Bay City Amends Prevailing Wage Ordinance

Right-to-work legislation has been introduced in Indiana and may actually win Gov. Mitch Daniels’ signature by the time Super Bowl Sunday arrives on Feb. 5. The Great Lake State may need to follow suit to compete economically.

Before it does, however, the people of Michigan should note that one city — Bay City —leapt headlong into the labor fray Monday night. Its city commission voted to amend the city’s prevailing wage ordinance to exempt contracts under $100,000 in value. The previous threshold was only $10,000. It also — quite significantly — eliminates the prevailing wage mandate when Bay City shares projects with cities that do not have a similar ordinance, such as Midland. The change requires a second confirming vote which will be made at the next city commission meeting this month.

A prevailing wage law mandates that union-scale wages be paid on construction work funded by taxpayer dollars, irrespective of the winning bidder. Federal, state and local prevailing wage laws can exist simultaneously. Statewide there are at least 15 such laws if you count the influence of federal and state statutes as well as such laws passed by local units of government.

To our knowledge, no unit of government in Michigan has ever completely repealed its prevailing wage ordinance, but this may be a first step. The state of Michigan, Bay City and other cities should do so.

Jimmy Greene, CEO and president of the Associated Builders and Contractors of Greater Michigan, said that “The ABC is excited about Bay City’s step in the right direction by making a decision to change the way it does construction business. It clearly demonstrates that it is open for business, safeguarding tax dollars without compromising quality, safety and the local influence of work.”

Mackinac Center analysts have calculated that if Michigan repealed its prevailing wage law, taxpayers could save at least $200 million annually. Bay City government is likely to save its taxpayers money, too, and so could every other Michigan municipality operating under this archaic practice if they were all repealed.

Paul Kersey, director of labor policy, provided public comments at the meeting, arguing that prevailing wages laws are ultimately just pay offs to union contractors.