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  • Pennsylvania Considers Changes to Profligate Prevailing Wage Laws

    State governments across the nation are looking for ways to tighten their belts in the face of declining tax revenues and growing budget shortfalls. In Pennsylvania, legislators have offered a measure that would, they claim, dramatically reduce the state’s construction costs on public works projects by bringing contractors’ wages in line with the prevailing market rates.

    On Thursday, the Pennsylvania Assembly’s Labor and Industry Committee debated a measure offered by Rep. Ron Miller (R) that would bring the prevailing wage – or the wage contractors must pay workers when working on a contract worth more than $25,000 – in line with market value.

    Under current law, the prevailing wage is determined by the average union pay for a given job. Miller’s legislation would make it the average pay among all workers, unionized and non-unionized. The bill is estimated to save the state “between 30 and 75 percent on labor costs,” according to the Pennsylvania Independent.

    For example, an electrician in Cambria County working on prevailing wage would receive $50.24 hourly in wages and benefits, 78 percent higher than the average occupational wage of $28.11 for electricians in the same county. In Montgomery County, a plumber working on prevailing wage will make $65.94 in wages and benefits per hour, 56 percent higher than the average occupational wage of $42.29.

    The gap between these types of wages varies depending on the county and the trade, but the prevailing wage is 50 percent higher on average statewide in the 10 most common construction trades, according to data from Pennsylvania State Association of Boroughs, which represents local governments in the state.

    Since union shops take on about 30 percent of state construction projects, advocates of the wage change say a minority of all building projects are setting high wage standards for all public projects.

    At Wednesday’s hearing, Rep. Miller asked, “Why are the taxpayers subsidizing a small subset of workers within the state who are lucky enough to work on a prevailing wage job?” Miller said that the bill would ensure a better deal for taxpayers.

    Rep. Bill Keller (D) responded that current prevailing wage laws in Pennsylvania “protect the taxpayers…by making sure that public works projects are done with the highest skill available.”

    Market rates would represent a significant disadvantage for unionized contractors. If the state government were no longer required to pay whatever rate union firms pay, non-unionized contractors could secure more state contracts by offering a better bargain.

    That could have something to do with Keller’s outspoken opposition: the $201,400 he received in contributions from organized labor in the 2010 election cycle accounted for 83 percent of his entire campaign haul. Thirteen of his top 20 contributors were labor unions.

    Not only would the bill save taxpayer money, it would likely also boost employment in the state. A lower cost for each public works project means more public works projects, which means more people put to work.

    As a general rule, high prevailing wages also discourage contractors from hiring young or inexperienced workers, since those workers are most likely to be the least productive, and hence the least likely to be worth the inflated wage their employers are then forced to pay. That generally leads to fewer hires among new job market entrants.

    Another bill currently making its way through the Pennsylvania legislature would reduce the number of state government contracts subject to the prevailing wage by increasing the law’s contract value threshold. All contracts worth $25,000 or more are currently subject to the prevailing wage. A bill offered by Rep. Fred Keller (R) would raise that threshold to $185,000 to account for increases in the consumer price index from 1963, when the $25,000 threshold was created.

    “This legislation also establishes an automatic cost-of-living adjustment to ensure that the threshold is adjusted each year,” Keller said in a statement. The bill would increase the contract value threshold annually according to increases in the CPI.

    “I firmly believe that adjusting the threshold for inflation makes common sense and will help to relieve our municipalities and school districts from Prevailing Wage Act mandates for work on relatively small projects,” Keller added.

    Posted in Scribe [slideshow_deploy]

    13 Responses to Pennsylvania Considers Changes to Profligate Prevailing Wage Laws

    1. Bill says:

      I love this idea! It is about time this prevailing wage scam be addressed. Save money on the projects hourly labor and the job will be completed faster. I know several people that like to stand around at $50.24 an hour. It is about time the unions had to work for the wage.

      • Guest says:

        I don't have a problem with it either. The wages for workers would be equal.

      • dean mcwilliams says:

        i dont know what you do for a living ,bill,but here in the pittsburgh building trades we dont stand around at our wage,if you dont work ,youre laid off.also,jobs are done more efficiently and faster with union workers than non union workers because of the training that our people go through.its been proven.

        • Haleiwa Dad says:

          if the work really is done faster and more efficiently it would be cheaper to perform, the union contractor would win the bid on price and, hey, no worries, mate.
          unless the 'prevailing wage' is really an inflated wage imposed by political influence and unrelated to the actual efficiency of the force which, uh…. it does seem to be
          otherwise why worry about the inefficient and unskilled non-union guys winning the jobs?

    2. @tracetime says:

      Reps always want to reduce government interference, especially when it protects the workers, but here is a case where government should stay out of our business! If 30% of jobs go to union workers, that leaves 70% for non-union, right? We don't need the state to level the playing field… or

    3. Bobbie says:

      how can union workers be trusted?

      This whole division of America seems to be between American principled and unprincipled?

    4. vam0408 says:

      When Unions stop making heavy contributions to their political favs, then a more fair and balanced approach to jobs will be achieved. There is a real misconception that the prevailing wage rate will result in more highly skilled workers on the project, that couldn't be further from the truth. The prevailing wage rates are out of control. I think that raising the threshold is a great idea that is long overdue. Just as the pay rates are subject to cost of living increases, the threhold of project cost requiring prev wage rates should as well. Better for all the people, not the few, isn't that what the Union wants, the American way…no.?

    5. Robert Ruyak says:

      As a union worker who is being told that the I need to take a 30% pay cut for the good of the state by state employees that are making 2-5 times my annual salary I say show me your commitment to this principle by taking the same 30% pay cut for the people of Pennsylvania. Heck, how about cutting the largest state assembly in the country by 30%? If you are really serious about saving the state money, start with yourselves. How about you Govenor Corbet? Can you show real leadership? Can you put your money where your mouth is and take the same 30% pay cut that you are forcing on thousands of hard working pennsylvanians. It's really kind of tiring seeing those that are not making any sacrifices themselves forcing others to take sacrifices, isn't it? All am asking is that you treat me the same as you treat yourselves.

    6. ryan says:

      If PA reduces the prevailing wage rate, the quality of workers is gonna go way down. People will be lw ballign their bids to get there guys work, not bid it right and end up going under. We as prevaling wage workers( no i dont work for a union) are of a high skill and quality. To let any "joe shmoe" come in to a school where your kids are gonna attend let them have work cuz its fair is just stupid!!! Prevailing wage does not need to be reduced, we need more schools and skilled laborers.

    7. Marble1 says:

      The death of our unions will be the death of our nation. Think about it .

    8. owner/operator says:

      Was forced to higher 2 journeyman and an apprentice. NOT use my sons, job ,ran 180 hours over budget at 92.00 an hour

    9. mauricebrewington says:

      As stated above 30% of all construction projects go Union. Leaving 70% that go non-union. This is an attempt to crush union labor plain and simple. People need to realize that if the rates for Union tradesmen fall so will the rates for the non union. The only reason non union workers are paid what they are is to remain somewhat competitive in order to retain good workers. Why do Americans fall for this bs. People need to stop voti.g for what is best for their bosses and start voting for what is best for themselves. Unions provide people an oppurtunity to gain an education without being shackled with immense debt the way our universities burden the young. They provide safer working conditions and better benefits, which are paid for by the workers not the govt. This idea that union workers are lazy is about the dumbest line of propaganda out there. Do you honestly think an unproductive worker is tollerated on our jobsites? That's ridiculous! People like that are shown the door! In Montgomery County where I live and work ALL of the major construction project are built by union tradesmen. Hospitals, prisons, pharmaceuticals, nuclear plants. And the reason these customers turn to us is because we are THE BEST, THE FASTEST,THE SAFEST, MOST PROFESSIONAL. It not to say non union workers do not take pride in their craft, but our schools are superior, are expirience is unrivaled and the proof is in our work and the customers who hire us time and again. Why any worker would want to settle for substandard conditions is beyond me. The days of politicians pulling the wool over the publics eyes in an attempt to please their corporate backers are coming to an end. Americans are waking up!

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