Mackinac Center for Public Policy: The Effect of Michigan’s Prevailing Wage Law

A study by the Mackinac Center for Public Policy estimates that Michigan's prevailing wage law, which requires union wages to be paid on state construction projects, costs state taxpayers about $250 million per year. The main effect of this extra cost is to boost the wages of construction workers, most of whom earn compensation well above the average for Michigan residents, according to the study. Michigan's prevailing wage law also appears to decrease the number of construction jobs in the state.

The study also found that because state guarantees on school district construction bonds trigger prevailing wage requirements, the prevailing wage law also applies to most public school construction. Exempting public school districts alone from the law's requirements would likely save state taxpayers about $125 million annually.

Read the report: The Effect of Michigan’s Prevailing Wage Law