Published in the MIDLAND DAILY NEWS
By Rep. Gary Glenn
I appreciate a recent Daily News guest opinion (“The house that Gary built,” Aug. 9) calling public attention to a current citizens petition drive to repeal Michigan’s so-called “prevailing wage” mandate and allow competitive bidding on building new roads, schools and other government construction projects, a move that will save taxpayers hundreds of millions of dollars a year.
Americans overwhelmingly support the principle of competitive bidding. It’s a well-understood principle we apply almost every day of our lives: seeking the best value available. For a given good or service, we seek the highest available quality for the lowest available price. This creates intense competition to sell goods at lower prices and higher quality for the best value on the dollar. It’s the foundation of the law of supply and demand, the basis of a free market economy.
The principle is the same for labor and other services. When businesses compete for government construction projects, taxpayers benefit both from lower costs and higher quality.
Michigan’s so-called “prevailing wage” mandate, however, is a special interest price-fixing scheme that flies in the face of free and fair competition, a holdover from the days when Big Labor controlled policymaking at the state Capitol in Lansing. Obviously, there’s no incentive to provide higher quality at a lower price when the price is already dictated by a law that requires the state and our local school districts to pay union scale wages and benefits any time tax dollars are used to build new roads or schools.
This government price-fixing scheme gives special treatment and benefits to the roughly one-fifth of construction workers who work under a union contract, while preventing the non-union contractors who employ the other 80 percent of construction workers from being able to competitively bid — and all at taxpayers’ expense, to the tune of hundreds of millions of dollars in increased construction costs each year. (And by the way, it’s an insult to the skills and professionalism of that other 80 percent of construction workers to argue, as defenders of government price-fixing and union preferences routinely do, that allowing non-union contractors the opportunity to bid on government construction projects will result in lower quality workmanship.)
But from the taxpayers’ viewpoint, the Mackinac Center for Public Policy estimates that repealing Michigan’s inflationary “prevailing wage” mandate would save us $400 million a year.
Anderson Economic Group, a Lansing research firm trusted and hired by clients as ideologically diverse as the Michigan Chamber of Commerce and Michigan Education Association teachers union officials, estimates that repeal would save taxpayers $224 million a year on public school construction alone – enough savings over the last 10 years to have built 300 additional elementary schools.
Taxpayers should no longer be forced to pay above-market costs for what competitive, fair and open bidding would provide for less. Savings in school construction projects could go to teachers and students in the classroom rather than putting up the walls around the classroom. Savings on state-funded road projects would fund more construction and maintenance, which most agree is urgently needed.
It’s simply not fair that taxpayers continue to be forced to pay an artificially inflated cost of labor for government construction projects. Nor is it fair to non-union contractors and their employees — who are willing and able to provide a better value for the same work product — but are arbitrarily rendered uncompetitive by being forced by this special interest law to charge taxpayers more. Such mandates mean non-union contractors typically don’t bid at all. That lack of competition ensures taxpayers will pay hundreds of millions a year more than we should for roads and schools.
I’ll vote to repeal Michigan’s so-called “prevailing wage” mandate on the principle that the wages and benefits paid by taxpayers on government construction projects should be determined by where supply meets demand as decided by open and competitive bidding in which all contractors, union and non-union, are free to compete on an equal basis without government price-fixing.
I encourage all taxpayers to contact me on this and any other issue of concern. Please contact my office at (517) 373-1791, toll-free at 1-855-GLENN98, or via e-mail at GaryGlenn@house.mi.gov. It’s my duty, responsibility and honor to represent the citizens of Midland and Bay counties in the state House of Representatives. Thank you for that privilege.
Rep. Gary Glenn, R-Midland, represents the 98th House District comprised of the city of Midland, six adjacent townships in Midland County, and seven rural townships in Bay County.