Do You Pay Double For What You Buy?
How does Michigan’s prevailing wage law hurt Michigan taxpayers?
I just read a great article titled “How Michigan’s Prevailing Wage Law Raises Costs” written by Jarrett Skorup and published in Michigan Capitol Confidential, which explains how Michigan’s Prevailing Wage Law costs Michigan taxpayers millions of dollars.
The Michigan Capitol Confidential cited an example in rural Dickinson County, located in the Upper Peninsula on the Michigan-Wisconsin border, where they say the cost of living is low and the median household income is about $44,000.
Their example is about Steve Zurcher, the owner of St. George Glass & Window located in Iron Mountain. He pays his glaziers about $20 per hour. That’s the market wage for qualified glass-installers in the area.
Now, the Prevailing Wage Law steps in, because it is not the politician’s money it is yours, so they do not care how much they spend.
Per the article, “The State of Michigan doesn’t care about market or privately-negotiated wages. Because of the state’s 'prevailing wage' law, any glazier in Dickinson County who works on a taxpayer-funded construction project is mandated to be paid $43.53 per hour."
Yes, Michigan must pay more than double the going wage for the same work — not even the same work but the same workers.
You see, according to the article, “prevailing wage laws force government and publicly-funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. In Michigan, this minimum construction wage is mostly arbitrary, not taking into consideration private-sector wages or the cost of living in an area.”
What does this mean to you, as the Michigan citizen who pays the politicians' bills?
As the Michigan Capitol Confidential article states, “This means, for the majority of construction projects for local schools, Zurcher’s company isn’t allowed to pay his employees their privately-negotiated wages. Instead, the state forces an inflated minimum hourly wage of over $43. That doubling of labor costs comes from the school’s budget, and ultimately from taxpayers. This also causes other negative effects, like less workers on projects.”
The article goes on to say, “In September of 2014, Zurcher won a bid to do work for a new welcome center at Michigan Technological University. His base bid for the work was $84,000 with labor costs totaling $23,636 of that. But the cost was inflated because of the state’s prevailing wage law. Without the law, the university would have paid $72,504 for the project with labor costs totaling $12,139. Michigan Capitol Confidential examined documents verifying this information.”
The Michigan Capitol Confidential article then extrapolating those savings to every government-funded construction project in Michigan and determined the following: “A 2013 study from the Anderson Economic Group found that the law costs school districts about $224 million annually in mandated extra costs. But it’s not just schools: State and local government projects are also subject to the mandate, limiting their negotiating power when seeking bids."
Does this change your opinion of Michigan’s Prevailing Wage Law?
Can you see how the politicians are using your money to pay their union bosses off who then in turn give them some of the money back in donations?
Who is the only one getting the shaft in that deal? You and me, that is who.
Would you pay more than double for the same product if you did not have to?
How many union members do you think shop at Sam’s, Costco, Wal-Mart to save money?
Would union members pay double for the products they buy? If you are a union supporter and would not pay double for the same product, then how can you support Michigan’s Prevailing Wage Law?
Or am I comparing apples to oranges?
Let’s discuss this tomorrow (Friday) on my show the Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.
Or please feel free to start a discussion and write your thoughts in the comment section.