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Republicans, Business Groups Push Changes to Prevailing Wage Requirements

By Ali Carey, Contributing Writer

PA’s prevailing wage law has been on the books for 50 years and according to many Republicans and business groups it’s time for change.

In a tongue-in-cheek show of affection, House GOP members celebrated the law’s 50th birthday on Wednesday.

“Happy Birthday, Prevailing Wage. You haven’t changed a bit. For a half century you’ve lived a charmed and privileged life, removed from the economic realities of the average Pennsylvanian, and too self-absorbed to recognize how the world has changed around you,” said Rep. John Bear, R-Lancaster.

Some House Republicans, including Majority Leader Mike Turzai, R-Allegheny, Majority Whip Stan Saylor, R-York, and House GOP Caucus Chair Sandra Major, R-Susquehanna, joined contractors and interest groups to demonstrate their support for a group of bills that would change how workers on publicly funded construction projects get paid.

Republicans and business groups argue that union contracts artificially inflate those wages.  They say that modernizing the prevailing wage requirements would make Pennsylvania more competitive and improve the entire business climate.

Current prevailing wage rates are set by union collective bargaining agreements on a county-by-county basis.  Under the Prevailing Wage Act of 1961, anyone who works on a public project costing more than $25,000 must be paid a prevailing wage.

According to proponents of reforming and modernizing the 1961 Prevailing Wage Act, the bill package would “protect the taxpayer.”

On Wednesday, President of the Pennsylvania Building & Construction Trades Council Frank Siranni told reporters: “All the people who work those jobs are taxpayers, so they’re cutting taxpayer wages.”  He said the bill presents “a race to the bottom” with lower wages for workers.

While Republicans advocate modernizing what they call the state’s “archaic prevailing wage laws.” Democrats and unions are countering that the wages are appropriate and that reducing them would only hurt workers.  They warn that the package bills would financially benefit businesses at the expense of workers’ wages.

State Rep. John Galloway, D-Bucks, told the Daily Local News: “It’s an unnecessary assault on working men and women when we can’t afford it. We are supposed to be preserving and creating jobs in this state. (Republicans) are swinging the pendulum too far over to business.”

Labor groups argue that a prevailing wage better assures the quality of construction projects, and provides contractors an incentive against hiring cheaper labor from out of the area.

The House Labor and Industry Committee approved the four bills that would amend the prevailing wage law.  The bills that were passed in committee will increase the threshold required for prevailing wages to be paid, allow local governments and school districts to opt-out of prevailing wage, and change worker classifications.

3 Responses

  1. Mark-

    The information you are referring too is severely biased. The KRC is a group run by Union Officials, PSEA, and Union Supporters, your information cited above is not true, and simply twisted statistics.

    It would be like asking Madoff for his own figures in his court case.

  2. A rigorous body of economic research examining these natural experiments shows that their repeal leads to less workforce training; a younger, less educated and less experienced workforce; higher injury rates; lower wages; and lower health and pension coverage. Research also reveals that prevailing wage laws do not raise costs. For example:Comparing school construction costs before and after Michigan’s suspension of its prevailing wage law revealed no difference in costs. National analysis of data on school construction costs reveals that prevailing wage laws do not have a statistically significant impact on cost. Schools built at times of higher unemployment, when construction bids are much lower, however, can cost over 20% less per square foot than schools built during times of high demand. In Pennsylvania, when prevailing wage levels were lowered substantially in rural areas during the second half of the 1990s (a period of declining unemployment and rising prices), school construction costs went up more in areas where prevailing wage levels fell the most. For more http://goo.gl/e4b55

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