A perfect example of the need for responsible contracting measures can be found in Kent, Ohio where an out-of-state contractor from Alabama provided the low bid, came to town, and employed 23 undocumented immigrants in order to pay them substandard wages. The foreman of the crew responsible for building the 596-unit student housing complex was then arrested for making crystal meth in his hotel room.
Kent City Councilman Robin Turner was rightfully outraged, according to ACT Ohio:
“These are structures that are going to be student housing. Where’s the due diligence?”
This story emphasizes the need for local governments to mandate that quality, properly vetter contractors are used. Local hiring can often eradicate these kinds of ills because local relationships provide built-in oversight. Moreover, if local workers are employed the community benefits when their earnings are funneled back into the community.
The undocumented status of many of the workers on this project means they will not be paid properly and therefore the city will not capture the tax revenue their labor should generate. According to the Akron Beacon–Journal, a fire department call to an Econo Lodge began the investigation into the job’s foreman:
Police say they found Anthony Henry, 37, of Arab, Ala., making methamphetamine. They evacuated the hotel and arrested Henry.
During their investigation, police learned Henry was leading a crew of 25 construction workers in Kent, 23 of whom were from Mexico and Central America and without the proper paperwork to work in the United States. Henry was jailed and his crew was detained.
Politicians are starting to realize that allowing workers to be grossly underpaid only hurts them when it comes time to collect taxes:
The prevailing wage standard is only applied if federal or state money is involved. Because The Province is a private project, companies are required only to pay minimum wage.
Orr calculated the possibilities. Prevailing wage of $26 an hour for 23 carpenters would generate $30,000 in income tax for Kent in one year. By comparison, Ohio’s minimum wage is $7.70.
Turner said he doesn’t need a calculator to understand what the city stands to lose when laborers are paid below prevailing wage.
“It’s a hit to the city pocket book,” the councilman said.
Ohio unions are working hard to keep city councils informed about the dangers of hiring unqualified workers. Their work has led one Ohio town to adopt new language in their contracts in order to prevent a fate similar to Kent’s. From the Akron Beacon-Journal piece:
A coalition started by unions made progress this week when Barberton City Council became the first to introduce an ordinance giving the city the right to skip over the best bidder on a public project if that bidder doesn’t meet certain standards. There are two more required readings before the matter goes to a vote.
“Here we’ve been putting together a coalition of contractors, municipal leaders, owners and others … and writing helpful language, and along comes this textbook case,” said Bill Orr of Laborers’ International Union of North America Local 894.