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Feb
2016
1

Cost of Indiana Public Projects HAS GONE UP Since They Repealed Prevailing Wage Protections

Guess this guy was right.

Guess this guy was right.


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Before the Indiana State Budget Committee, the State Building and Construction Trades Council (BCTC) testified that, as many economic experts predicted, the cost of public works projects has increased considerably since the July 1, 2015 repeal of the state’s Common Construction Wage (CCW).  Much of the increase was caused by the absence of safeguards that once protected the state from fraud and abuse in the market.

Economically, a reduction in the number of contractors bidding on projects has caused an increase in the price to customers, in this case the taxpayers of Indiana.  This is known as an ‘inward shift’ in the supply chain.

Below is raw video of the Budget Meeting.

Part of the reason the price has gone up post-CCW repeal is that reputable contractors have become less likely to bid on projects when they feel they will be undercut by contractors willing to pay poor wages or commit payroll fraud (such as misclassifying employees as independent contractors to avoid paying payroll taxes, workers compensation, and unemployment insurance).  CCW repeal has also left workers more vulnerable to unsafe conditions, such as ignored health and safety regulations.  

As part of their effort to help the state’s workers following CCW repeal, the BCTC has been part of a vocal group of labor and workers’ rights activists pushing for responsible bidder ordinances on the local level. These types of laws help guard against fly-by-night contractors who bring in out-of-state workers without any commitment to the local community:

The responsible bidding ordinance would help lessen the potential damage to union members, local contractors, and the local economy by giving definition to the term responsible bidder.

Under the ordinance, any contractor proposing to submit a bid on any public project with a total construction cost of at least $150,000 would have to provide evidence of participation in registered apprenticeship and training programs, a written plan for employee drug testing, a statement of staffing capabilities, proof of professional or trade licenses as required by law and a statement that all their workers on the job are either their employees or subcontractors, among other rules.

Responsible bidder ordinances are not without precedent in Indiana. Newton County has had such an ordinance in place since 2007 and the city of Crown Point passed one the following year.

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