Skip to main content Skip to search

Posts by Gary Johnson

An Examination of Minnesota’s Prevailing Wage Law

This is a prevailing wage study completed in May 2018 that examines the effects of Minnesota’s Prevailing Wage Law on costs, training, and economic development.  The study was authored by Frank Manzo IV, M.P.P. from the Midwest Economic Policy Institute and Kevin Duncan, Ph.D, BCG Economics, LLC and Professor of Economics, Colorado State University-Pueblo

Click here to read the complete study.

Read more

Another One Bites the Dust In Michigan

Michigan Repeals Prevailing Wage

On June 6, Michigan became the 6th state in the last three years to repeal its Prevailing Wage law. The repeal was originated and pushed by the Associated Builders and Contractors, Inc. (ABC). It began as a citizen-driven petition that required 250,000 signatures to send the repeal bill to the state legislature. The citizen petition process bypasses the governor, and can be decided either by the Legislature or the Legislature can choose to send the proposal to voters directly. In this case, the Legislature chose to pass the repeal itself. Several people tried to save the law, including every Democratic legislator and several Republican lawmakers. But they didn’t have enough votes.

Prevailing Wage prevents erosion of construction industry standards by requiring contractors on public construction projects to pay standard wages and benefits for the geographic area. These laws originated in the 1890s to foster development of state construction industries and enjoyed bipartisan support for decades, with 41 states and the federal government implementing Prevailing Wage by the 1970s.

Proponents of repeal claim it will save the state hundreds of millions of dollars every year. The savings are expected to come directly from the wages of the construction workers who currently earn Michigan’s prevailing wages. These wage victims are the non-union construction workers who usually work for… you guessed it, Contractors in the ABC.

Opponents of repeal say that it will erode safety and training standards and hurt the construction industry’s ability to attract and retain skilled workers.

Evidence, Not Ideology

When deciding matters of public policy, information matters. However, the evidence presented by opposing sides on an issue like Prevailing Wage is often treated as equally valid by the media, even if there are significant methodological and analytical differences.

In this case, the information cited by Protecting Michigan Taxpayers—the ballot committee that gathered signatures for repeal—was a 2013 study by the Anderson Economic Group,  which found that Michigan overspent on education construction by $224 million per year from 2002-11. However, a report by Peter Philips, Professor of Economics at the University of Utah, found serious flaws with the Anderson Group study, including miscalculating the proportion of project costs taken up by blue-collar labor, and failing to account for decreases in worker productivity associated with falling wages and benefits. Prof. Phillips then applied the Anderson Group’s own methodology to more correct information and found that Prevailing Wage repeal would not have any cost savings.

Recent evidence from Prevailing Wage repeals in West Virginia (2015) and Indiana (2015) find no cost savings associated with repeal. In fact, the only real consequences of repeal have been significant declines in construction worker wages and benefits, increasing numbers of out-of-state contractors doing taxpayer-funded construction, and decreasing the quality of construction.

Prevailing Wage is Good for Minnesota Taxpayers

At its core, Prevailing Wage is a matter of public policy. It affects the health and vitality of a critical sector of the economy and prevents destabilization of the construction market by big infusions of government spending. While there are conflicting narratives about the impact of Prevailing Wage, the preponderance of peer-reviewed and methodologically rigorous research lead to an inescapable conclusion: Prevailing Wage is good for taxpayers. It does not affect overall project costs, and in fact has many positive consequences, including increased worker training and productivity, decreased reliance on public assistance programs among construction workers, and economic stimulus resulting from public construction wages staying within communities.

When spending taxpayer dollars on construction, we should demand that they maximize the benefits to communities, and Prevailing Wage ensures that happens.

 

Read more

Union Building Trades Strengthen School Curriculum

Union Building Trades Strengthen School Curriculum

Minnesota is implementing the North America Building Trades Union (NABTU) Multi-Craft Core Curriculum (MC3) in several schools throughout the state to introduce pre-apprentices and secondary students to the various building trades.  Click here to view a video explaining MC3.

Multi-Craft Core Curriculum MC3

In 2007, the National Standing Committee on Apprenticeship and Training of North America’s Building Trades Unions identified common elements from all building trades’ apprenticeship programs, without regard to a particular craft.  In other words, a “common core curriculum.”  

This was the basis for the Multi-Craft Core Curriculum, which is increasingly being used as the foundation for pre-apprenticeship programs across America.

The specific topics that are taught in the Multi-Craft Core Curriculum include:

  • General orientation to apprenticeship
  • Intro to the construction industry
  • CPR and first aid
  • OSHA 10-hour safety certification
  • Blueprint reading
  • Applied mathematics for construction
  • Identifying and preventing sexual harassment and discrimination
  • History of the construction industry
  • The heritage of the American worker
  • How to interview effectively 
  • Green construction techniques and standards

The Multi-Craft Core Curriculum provides a gateway to a  career in any of the Building Trades; from high school to joint registered apprenticeship to community and four-year college and beyond.  Congratulations to the participating schools and the Minnesota Building Trades Councils for bringing trade careers back into our schools.   Click here to view a video explaining MC3.

 

Read more