Revise the Prevailing Wage Law To Focus on Low-Wage Workers

Another, simpler step that the state could take to rein in the cost of the prevailing wage while leaving a floor beneath construction wages is to establish what might be called a "median-wage rule." Under this median-wage rule, the state would still make use of collective bargaining agreements in setting prevailing wage rates, but the law would be focused on protecting the pay of lower-wage workers.

The rationale for this rule is fairly straightforward and entirely in keeping with Michigan’s traditional concern for low-wage workers. Michiganians hope to improve wages and working conditions for those on the lower rungs of the economic ladder, but most construction workers are not really on the lower rungs. Construction workers can and often will receive generous compensation for their skills and effort; there is no need for the state to mandate wages that are substantially above average for the community as a whole.

Under the median-wage rule, the Wage and Hour Division would mandate minimum wages equal to the lesser of the collectively bargained wage or to the median wage for all workers (not just construction workers) in the state with a reasonable adjustment made for fringe benefits.

With the median-wage rule in place, workers on state-supported construction projects would still be protected by a wage floor, but contractors (and, by extension, taxpayers) would not be forced by law to pay wages that are significantly higher than the average for all Michigan workers.

The median-wage rule would also require action by the Legislature, but compared to generating accurate prevailing wage determinations, this median-wage rule would be much simpler to draft and implement.