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December 2021

The Front Line: Politics & Jobs
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Whitmer Reinstates Michigan's Prevailing Wage
Amid Nonunion Outcry

Thanks to a new order from Michigan Gov. Gretchen Whitmer, prevailing wage has been reinstated on certain state-funded construction projects, a move that largely undoes a Republican-led repeal of the wage standard in 2018.

"By reinstating prevailing wage, we are ensuring working people can earn a decent standard of living, saving taxpayers money and time on crucial infrastructure projects, and offering Michigan a highly-trained workforce to rely on as we build up our roads and bridges, replace lead pipes, install high-speed internet and more," Whitmer said in statement on Oct. 7. "As governor, I am proud to stand shoulder to shoulder with working people and unions who built the middle class."

The order reverses a Republican-driven effort from three years ago to remove the requirement that workers are paid a prevailing wage on state-funded construction projects. In 2018, the GOP-controlled Legislature voted to undo the fair wage standard in a little-used maneuver that didn't allow for a governor's veto. At the time, then-Governor Rick Snyder, also a Republican, supported prevailing wage.

"The action of Gov. Whitmer means a lot to our IBEW members," said Sixth District International Representative Joe Davis. "Prevailing wage for state projects is huge for our members because it levels the playing field for securing work through our signatory contractors."

Without prevailing wage laws, large government-funded projects can be a race to the bottom, with low bids from unqualified and low-wage nonunion contractors considered on equal footing with higher bids from reputable, established contractors who use local workers and pay fair wages and benefits.

The order only applies to projects that go through the state's Department of Management, Technology and Budget, which does not include certain projects like those bid out by local school districts. Still, it's a significant move in the right direction, Davis said.

"Schools and public buildings throughout the state will have projects that will pass through the DTMB. This means those projects will need to be bid by companies and contractors that submit their bids using prevailing wages, thus leveling the playing field for our contractors," Davis said. "As the state looks to modernize its infrastructure the DTMB will play a major role. The electrification of roads and rest areas is just the tip of the iceberg."

Numerous studies have shown the benefits of prevailing wage, as well as the negative consequences of removing it. A study in West Virginia found that a repeal of the state's prevailing wage law in 2016 led to lower wages, no cost savings and a 26% increase in on-the-job injuries. According to an Economic Policy Institute report, in states without prevailing wage, median wages are almost 22% lower than those with one.

"The removal of prevailing wage forces wages to circle the drain, yet the cost to the customer often remains the same or even increases at some point," Davis said, alluding to the fact that poorly done work by the lowest bidder often has to be redone, increasing the overall project cost.

Conversely, as the Center for American Progress noted, prevailing wages not only provide solid middle-class wages, they also expand health insurance coverage and increase the share of workers with pension plans. They also promote quality work and help to close racial pay gaps.

A study from the Illinois Economic Policy Institute found that prevailing wages also promote homeownership. According to the study, the policies extended homeownership to more than 61,000 blue-collar construction workers and boosted the value of those homes by more than $42 billion.

"The actions that have been taken … restore confidence by workers and employers alike," said Michigan Building and Construction Trades Council President Steve Claywell, who is also a member of Battle Creek Local 445. "The restoring of prevailing wage provides a fair and equal bidding process allowing for highly trained men and women to be paid a good wage. We appreciate the courage of this governor and stand ready to build Michigan with her."

Michigan's Associated Builders and Contractors, an anti-prevailing wage organization that was behind the 2018 repeal, has already pledged to fight Whitmer's order in court.

"The ABC and other groups suing in the courts is to be expected," Davis said. "The hill that they and others have to climb is how does this harm their contractors? Paying the prevailing wage to your employees does not harm a healthy and responsible contractor, union or nonunion. It only affects employers that survive by underpaying those that work for them every day and actually do the work."

While Whitmer's order is undoubtedly a positive move, Davis warned that the fight is not over.

"It's a good start but there are a lot of groups that will fight this effort and attempt to tie it up in the courts for years. The best way to fully and more permanently institute prevailing wage is to make the order a law," Davis said. "And the only way to make this a law is to vote for candidates that support workers and unions."


Michigan Gov. Gretchen Whitmer, center, issued an order on Oct. 7 reinstating prevailing wage on certain projects.

Union Support is Up and Women are Major Beneficiaries

New studies show that support for unions continues to rise and that the benefits are particularly strong for women.

Gallup's most recent poll on labor unions found that 68% of Americans approve of them, the highest that figure has been since 1965. Last year, the overall number was 65%. The polling organization has measured the public's rating of labor unions periodically starting in 1936 and then annually since 2001, with more Americans expressing approval than disapproval in every reading.

"It comes as no surprise that public support for unions continues to rise across the country," wrote AFL-CIO President Liz Shuler on Twitter. "Union members have delivered for our communities throughout the country, as workers have finally been recognized as essential to our economy and society during the coronavirus pandemic."

Shuler, who is also a member of Portland, Ore., Local 125, continued, "This polling data should send a clear message to Congress that union jobs are vital as we re-emerge from this pandemic with a stronger economy that is built upon the principles of fairness and equality."

According to the poll, which was conducted in August, approval has increased among nearly all major demographic subgroups since 2016 and has been trending upward in recent years. Support among Democrats, which registered at 90%, has risen over the past year as President Joe Biden has built on his pledge to lead the most pro-union administration in history.

Gallup also noted that union members tend to have higher incomes than their nonunion counterparts, a finding in line with numerous other studies. Breaking it down further, the Institute for Women's Policy Research recently found that unionized women earn higher wages than their nonunion counterparts, on average about $195 more per week. This tracks with another finding that unions are associated with a narrower gender wage gap. According to IWPR, women covered by a union contract earn 87.3 cents for every dollar paid to union men, compared to nonunionized women who earn 82 cents for every dollar paid to nonunionized men.

While women's union membership varies by state, IWPR found that unionized women in all of them outearn their nonunion counterparts, calling it "an essential wage advantage that would increase women's economic security following the pandemic-induced 'she-cession,'" a nod to the fact that the pandemic and its accompanying recession has hit women workers particularly hard. It can also be the difference between making rent and not. In 43 states, the study found, at least half of the yearly average rent costs could be paid with the yearly union wage advantage, and in 12 states that advantage pays for a full year or more of average rent.

"The role of unions and collective bargaining are especially critical to securing women's prosperity now, as the United States seeks to recover from the pandemic and its resulting 'she-cession,'" the study authors wrote. "COVID-19 has made clear: Workers in unions fare better in economic crises."

IWPR also found that women experience the largest union wage advantage in male-dominated occupations. The advantage is largest in natural resources, construction and maintenance jobs, with unionized women earning more than 1.5 times as much as nonunionized women in those sectors.

Backing up other studies, IWPR also found that wages are lower for workers in right-to-work states, regardless of gender or union membership. Additionally, women covered by a union contract are more likely to have access to benefits like paid sick leave, health care and retirement plans, all crucial benefits at any time, but especially so for surviving the pandemic recession. Regarding pensions, the percentage of union women who participate in such a plan is almost twice as large as that of women who are not unionized.

More over, because hiring, pay and promotions are more transparent in unionized workplaces, gender and racial bias is minimized. Women, and especially women of color, who are either affiliated with a union or whose job is covered by a union contract, earn higher wages and are much more likely to have employer-​provided benefits than nonunion women.

Based on the report's findings, IWPR's policy recommendations include increased support of collective bargaining and other worker protections, and investments in jobs and infrastructure done with an eye toward gender and racial equity goals. And since the union wage advantage is particularly high in fields like construction and manufacturing, more should be done to recruit and retain women, who currently account for a small percentage of workers in these areas. The authors also state that unions should make a concerted effort to promote more women into leadership roles.

"What these new numbers show is what we've known all along, that most people support unions because they level the playing field," said International President Lonnie R. Stephenson. "This is also why we started our IBEW Strong initiative, to be intentional about recruiting and retaining more women and people from historically marginalized groups. By doing so, we not only help those new members, but we make the IBEW stronger. Now we have even more data on our side."


New data point toward increased support of unions and how the benefits of membership are particularly meaningful for women.

How Unions Close the Racial Wealth Gap

A new study by the Center for American Progress shows how unions increase wealth for everyone in a union household, but especially for Black and Hispanic families.

"All told, unions have a significant impact on the financial stability of workers," the authors wrote. "This new analysis provides additional evidence that policymakers must take steps to strengthen unions in order to narrow the racial wealth gap and increase the economic power of the working class."

The United States is home to profound income and wealth inequality, with wealth skewing even farther apart, CAP reports. The top 5% of families hold about 250 times as much wealth as the median family. Also, according to the study's findings, the median white family has about 10 times the wealth of the median Black family and more than eight times the wealth of the median Hispanic family.

Unions play a key role in redressing these wealth gaps by raising incomes, increasing benefits, and improving the quality and stability of jobs, all components of accruing wealth. And while they do this for all households regardless of race or ethnicity, unions tend to provide larger increases for Black and Hispanic households than for white ones, thereby closing the gap while still helping all union families. This is, in part, because Black and Hispanic families often have more ground to make up to reach financial parity with their white peers.

While CAP's findings are in line with other studies showing how the decline in unions is associated with rising income inequality, for this analysis the report looked at wealth as opposed to income. CAP defines wealth as the sum of all marketable assets — such as checking accounts, real estate, stakes in firms and vehicles — less all debt, including mortgages, credit card debt and student loans.

Building on a 2018 report, CAP's new analysis released in September found that, for all those covered by a collective bargaining agreement, the median union household has more than twice the wealth of the median nonunion household. The benefits become even more significant for union households of color. Black households with a union member have median wealth that is more than three times that of nonunion Black households. For Hispanic union households, the median wealth is more than five times the median wealth of their nonunion counterparts. White households with a union member have nearly two times the median wealth of nonunion white households.

CAP also noted that unions' ability to increase household wealth may explain why they help boost economic mobility for future generations. According to previous research by the think tank, children growing up in union households tend to have better outcomes than those who grew up in nonunion households, especially when the parents are blue-collar workers. For example, children of non-college-educated fathers earn 28% more if their father was in a labor union.

Additionally, benefits like pension plans help to grow wealth, while others such as health and life insurance reduce the amount union members need to spend from their own savings during periods of illness or income loss. The analysis also noted how those making a union wage tend to have more savings, which can then be spent on a house or a child's college tuition, not to mention the tax incentives that come with saving. It also helps cushion families' savings against downturns like the recent COVID-19-induced recession, which hit Black and Hispanic families disproportionately hard.

The study noted that strong union contracts create more stable jobs, with protections such as dispute resolution that give workers the ability to stay with the same employer for a longer period of time, a form of stability that itself can lead to greater wealth generation by allowing for increased access to benefits, including those not always offered to new hires.

CAP concluded its paper with a call to strengthen unions by supporting legislation like the Protecting the Right to Organize Act, which calls for some of the biggest labor reforms to level the playing field between employees and employers since 1947. The bill passed the House of Representatives in March and has the support of President Joe Biden, but has stalled in the Senate.

"Structural racism remains an obstacle in this country and it's good to see that unions are a proven way to alleviate some of that inequality, while also providing for a brighter future and a voice on the job — universal rights that every working person deserves," said International President Lonnie R. Stephenson. "This is one more reason to do all we can to get the PRO Act on President Biden's desk."


New research finds that unions help close the gaping racial wealth gap and may contribute to financial security for generations to come.