Republicans take labor battle to standards for wages on state projects
A bill that would end prescribed wages on public construction projects in Indiana awaits the signature of Gov. Mike Pence. And Henry Burks, a union electrician who lives near Indianapolis, is bracing.
Burks, 57, is putting off plans to build a patio at his house. He is delaying painting and landscaping, too. And he said he is worried about how to continue helping his grown children with college costs if his income drops, as he firmly expects.
"This is going to inhibit me from taking care of my family," Burks, who makes about $60,000 a year, said the other day as he took a break from installing conduit inside a corn processing plant in Lafayette. "Our wages will go down. The contractors we work for won’t get as many jobs. Maybe I’ll have to find work outside of Indiana."
Indiana’s Republican-held Legislature narrowly voted in April to repeal the state’s so-called common construction wage, a provision that had been around in various forms for 80 years and that sets pay standards for workers on publicly financed projects.
The debate over the change, which Pence has said he supports, was muted compared with two decades ago, when tens of thousands of union workers turned up at the state Capitol and held off repeal.
"It’s just a different era today," Brian C. Bosma, the House speaker, said in an interview. "There’s more concern about efficiency and taxpayer protection than there was 20 years ago."
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Bosma added that he believed the change would save at least 10 percent on government construction projects without gutting the wages of workers. "I couldn’t hear an adequate explanation from anyone as to why the public projects – funded by the public – shouldn’t have the same benefit of quality competition as the private sector enjoys," he said.
Efforts to end prevailing-wage laws are emerging in statehouses around the nation. Opponents say these efforts would lower wages and see them as a new front in a battle by increasingly Republican legislatures to weaken labor unions. Advocates, like Bosma, say the bills are aimed at sparing the budgets of struggling cities and states through free-market principles and ending an inconsistent, inflated and sometimes politicized system for calculating what wage should be the standard.
In West Virginia, where Republicans took control of the Legislature this year for the first time since the 1930s, lawmakers ended the prevailing wage for projects worth $500,000 or less.
In Nevada, where Republicans also newly dominate, lawmakers in March exempted school construction projects from that state’s requirement.
Proposals to repeal such laws entirely have been offered in more than a dozen states, including Michigan and Missouri, as well as Wisconsin, where one conservative lawmaker has called for a vote this week but Republicans appear divided on the matter.
In Illinois, Gov. Bruce Rauner, a Republican newly at the helm of a Legislature controlled by Democrats, has called for changes, arguing that from 2002 to 2011 the financially devastated state "overspent by $1.6 billion" on education projects alone because of the state’s prevailing-wage rule.
During the Great Depression, numerous states passed prevailing-wage laws in an effort to prevent companies from offering low bids to the detriment of ordinary workers. The laws, which exist in 32 states as well as on federal contracts, require private contractors to pay workers on public projects wages in line with those earned by people doing comparable work in the same region.
Efforts to repeal the laws have been around for decades, and groups like the American Legislative Exchange Council have included repeal as a model policy for years. But as Republicans have gained power in the states – they control 68 of 98 partisan state legislative chambers, the most in the party’s history – they have found new traction on the prevailing wage.
Although the issue is not explicitly about labor power, unions tend to favor the wage regulations, and opponents of the prevailing wage, which states determine differently, contend that it often amounts to higher, union scale wages.
So some view ending wage rules as a next goal for those who once were more focused on pressing for laws barring organized labor from requiring all workers to pay union fees or dues. With a flurry of those so-called right-to-work laws enacted recently in parts of the industrial Midwest – states like Indiana, Michigan and Wisconsin – the prevailing wage has taken center stage.
Since Indiana passed its law restricting union power in 2012, Republicans have gained numbers in the Legislature’s chambers and hold majorities so large that Democrats cannot block action by failing to show up. There, the repeal of the prevailing wage had been on the minds of people like Ed Roberts, a lobbyist for the Indiana Manufacturers Association, for decades.
When Republican lawmakers called for repeal in 1995, union workers objected in large numbers. Gov. Evan Bayh, a Democrat, negotiated a compromise that, in essence, scaled back and renamed the law but did not end it. "It was a war," Roberts said. Not long after, Republicans lost full control of the Legislature, and the issue faded some.
As it stands, construction projects worth more than $350,000 must have wages set by local boards. The result, opponents say, is wild variation in wage rates, union scale wages in union-heavy regions and a waste of tax dollars on propped-up projects that could be built for far less in the private sector.
"This wasn’t good for the taxpayers," said state Rep. Jerry Torr, a Republican, who offered the prevailing-wage repeal in Indiana this year.
Torr also led efforts to pass the 2012 law – an episode that he said most likely made passage of the prevailing-wage repeal possible now. "I think people found out that you could do something bold like that and survive an election," he said.
Ultimately, the bill ending the wage regulations passed with a narrow margin in each chamber. Some Republicans voted no, as did all Democrats, who said the change will lower wages, attract out-of-state workers, encourage less training and fewer apprenticeships, and ultimately save the taxpayers nothing.
"When you use the least-skilled, least-costly labor, what you wind up with is cost overruns, construction that doesn’t last as long and short-term costs that are not projected in the initial bid," said state Rep. Scott Pelath, the Democrats’ leader in the House. "What we see here is a willingness to look only at one side of the ledger and a trend of ignoring what creates real prosperity."
Burks, the union electrician, said he makes about $31 an hour, while nonunion electricians often make far less but also have far fewer years of training. Burks said he expected to lose about a quarter of his salary without a prevailing-wage rule – a notion that may well, he said, deter some of the younger electricians from staying in Indiana. "You can market yourself anywhere," he said.
Monica Davey, New York Times
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