According to a recent study by the Lansing, Mich.-based Anderson Economic Group (AEG), Michigan’s prevailing wage law costs taxpayers and the state’s public schools millions each year in higher construction costs—adding up to more than 315 elementary school buildings that could have been built in the past decade with the money lost to prevailing wages.

“Over the past 10 years, Michigan taxpayers spent $224 million per year more on construction projects for K-12, community colleges and higher education than they would have without the state’s prevailing wage law raising construction labor costs,” says Alex Rosaen, a senior consultant at AEG and one of the study’s authors.

“The findings add to the mounting evidence about the wastefulness of prevailing wage and provide further support for repeal of the law,” said Chris Fisher, president of ABC of Michigan, which commissioned the impartial study. “Not only is the law costly and outdated, but it denies local choice to school and university leaders who are entrusted by citizens to wisely manage financial resources.” 

Michigan’s prevailing wage law, on the books since 1965, requires all construction firms to pay wages and abide by work rules based on provisions in union agreements, even though unions represent less than 20 percent of the industry’s workforce. The study was released as ABC-supported bills that would eliminate Michigan’s prevailing wage law are pending before the state legislature.

“Prevailing wage requires the public to pay artificially high wages on state-backed construction projects, reducing money for other vital needs with no return on investment for such unjustifiable cost overruns,” Fisher said. “At a time of depleted education budgets, parents, students and taxpayers deserve more than being saddled with unfunded mandates such as prevailing wage.”

The full study on Michigan’s prevailing wage law is available at www.PrevailingWageTruth.com.