In Michigan the Republican controlled legislature repealed the prevailing wage law that applied to public construction projects. Supporters cited by the Detroit Free Press [Det. FP, June 7, 2018] claim repeal will save taxpayers money as projects paying prevailing wages “cost 10-15 percent more than if it was built by the private sector.” State representative Gary Glenn called prevailing wages a “discriminatory relic of the past.” He claims it will save “hundreds of millions of dollars.”
No one quoted in the Free Press mentions a dollar wage when speaking of a prevailing wage, but if repeal will save money then wages must fall and for wages to fall there must be a big surplus of labor. Since business keeps whining about labor shortages, they contradict themselves.
The U.S. Bureau of Labor Statistics reports the median wage for 50 construction and extraction occupations, which in Michigan is $22.67 an hour, or $47,167 a year. That puts Michigan 19th among the fifty states and the District of Columbia. A 10 percent cut would be $4,717 and leave $42,438 a year.
If, as seems likely, business contractors bid on public projects then there can be no guarantee the contractors will bid lower in response to repeal of a prevailing wage law. Unless there is vigorous competition among many contractors they maybe able to bid as usual and pocket the wage savings themselves. It appears quite likely taxpayers will get nothing from this repeal.
The Free Press reported that all Democrats in the House voted against the measure and therefore Republicans take the entire responsibility for repeal, which makes the whole episode another in string of examples of politics in a divided society. Saving taxpayers was just the excuse. Democrats will have to figure out why so many in the working class vote for Republican pickpockets who lower their standard of living.
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