Michigan’s Snyder Clashes With Fellow Republicans on Union Pay

Rick Snyder, governor of Michigan, speaks during an interview in New York, U.S., on Friday, July 26, 2013.

Photographer: Scott Eells/Bloomberg

As Republicans across the U.S. try to erode union power and protections, in Michigan they’re running into an unlikely stumbling block: Republican Governor Rick Snyder.

The Republican-dominated legislature is trying to repeal Michigan’s 50-year-old law requiring union wages for state-funded construction projects. Snyder says the lower pay that would come from scrapping the law would send the wrong message to skilled trade workers, whose ranks he wants to boost as the state continues its rebound from the recession.

Senate-passed legislation to repeal the so-called prevailing-wage measure awaits action in the House. In addition, outside groups that support Republican lawmakers are mounting a separate petition drive to kill the law and bypass Snyder’s potential veto.

“I have serious problems” with repealing the measure, Snyder told reporters May 19 in the state capital Lansing, though he wouldn’t say whether he’d veto the package. “I would much rather work on creating skilled trades jobs in our state by partnering with the very people that would be adversely affected by repealing the prevailing wage.”

As Los Angeles and some states raise minimum wages, others like Michigan where Republicans dominate are pushing to end union wages for public projects. That’s thrust Snyder into a political crossfire as he seeks to highlight Michigan’s economic health, which has improved at a faster rate than every state except oil-rich North Dakota since 2009.

Thirty-one states and the federal government require contractors building roads, bridges, schools and other public projects to pay wages and fringe benefits comparable to what workers are paid in surrounding areas. Ohio exempts school construction projects, and Michigan requires wages no less than local collective-bargaining agreements.

Pros and Cons

Critics of Michigan’s law say it hurts taxpayers by inflating wages, which robs funding for other job-creating projects. Supporters say such measures ensure quality workmanship on public projects and prevent out-of-state companies from low-balling bids with cheap labor.

In a state that is the birthplace of the United Auto Workers union, the issue predictably has stirred up partisan animus. Snyder infuriated Democrats and union members in 2012 when he signed a Republican-backed right-to-work law after insisting it wasn’t part of his agenda.

The governor has also bucked his own party by expanding Medicaid coverage under Obamacare, promoting immigration and calling for more taxes to pay for roads. Both Democrats and Republicans wonder if Snyder would actually veto a repeal of the prevailing-wage law, said Bill Ballenger, the founder of Inside Michigan Politics, a Lansing-based newsletter.

While the legislation was passed by the Senate this year, some House Republicans from districts with union influence fear a backlash if they vote for the repeal, Ballenger said.

The repeal is a House Republican priority, though there’s no timetable for action, said Gideon D’Assandro, spokesman for House Speaker Kevin Cotter.

Petition Drive

“The speaker thinks it’s the right thing to do for Michigan taxpayers,” D’Assandro said.

The petition drive led by businesses, including non-union contractors, is seeking 253,000 voter signatures to force a legislative vote that Snyder couldn’t veto. If lawmakers were to fail to approve the repeal, voters would decide the issue on the November 2016 ballot.

Snyder, 56, has said he won’t run for president in 2016, quelling speculation that he might try to wedge into the Republican primary as a less-partisan pragmatist. He points to the state’s economic rebound: Michigan unemployment dropped to 5.4 percent in April, the first time it’s equaled the national average since September 2000. The state’s jobless rate peaked at 14.2 percent in August 2009.

Snyder has said he wants Michigan to lead states in training people for skilled trade jobs, which include construction work that may be affected by state wage laws.

Indiana Repeal

In Indiana, Republican Governor Mike Pence this month signed a measure repealing an 80-year-old law that set construction wages for public projects. The repeal was backed by Americans for Prosperity, a free-market advocacy group formed by billionaire industrialists Charles and David Koch.

In March, Nevada exempted school construction projects from its prevailing-wage law.

Republicans have an overwhelming majority in Michigan’s legislature. They control the Senate 27-11; their 63-47 majority in the House isn’t enough to override a veto.

A poll this month shows 49 percent of Michigan voters favor keeping the prevailing-wage law, while 29 support repealing it. The survey of 400 voters by Lansing-based EPIC MRA was conducted May 19-20, and has a margin of error of plus or minus 4.9 percentage points.

Support in the legislature to repeal the law has “reached critical mass,” said Chris Fisher, president of the Associated Builders and Contractors of Michigan, which is leading the petition drive.

“It’s guaranteed this issue will be settled once and for all in 2015,” Fisher said. “We think it’s important to stand up for fiscal accountability.”

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