When the Nippon Corporation announced they were planning to build a $71 million biomass cogeneration plant at the paper mill on Port Angeles, WA, local workers thought the days of double digit unemployment might draw to a close. The project received $2 million in federal funding and $20 million in tax credits meaning the prevailing wage mandated under Davis-Bacon laws would be in effect. But when the contract went to Factory Sales and Engineering (FSE) of Covington, Louisiana, the contractor brought in out-of-state workers and spurned the wage regulations, according to an important new piece from People’s World:

Lee Whetham, president of the Olympic Peninsula Building and Construction Trades Council, AFL-CIO, said he asked Barry “Hutch” Hutchins, FSE project manager, if FSE intends to honor Davis-Bacon “No, we have no intention of paying the prevailing wage for any of the trades,” Hutchins told Whetham. “He told me that directly to my face,” Whetham said. “He said they are going to ‘self-perform’ and not pay the prevailing wage.”

Observers like Sam Woods of the International Brotherhood of Electrical Workers (IBEW) Local 46 note that their $14.50/hour wage is just one third of the prevailing wage. Out-of-state workers prevent the project from achieving its full effect due to lost local tax revenue.

“I have been on a fact-finding mission ever since to make a final determination as to whether the workers are being paid the prevailing wage,” Whetham said. “Both the federal and state prevailing laws apply but since the state’s prevailing wage is higher than the federal, the state has to take the lead on enforcement.

“Everyone knows that wages in the south are cheaper. Contractors from the south move their crews onto a job site here; they pay their workers lower wages; they finish up a job and move on. It does nothing to help the local economy here. The federal government recognizes that this is a depressed area and yet they allow the jobs to go to out-of-state contractors.”

Some of the fault may lie with the process in which funds were disbursed by the government. Instead of the government giving money directly to the Nippon Corporation, it was sent via a middle man in the Washington State Department of Commerce who approved the grant and loan. This created a legal money laundering situation in which the government, Nippon, and FSE are not subject to Davis-Bacon standards, according to PW.

Read the entire piece HERE.