Bills dilute prevailing wage law for publicly funded jobs
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HARRISBURG -- Republican legislators scored significant victories Monday in bids to water down one of their most-criticized targets, the state's 50-year-old "prevailing wage" law.
The 1961 statute requires that prevailing wages, often called "union wages," be paid by townships, boroughs and school districts on almost all of their publicly funded office building and road projects -- those costing more than $25,000.
"The prevailing wage changes would be a tremendous savings to the taxpayers -- hundreds of millions of dollars," said Rep. Ron Marsico, R-Dauphin, who authored two of the six bills approved Monday by the House Labor and Industry Committee. "Prevailing wages are [construction] union wages, not the market wage" in most counties.
The prevailing wage law is supported by Democrats, liberals and construction unions, who contend it ensures that trained workers are hired to build schools, office buildings and other projects and that they are fairly compensated for quality, on-time work.
The bills now go to the Republican-controlled House, where approval is expected. Since the Senate and governor's office are also Republican-controlled, their passage this fall has a good chance.
"Workers will be paid less, and [construction company] profits will go up," said Rep. William Keller, D-Philadephia, a union ally who tried but failed to modify the bills. "What we don't need in this economy is lower wages. Republicans are moving bills that help corporations keep more of their profits at the expense of higher-trained Pennsylvania workers and the public."
Frank Sirianni, head of the state Building and Construction Trades Council, said he wasn't surprised by the GOP-run committee's action but wasn't pleased. The bills were approved on party-line votes, Republicans in favor and Democrats opposed.
"You get what you pay for," he said about wages. "I thank the Democrats who voted for working people. These bills are a vindictive attack on working men and women in the construction trades."
A liberal-leaning group, the Keystone Research Center, said repeal of prevailing wage laws "leads to less workforce training, a younger, less educated and less experienced workforce, higher injury rates, lower wages and lower health and pension coverage."
But GOP critics say the prevailing wage requirement hurts Pennsylvania's business climate by needlessly driving up the cost of projects and thus the burden on taxpayers.
One measure, House Bill 1329, was aimed at watering down the wage law by significantly raising the threshold -- to $185,000, from the current $25,000 -- on the cost of a project that would be subject to prevailing wages.
The higher threshold bill, which also would be adjusted upward yearly with inflation, was sponsored by Rep. Fred Keller, R-Union. He said the $25,000 threshold was set in 1961 and projects have significantly increased in cost since then.
A related measure, by Rep. Scott Perry, R-York, says a project would have to be at least 51 percent publicly funded before prevailing wages would apply. Now, he said, a project with as little as 1 percent public funding is covered by prevailing wages.
Critics said they don't like how prevailing wages are calculated -- on a statewide basis, and union wages paid in big cities like Pittsburgh and Philadelphia cause construction wages, plus benefits, to reach the $30- to $50-an-hour range.
Some want to change to a county-by-county basis, making wages lower -- in the $15- to $25-an-hour range -- because smaller counties in the central and northern parts of the state don't pay such steep wages and benefits.
A bill by Rep. Warren Kampf, R-Chester, was approved to give school districts a local option about whether to make a project subject to prevailing wages. Several school districts have complained to legislators that the high wages required on their school buildings drive up the cost and raise school taxes.
But Rep. Bill DeWeese, D-Greene, objected, saying, "I want people who are trained by the electrical workers union, and expert masons and roofers and carpenters working on schools. Big construction companies will bring in people from south of the Rio Grande to put up walls and electrical systems," which will cause "an unhappy result."
Critics said that, without prevailing wages, companies will hire "illegal aliens" because they won't complain about lower wages.
A companion bill by Rep. Ron Marsico, R-Dauphin, would make prevailing wage an option for construction projects undertaken by townships and other municipalities.
The GOP bills are House Bills 1271, 1685, 1329, 1541, 709 and 1191. They can be found at www.legis.state.pa.us.
The hearing Monday was the first of a two-part Republican move to address the prevailing wage law this week. On Wednesday, House Majority Leader Mike Turzai, R-Bradford Woods, and other House leaders will have a news conference to, as they put it in a statement, "mark problems with the job-crushing prevailing wage law in Pennsylvania."
First Published October 4, 2011 12:00 am