Senate passes expansion of prevailing wage law to wind and solar projects

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Michigan Senate Democrats pushed through an expansion of the state’s prevailing wage law Wednesday that would apply to renewable energy projects.

Senate Bill 571, introduced by state Sen. John Cherry (D-Flint), would require solar, wind, and energy storage projects of two megawatts or more to pay a prevailing wage, which mandates union-level compensation. It would also require registration of contractors and subcontractors working on state prevailing wage projects and require contractors on those projects to submit certified payroll to the state.

Sen. Thomas Albert (R-Lowell) speaks on the Senate floor on Jan. 10, 2024. (Photo: Anna Liz Nichols)

It passed on a party-line 20-18 vote, but not before a pair of amendments sponsored by Sen. Thomas Albert (R-Lowell) were voted down along the same party-line votes. Albert said his amendments sought to prevent prevailing wages expanding from state-financed public sector projects to privately-funded solar and wind projects.

“That would artificially raise costs of wind and solar projects in Michigan, and those costs would be passed along to families and businesses through their higher utility bills,” he said. “It also sets a dangerous precedent. Today it’s wind and solar projects. What private industry will Democrats target for artificial costs next? It’s a bridge too far.”

Cherry responded to that characterization, saying that mandating prevailing wage would actually cost less money in the long run.

“I’d like to harken back [to] when we included prevailing wage in our laws that we passed in the fall for our clean energy projects,” said Cherry. “Part of the reasoning behind that is because we understand that when we do work using trained well-paid workers, it’s cheaper than doing the same work twice with untrained poorly paid workers.”

Albert and his fellow Republicans remained unconvinced and said a line had been crossed with dire consequences as a result.

“Really, what this gets down to is two different thoughts on how our economy should run and what the Democrats are proposing here is replacing the invisible hand with the iron fist,” said Albert. “How is this going to work? Well, history can show us how this manifests and how this plays out. The Bolsheviks and other good sounding socialists had great rhetoric. They promised utopia, they promised complete equality. How did things work out? Well for the socialists, their economy doesn’t work, so it ends in government compulsion, and that ends with a completely inefficient society, And it ends in tyranny and it ends in abject poverty.”

Sen. Jeff Irwin (D-Ann Arbor) pushed back against the idea that the prevailing wage inclusion in renewable energy products was artificial.

“I just want to remind my colleagues that the pay to the people who do the work is not artificial,” he said. “There’s nothing artificial about how those paychecks end up paying their mortgage. There’s nothing artificial about how those paychecks end up putting food on the table for them and their families. And there’s also nothing artificial about how when you get quality work done by well trained and well organized people that you get better projects and that these projects last longer. They serve the people better. And after all, that’s why we’re here, to serve the people. So when we pay a fair wage for a good job, I don’t see anything artificial about that. I see that as delivering on the bottom line to our taxpayers.”

The bill would create a state project registry for contractors and subcontractors that they would be required to apply for each year if they wanted to bid  on a project or renew a registration. They would also have to pay a fee, which Cherry estimated would be between $300 and $500.

“I actually think one year is easier on businesses,” he told reporters. “Multiple states at prevailing wage do contract or contractor registration, and that funds the enforcement. So if you’re funding the enforcement through the registration fees, if you do it on a 10-year basis, it’s just going to be a really big fee.”

The bill now moves on the House, which on Tuesday regained its 56-54 Democratic advantage with the swearing in of two legislators to fill vacant seats.

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