Thursday, September 6, 2007

Get rid of the prevailing wage

This is just one of many policy changes that could be made to improve economic conditions in Michigan. The prevailing wage law in Michigan compels the state to pay prevailing wages on any state-supported construction contracts. That means union scale wages which are 15% or more higher than "merit shop" wages.

Are unions bad? Do they charge too much? Maybe, maybe not. But unfortunately, because of the prevailing wage law, school districts, for example are not allowed the freedom to grant a contract to a construction firm whose employees are willing to work for less than prevailing wage, thus lowering the cost of the project. They have no CHOICE. They MUST pay the prevailing wage.

If we repealed the law, school districts could still choose to pay the prevailing wage, or grant the contract to a lower bidder who has willing workers who are paid less. The statewide impact on school construction alone could be as much as $250 million per year.

The Grand Rapids Press did a great opinion piece on it yesterday. Read it here:

No comments: