Bay City Repeals Prevailing Wage Ordinance

Late last night on a 5-4 vote, Bay City commissioners chose to repeal that city’s prevailing wage ordinance, something no city in Michigan may have ever done, to our knowledge. A prevailing wage law mandates union scale wages on government funded construction projects, regardless of who wins the bid.

Commissioners at their previous meeting amended the city ordinance to make all contracts under $100,000 exempt from the prevailing wage ordinance. I covered that story in a Jan. 10 blog post titled “Bay City Amends Prevailing Wage Ordinance.” It was expected that commissioners would confirm that vote at last night’s meeting, but things changed when the Associated Builders and Contractors Saginaw chapter dropped a lawsuit against the city it had previously filed over the prevailing wage ordinance itself.

The Masud Labor Law Group represented ABC of Greater Michigan, but because one of the city commissioners is a lawyer with that firm, she had to recuse herself from previous votes on the prevailing wage question. With the lawsuit being dropped last Friday, it freed up one more vote in favor of a total repeal of the ordinance.

About 14 other cities maintain such laws in Michigan, as does state government. Mackinac Center analysts have estimated taxpayers could save $200 million annually if the Legislature were to repeal the prevailing wage statute. Perhaps Bay City will be a catalyst for that.

“We are looking for opportunities for citizens to save money,” said Jimmy Greene, President and CEO of ABC of Greater Michigan. “The conversation around the country is about taxpayer dollars. When you know there is money to be saved by repealing such laws, officials should be obligated to do so. This is not about union or nonunion construction shops. It’s about saving taxpayer dollars.”

In this particular debate Greene was not a lone voice. None other than The Bay City Times weighed in on the issue last Sunday, describing the city’s prevailing wage law as “pure protectionism for union workers and the contractors who employ them.”

The commission will need to have a second, confirming vote at its next meeting, but Greene said he expects the same result.

It seems the tide is turning in labor debates. In other labor news the Indiana State Senate passed right-to-work legislation last night 28-22, though reports out of Indiana indicate that the House version of the bill will be the one that “actually drives the issue.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.