Don't Drink the Tea. Think With the WE.
Mar
2012
29

Two Bills Take Aim at Pennsylvania Prevailing Wage. Construction Trades Fight Back.



Last week, union protesters showed up en masse to rally around the offices of Rep. Warren Kampf, whose Pennsylvania House Bill 709 would allow school districts in Pennsylvania to make the decision about whether or not to pay prevailing wages on construction projects. According to Pattye Benson of Community Matters, who “accidentally” participated:

Around 3PM on Wednesday, as I left Acme there was a large organized group of men in the parking lot changing into identical white t-shirts, many with signs and American flags. As I got closer, I could see several pick-up trucks with signage with anti-Warren Kampf messages – ‘Working Families Against Kampf’, ‘Kampf Works Against Workers’, etc. Clueless as to whom these people were and what they were doing, I asked and was told that they were members of Pennsylvania’s Carpenter’s Union and they were ‘taking their message’ to State Rep Warren Kampf’s office in Paoli…

… By the time the large group of 85-100 arrived at the door to Warren Kampf’s office, Lancaster Avenue and Darby Road was filled with honking motorists showing their support. Slowly circling the Paoli streets, each of the accompanying pick-up trucks had amplifiers loudly broadcasting pro-union, anti-Kampf commentary.

Workers see the law as an unnecessary burden on working families in Pennsylvania while proponents frame the measure as a cost-cutting device that will provide help to small school districts. The question is, at what expense does this come to the taxpayer/worker that helps fund the school district?

HB709 was written last year but was debated this week by the legislature. Kampf, who sponsored the bill, explained its alleged necessity in a newsletter last summer:

“Forcing them [school districts] to pay an inflated rate for public contracts is both fiscally unwise and burdensome to taxpayers, particularly to those on fixed incomes who face annual increases in property taxes. Prevailing wage rules require public agencies to pay contractors a wage set by bureaucrats, which usually equals the local union rate. In some cases, that inflates wages well above what that contractor’s work is worth in a particular location.

My bill would exempt school districts as a public entity required by state law to pay prevailing wages. It allows individual school districts to vote to pay their contractors a prevailing wage if they wish to. Requiring our public agencies to pay higher wages makes no sense, especially at a time of financial hardship. School districts are struggling to balance their budgets. Forcing them to pay wages to contractors well above what the private sector pays places an excessive burden on schools and taxpayers. This must change.”

Paoli is not the only community dealing with prevailing wage attacks. Township supervisors in East Lampeter have joined together in support of the package of bills that would partially dismantle wage standards. Specifically, they’ve endorsed House Bill 1329 which would raise the minimum threshold for projects to require prevailing wages from $25,000 to $185,000. According to PennLive.com,

Supervisors adopted a resolution from the Pennsylvania Association of Township Supervisors March 20 supporting legislation to amend the law which provides for high wages for workers on publicly funded construction projects with a cost of more than $25000.The resolution states that “the cost and burden of these artificially inflated wages are born by taxpayers in the form of higher construction costs and higher taxes.” House Bill 1329 would increase the prevailing wage threshold from $25000 to $185000 and House Bill 1685 would require the state to establish clear and uniform worker classifications for public projects. If the bills pass it would be the first time threshold changes would be made to the Prevailing Wage Act in 50 years PSAT’s website says.

Additionally, supervisors in Newlin Township have signaled support for HB 1329, hoping to save costs by underpaying for lower quality construction work.

If the scene outside Rep. Warren Kampf’s office last week is any indicator, union members in Pennsylvania will fight these proposed changes at every turn. The Pennsylvania Building Trades, whose membership would be as gravely affected by prevailing wage deform/reform as anyone, refute claims of savings on their website:

The Prevailing Wage Law is simply a minimum wage law applicable to taxpayer financed public construction projects that assures that local businesses that pay local market based wages and benefits to their skilled construction workers will not be victims of out of state contractors or unscrupulous local businesses that refuse to play by the rules but still think they have a right to get money from Pennsylvania taxpayers.

Typically, the primary argument against the current Prevailing Wage Act is that it drives up the cost of construction. That is simply not true; many have announced that eliminating local, market based, prevailing wages will reduce the total cost of a construction project by anywhere from 10% to 30%. So let’s start there. Construction Labor costs, according to Construction Industry experts, are generally 19% to 24% of the total cost of a construction project. Looking at actual numbers can show how preposterous the claims of 30% savings can be.

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