(Source: MIRS.news, Published 06/21/23) The Senate Labor Committee took testimony Wednesday on legislation that unweaves a Snyder-era ban and would allow local governments to adopt ordinances setting higher minimum wage rates and better benefits than those existing statewide.
Sen. Sean McCann (D-Kalamazoo), the sponsor of SB 171, told the committee that the 8-year-old law, dubbed the “Death Star” by political opponents, has stifled local communities' ability to attract talented workers into the area.
The Kalamazoo Democrat introduced SB 170 as well, repealing another former Gov. Rick Snyder-era bill, that barred governmental units from disqualifying construction companies from a project bid based on them not having union representation.
Ranging from the state and counties to school districts and community colleges, the "Fair and Open Competition in Governmental Construction Act" restricted their use of project labor agreements (PLAs) for construction and demolition projects.
"Together, these bills are about restoring important measures in local control to allow our communities to have a more substantial say in how they conduct their business, with their taxpayers' money, and how they attract new workers to their area," McCann said, kicking off the nearly two-hour long hearing.
After similar legislation, HB 4237 and HB 4231, received testimony in the House Labor Committee on Jun. 15, today's discussion featured the business community's rising opposition and concern.
For one opposition letter specifically, which has nicknamed SB 171 and HB 4247 as the "MI Employment Uncertainty Act," association sign-ons have grown by at least five new groups in the last six days.
Amy Drumm, the senior vice president of government affairs for the Michigan Retailers Association (MRA), said she believes SB 171 could recreate an environment similar to the one generated by the COVID-19 pandemic regulations in 2020 and 2021. Simply, she said it would "open Pandora's box, allowing cities, townships and counties to adopt potential layers of regulation."
She clarified that "municipal boundary lines" are not always obvious to business owners, employees or customers, especially for a retailer with multiple locations in Michigan, or a small business with a mailing address that's different from the store's address.
A retailer might need to "navigate a complex web of local mandates" when determining the pay or benefits an employee working at several different locations should acquire, she said.
A small business owner could also be unaware of what regulation changes are being considered or what has been approved, Drumm said, adding that one of MRA's members asked earlier this year if any state-imposed pandemic restrictions were still in place.
"And yes, we did tell them they have been rescinded," she said. "Retailers want to comply, but many small business owners are overwhelmed by the vast amount of information and changes that they must follow…now imagine, for a small grocery chain with five stores, if local jurisdictions adopted rules that changed their company-wide policy monthly…"
Meanwhile, in support of SB 171, Travis Radina, Ann Arbor's mayor pro tempore, said while the state's minimum wage is $10.10 hourly, a single adult in his city must be earning $18.67 to meet the area's "living wage" threshold.
He said local elected officials need to be empowered to address their own local challenges, and that a one-size-fits-all mandate from the state government is not the solution.
"I'm not here today asking you to lift the state's minimum standards to meet Ann Arbor's needs, or to force other communities across Michigan to adjust to our higher cost of living," Radina said. "But I am asking you to stop artificially holding Ann Arbor and other communities back from solving our unique local challenges on our own."
While there are technically 21 states where cities and counties are barred from adopting higher minimum wage requirements, Michigan is one of 18 states where local communities have specifically been preempted from doing so, according to the Pew Research Center in 2021.
Jennifer Sherer – a senior state policy coordinator for the Economic Policy Institute (EPI), a Washington, D.C.-based think tank – described a relationship between preemption laws in Midwestern states with "anti-Black" policy choices, like redlining to restrict those in minority-majority and mostly low-income neighborhoods.
According to Sherer, the EPI's Economic Analysis and Research Network (EARN) Worker Power Project estimates that 38,702 retail and food service workers in Detroit alone could stand to benefit if the city issued its own mandates for wages, benefits and work scheduling.
"The vast majority, nearly 30,000 – or 77% – of those workers are Black, and women in particular stand to benefit from 'Fair Work Week' ordinances focused on retail and food service, where they are over half the workforce," she said.
Right after Sherer's remarks, Sen. Thomas Albert (R-Lowell), the committee's minority vice chair, said he found the strong insinuation that someone supporting the current statute does so based on racist ideals to be "really troubling" and "not helpful to the conversation."
SB 170 in particular, was opposed by the Michigan Minority Builders Association and the National Black Chamber of Commerce.
In its letter of opposition, the Michigan Minority Builders Association said that 85.5% of the state's construction workforce opts not to join a union, and that nearly all minority-owned contracting firms are not union-affiliated.
The letter stated that for taxpayer-funded school construction projects, government-mandated PLAs could escalate costs by 12% to 20%.
Shane Hernandez, president of the Associated Builders and Contractors (ABC) of Michigan, said non-union companies that would be required to sign a PLA in order to win a construction bid would "be required to pay double fringe benefit costs."
"These companies already pay employee health care and retirement costs for their employees, and under PLAs, you must also pay union pension and health care plans as required by the terms of the collective bargaining agreement," Hernandez said. "This removes safeguards that keep me from having to pay two health care plans or two benefit plans."
