Michigan Expands Prevailing Wage to Boost Clean Energy and Worker Protection

Michigan Governor Gretchen Whitmer has signed a significant expansion of the state’s prevailing wage law, marking a pivotal step towards bolstering both worker protections and the clean energy sector. The legislation extends prevailing wage requirements to construction projects for solar and wind energy, ensuring that workers on these vital initiatives receive fair compensation and benefits.

Prevailing wage laws mandate that workers on state-backed construction projects earn wages and benefits comparable to or exceeding the standard rates in their region, often aligning with union standards. Senate Bill 571, championed by State Senator John Cherry, D-Flint, broadens the scope of Michigan’s prevailing wage law to encompass the construction of clean energy facilities, including solar, wind, and energy storage plants.

This expansion not only guarantees fair wages for workers in the burgeoning clean energy industry but also imposes stringent accountability measures on contractors. The new law requires contractors bidding on clean energy projects to register with the Department of Labor and Economic Opportunity and diligently maintain and submit payroll and benefit information for their employees to the relevant contracting agency.

Advocates of the legislation are jubilant, asserting that it will significantly enhance worker well-being while propelling Michigan's transition to a clean energy future. The state has already set an ambitious goal of achieving 100% carbon-free energy by 2040, and the expansion of prevailing wage to the clean energy sector is a crucial step in realizing this vision.

“This legislation isn’t just about fair compensation, it’s about safeguarding the skills and safety of our workforce,” Senator Cherry emphasized. “This law will be instrumental in supporting our state’s transition to clean energy and it’ll ultimately save us more money in the long run."  

While the bill garnered bipartisan support, it ultimately passed along party lines, with Republican lawmakers expressing opposition. Critics argue that prevailing wage increases project costs and disproportionately burdens non-union laborers. Michael LaFaive, a prominent figure at the Mackinac Center for Public Policy, a free-market think tank, contends that the expanded law goes beyond traditional prevailing wage mandates by effectively imposing a higher minimum wage on a specific industry for projects that are not directly funded by the state.

It's worth noting that Michigan has a history with prevailing wage laws. The state previously implemented prevailing wage for state-funded construction projects, a policy that remained in place for decades until its repeal by Republican legislators in 2018. Governor Whitmer's reinstatement of the law in 2023, followed by this recent expansion, underscores the state's commitment to protecting workers and fostering a robust construction industry.

As Michigan strides forward in its clean energy journey, it's essential to consider the broader implications of prevailing wage laws. Could similar policies be beneficial for other sectors of the construction industry? How might these laws impact small businesses and contractors? And what role do prevailing wage laws play in attracting skilled workers to the state? These are complex questions that demand careful consideration as policymakers navigate the evolving landscape of the construction industry.