Top priorities of Snyder and GOP lawmakers at odds

LANSING — A top priority of Republican Gov. Rick Snyder — as highlighted in his State of the State address Tuesday — is enhancing skilled trades training and bringing more Michigan workers into skilled and technical occupations to fill vacant jobs.

A top priority of the Republican-controlled Legislature is repealing the state's prevailing wage law, which requires union wage and benefit rates on state-funded or state-sponsored construction projects.

And with some experts pointing out that higher wages can be a key to luring people into skilled trades, Snyder said Wednesday that his top priority could be hurt if GOP lawmakers follow through on their top priority.

"That's one of the issues (why) I don't support making a change in prevailing wage," Snyder told reporters after touting his skilled trades initiative at a manufacturing plant in Lansing.

"The skilled trades ... so many of the fields require additional training, additional expertise, and many of those trades are doing that themselves, in terms of helping train people."

Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council, said Snyder is correct. His member unions spend about $25 million a year on training for apprentices and journeymen, he said. The training money is negotiated with contractors that hire union tradespeople, Devlin said.

"It will have a profound impact (on training) when wages are lowered," Devlin said.

Rep. Bradford Jacobsen, R-Oxford, is one of the sponsors of a three-bill package to repeal the prevailing wage law — the first legislation House Republicans introduced this term. He said he doesn't think the proposed change would have an adverse impact on Snyder's initiative, because repealing the prevailing wage law would primarily impact the construction trade and Snyder is mostly worried about a shortage of skilled labor in the manufacturing sector.

Senate Majority Leader Arlan Meekhof, R-West Olive, a sponsor of similar legislation in the Senate, believes repealing the prevailing wage law would save public money on projects such as school construction and "allow the market to work across all sectors of the industry."

Snyder has repeatedly said he doesn't support the legislation, but has not said if he will veto it if it lands on his desk.

On Wednesday, he visited Franchino Mold and Engineering in Lansing. The firm's human resources manager, Brad Rusthoven, said the firm's existing workforce is approaching retirement age and it is having difficulty recruiting skilled machinists and mold makers to manufacture custom plastic injection molds and dies.

Once they complete their apprenticeships, such workers would be paid about $20 an hour at the nonunion facility, Rusthoven said. Without skilled workers, "we can't be successful and we can't grow," he said.

Lou Glazer, president of Michigan Future, a nonpartisan think tank in Ann Arbor, said Economics 101 teaches that the solution to a shortage of workers with any particular skill set is higher wages paid to workers with those skills. The higher wages attract more workers and the labor shortage is resolved, he said.

Though short-term shortages are possible, in general, "I don't believe there are shortages in skilled trades, because wages are not going up," Glazer said.

If passage of prevailing wage has the effect of reducing wages, it will do the opposite of what Snyder is trying to achieve, he said.

A shortage of welders is an example frequently cited by Snyder. According to the U.S. Bureau of Labor Statistics, both the number of welders employed in Michigan and the amount they earned dropped between 2006 and 2013. For one class of welders, the average annual pay fell from $38,820 to $36,470 between those years. For the other class of welders, mostly employed in the auto industry, average pay fell from $44,180 to $37,600.

Glazer said the state does play a role in making sure workers have the basic math and other skills they need to be able to learn skilled trades, and can play a role in making sure advanced training is available in quantity. But those levers are weak compared to the wage lever, he said.

Devlin said skilled tradespeople in his member unions typically make about $40 an hour, though they don't always have year-round work close to where they live.

Enhancing skilled trades training is a state priority and will be funded accordingly in the upcoming budget while cuts are made elsewhere, Snyder said Wednesday.

"What we're dealing with is a huge national problem that got created several decades ago," Snyder said. "We made a mistake" and "just told everyone they should get a university degree."

Snyder said the state, in cooperation with high schools, community colleges and others, must take steps to show students that working in the skilled trades is honorable and well compensated, and to help them receive the required training.

He told reporters he would enhance funding in the Feb. 11 budget for the effort, despite the fact the state faces a projected general fund shortfall of about $325 million for the 2015 fiscal year and another $532 million for the 2016 fiscal year and Budget Director John Roberts has warned of service cuts.

"You don't do across-the-board cuts," but continue to invest strategically, said Snyder, adding that he expected funds to be allocated from both the general fund and the School Aid Fund, which is showing surpluses for both years.

The last two years, Franchino has received about $50,000 through a state program to help with apprenticeship programs, Rusthoven said.

Brent Knight, president of Lansing Community College, said the college is "working hard to establish pathways that lead to a sustainable career through on-the-job training and apprenticeship programs" and the college's apprenticeship programs have increased 29% overall since 2012 and by 48% in the manufacturing sector.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.