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Prevailing Wages Result in Economic Benefits that Outweigh Shortsighted ‘Taxpayer Savings’ Argument

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Rep. Chuck Moseley addresses his colleagues, saying the Common Construction Wage means “Hoosier taxes are staying right here in Indiana.”

The anti-prevailing wage sentiment cropping up in GOP-led legislatures nationwide posits to be a cost-saving sentiment. Governments, the wage-crushers suggest, should pay workers less to build their states’ largest works so they can ostensibly save money (though the savings have not been proven). In Indiana, however, the cost-savings associated with lowering construction workers’ wages (Indiana calls it the Common Construction Wage, not the prevailing wage) have been explained differently by those who oppose repeal:

Opponents argue the change would hurt many Indiana-based companies by opening the door for low-paying, out-of-state contractors to underbid on projects.

Pete Rimsans, executive director of the Indiana State Building and Construction Trades Council, which is opposing the bill, said repealing the law would transfer costs of apprenticeships, health care and pensions on to the taxpayers.

“So in the long haul it would be a taxpayer subsidy, as opposed to a taxpayer savings,” he said.

The argument is a strong one. The state is effectively taking money out of the pockets of workers, Rimsans says, in addition to saddling itself with a bigger benefit burden. The higher wages associated with the Common Construction Wage come with a gang of positives: the local economy is spurred by higher spending when workers are in better financial shape; a smaller number of residents require the GOP’s much-hated government assistance; and a greater number of employers and unions are able to fund all-important training. The building trades alone spent $42 million on training in 2014. That’s money the state would have to replace.

What the pro-repeal politicians in Indiana seem to be forgetting is that construction workers, contractors, and their families are taxpayers, too.


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