, vice president of regulatory, labor & state affairs for ABC National, says. “Studies and anecdotal evidence suggest eliminating prevailing wage red tape will decrease the cost of doing business for local and state governments, creating the opportunity for more projects, more schools, more infrastructure and more employment opportunities for small-business contractors and their employees in the local community.”