News Story

Michigan bill would force prevailing wage on private businesses

Not even Michigan’s old prevailing wage law, which was repealed in 2018, applied to private business

Should State Rep. Rachel Hood, D-Grand Rapids, find herself in a position of power in January, she will likely require private businesses to abide by a prevailing wage policy when awarding a contractor bid for renewable energy projects.

House Bill 6099, introduced by Hood on May 11, would require union wages for private renewable energy projects. Not even the prevailing wage law, which was repealed in 2018, required that.

Prevailing wage typically refers to the pay and benefits contractors and vendors are required to offer their employees when doing business with a government agency. Gov. Gretchen Whitmer reinstated prevailing wage for those doing business with the state by way of an Oct. 2021 press release.

Steve Delie, director of labor policy at Mackinac Center, says Hood’s bill could raise energy costs.

“The problem with this bill is the same problem that prevailing wage policies have generally—this will lead to increased costs and decreased competition,” Delie told CapCon. “As we unwisely transition away from reliable energy, this bill would further increase the costs of wind and solar projects, without any accompanying benefit.”

The Department of Management and Budget, at the behest of Whitmer, re-implemented the state’s prevailing wage policy without going through the Administrative Procedures Act, which is usually required. If the department had followed the act, it would have then been required to post the proposed rule change and allow the public and interested parties to comment.

Mackinac Center for Public Policy sued on behalf of their client, Associated Builders and Contractors of Michigan, due to Whitmer and the department not using legislation or the procedures act to implement the policy.

The Michigan Court of Claims ruled against ABC. However, Mackinac Center Legal Foundation is filing an appeal.

Rep. Hood did not respond to a request for comment.

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.