The Broken Promise

Report from wvbrokenpromise.com

Legislative leaders pushed through a law to cut local construction workers’ wages dramatically claiming the action would save money and create more jobs.

Despite overwhelming evidence to the contrary, Republican legislative leaders quickly passed a bill to eliminate the state’s prevailing wage law.

The legislative leadership promised taxpayers would see a savings of 25 to 30 percent on public works projects.

There hasn’t been the promised savings based on examination of the award of bids since July 1 when the law went into effect and during a three-month period in 2015 when the Legislature suspended the prevailing wage law.

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AGC of Ohio Chief Debunks Prevailing Wage Detractors

Submitted by Karen Andryscik on
August 28, 2017 – 8:19am

By Richard J. Hobbs, Executive Vice-President – AGC Columbus

After 36 years at the helm of the Associated General Contractors of Ohio (an organization composed of open shop/nonunion and union commercial contractors throughout the state), I’ve heard many outrageous, false claims about significant savings by removing Ohio’s prevailing-wage law. I respond to the Aug. 19 op-ed by Butch Valentine, Laurelville’s volunteer fire chief, blaming the Ohio wage law for the inability to build a new fire station.

Valentine contended that the law inflates the cost of a new facility by 37.5 to 50 percent. This is an outrageous statement. Construction labor represents on average 22-25 percent of a project cost, depending on complexity. Valentine indicated that the cost of a $800,000 fire station would be increased by $300,000 to $400,000. Either his original architectural plans excluded labor costs or he was counting on volunteer construction labor.

He went on to cite inaccurate claims as factual. His referred to the Legislative Service Commission study of 2002 that was thoroughly debunked by Ohio State University Professor Herbert Weisberg, and by a 2017 study from researchers at Bowling Green State, Kent State and Colorado State universities. It found that “LSC had no valid basis” to its claimed cost savings. Valentine further asserted that prevailing-wage projects had less competition. Wrong again. The 2017 study found that projects covered by prevailing wages had more competition, and that more of those contracts went to Ohio construction companies, not out-of-state firms.

Valentine also suggested that Indiana has seen significant savings by repealing its prevailing-wage law. Once again, false. The Indiana Republican assistant House majority leader candidly admitted this year that his state hasn’t “seen a dime of savings out of it,” and that claims of huge savings from repeal, like Valentine’s, were just “rhetoric.”

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Prevailing wage: Good for workers, good for business (CT)

AUGUST 28, 2017
KIMBERLY GLASSMAN

Gov. Malloy and the legislature are considering deep cuts to municipal aid in order to rectify an over $3 billion budget deficit. Connecticut’s Conference of Municipalities (CCM) is rightfully concerned, and looking for other means to keep municipal budgets balanced. One of its main proposals is to raise the thresholds as to when our state’s prevailing wage law is triggered on public construction projects.

Connecticut’s current prevailing wage thresholds are $400,000 for new construction and $100,000 for renovations. If a project falls below that threshold, then workers only have to be paid the minimum wage. When CCM proposes an increase to the thresholds, they’re proposing that more construction workers be paid the minimum wage rather than the family sustaining prevailing wage.

The truth is CCM’s proposal will make Connecticut less competitive. Our neighboring states, Massachusetts and New York, have a zero threshold on prevailing wage, meaning that the wage protection is triggered on dollar one on public works projects. Rhode Island’s prevailing wage threshold is $1,000, which is less than the federal threshold of $2,000. And New Jersey’s threshold is $15,444. We don’t want to lose skilled workers to our surrounding states.

Opponents to prevailing wage perpetuate a misconception that the wage protection somehow only benefits union workers or union companies. But that is not true. Non-union contractors also perform work on publicly funded projects. And all construction workers, regardless of union affiliation, benefit from the prevailing wage law. Prevailing wage rates are based on surveys conducted by the U.S. Department of Labor of what local contractors actually pay workers on public works projects in the state.

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National Poll: Most Voters Support Prevailing Wage on Public Infrastructure Projects

By SMART CITIES PREVAIL

“While voters may have disagreed on many issues this past November, they agree that prevailing wage laws should be preserved by a wide margin,” said pollster Brian Stryker. “Only 21% of voters want to eliminate prevailing wage laws-even after hearing a commonly referenced argument for doing so. And support for prevailing wage extends to large majorities of Democrats, Republicans, Independents and Trump voters.”

Construction is America’s fourth largest industry, and directly supports more than 6.6 million jobs. About a quarter of annual construction output, or $363 billion, is spent on government owned construction projects-including roads, bridges, schools, transit systems, water projects and municipal buildings.

Prevailing Wages are determined by surveys of existing market wage and benefit rates for skilled craft workers-such as carpenters, plumbers, electricians, ironworkers, cement masons, heavy equipment operators and others-in more than 3,000 communities across America. The Davis Bacon Act requires prevailing wage on most federally funded construction projects while about thirty states have laws requiring prevailing wages on state or locally funded projects.

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(See Poll Summary)

Cleveland-area contractor sentenced to prison for paying workers criminally low wages (OH)

By Eric Heisigon January 17, 2017 at 2:54 PM, updated January 17, 2017 at 5:47 PM

CLEVELAND, Ohio — A Cleveland-area contractor who paid his employees criminally low wages while working on projects for the Cuyahoga Metropolitan Housing Authority was sentenced Tuesday to 21 months in federal prison.

Marcus Butler, who operated of L & B Electric of Northeast Ohio, lied on forms between 2011 and 2013 and said he paid his employees $126,514.80 more than he actually had when doing subcontracting work at three CMHA properties.

The work was part of a federally-funded project, as the CMHA receives money from the U.S. Department of Housing and Urban Development. Under federal law, employers working on federal projects are supposed to pay their workers a certain rate, known as a “prevailing wage.”

Butler, 32, of Bedford was indicted in 2015. He pleaded guilty in September to 61 counts of making false statements.

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Prevailing wage law good for Wisconsin

Steve Lyons, Wisconsin Contractor Coalition
9 a.m. CDT April 25, 2015

 

Currently there is an effort to repeal or substantially minimize Wisconsin’s prevailing wage law. This would hurt Wisconsin businesses, its skilled labor force and our economy.

Wisconsin’s prevailing wage regulations require that construction workers on public works be paid a specified combined wage and benefit package, broken down by trade and location. The rates are set based on the wages and benefits paid on projects similar to public works in the local area.

This public procurement regulation has recently raised two questions: Should the government interfere with the “free market?” Should construction on public works have a special minimum wage regulation?

Government is the single largest purchaser of local construction services. In 2012, in Wisconsin, 20 percent of all construction purchases were public works.

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Study Perfectly Illustrates Why Arguments Against Prevailing Wage are Illogical and Absurd

March 2015 – As in many states across the country, there is a vigorous debate underway right now in our neighboring state of Nevada over whether construction workers on public projects deserve to be paid the wage that prevails and is paid to the vast majority of construction workers in a state, whether it be on private or public projects (the prevailing wage).

As in those other states, Nevada Democrats are fighting to protect workers’ wages, while Republicans are crusading to slash them. These Republicans, who ran as “middle of the road” Republicans, wooed and appealed to the values of union working people, who failed to recognize them for the threat they were. These Republican politicians won the votes of too many unionized workers, including Building Trades workers, and took over Nevada’s government.

But they were wolves in sheep’s clothing, and once in power, reverted to their true nature, taking a terrible toll on the working families that helped elect them.

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(PDF Copy of Study)

Self-Sufficient Construction Workers

This study explores the impact of prevailing wage laws (PWLs) on tax revenues and government assistance. The analysis has resulted in the following key findings:

Prevailing wage laws support the local economy.

  • Prevailing wage laws build local middle-class jobs by paying a living wage and protecting the use of in-state contractors.
  • Prevailing wage laws drive economic development through increased consumer demand. Workers making a decent living spend locally, driving the need for additional employment in local businesses.
  • Prevailing wage laws are they best deal for taxpayers. Prevailing wage projects are done right the first time, on time and within budget. Workers receiving the prevailing wage pay more in taxes (protecting the tax base) and are less dependent on government assistance subsidized by taxpayers.

Prevailing wage laws contribute to government budgets.

  • Construction workers earn an average income (from wages) of $29,984 per year in non-PWL states and $32,064 per year in PWL states.
  • Better wages mean a stronger tax base, helping policy makers balance budgets without the need to raise taxes.
  • While construction workers earn 8.0 percent more in PWL states than their counterparts in non-PWL states, they contribute 35.7 percent more in after-credit federal income taxes.
  • Construction workers in PWL states account for 75.4 percent of all federal income tax revenues after credits and deductions, 71.8 percent of after-credit state income taxes, and 77.4 percent of property taxes contributed by blue-collar construction workers.

Taxpayers subsidize the low-wage, low-skill, low-quality system in non-PWL states.

  • Construction workers in non-PWL states account for just 24.6 percent of after-credit federal income tax revenues. By contrast, they receive disproportionately more government assistance: they get 33.0 percent of all Earned Income Tax Credit (EITC) assistance and 31.8 percent of all food stamp benefits paid to blue-collar construction workers.
  • Due to lower rates of health insurance and retirement coverage, the absence of a PWL also increases construction worker reliance on government programs during times of illness, injury, and old age. This can be, for example, emergency room care subsidized by the taxpayer.
  • Construction workers in non-PWL states receive $0.603 in non-health, non-retirement government assistance per dollar of federal income tax contributions compared to $0.580 per dollar for PWL workers. The comparable figures are $0.543 per dollar in Indiana and $0.272 per dollar in Illinois.
  • Higher percentages of construction workers in non-PWL states have no health insurance coverage (45.0 percent to 40.9 percent) and no pension plan at work (77.8 percent to 72.2 percent).
  • Higher percentages of construction workers in non-PWL states live in public housing (2.2 percent to 1.8 percent) and receive food stamps (12.3 percent to 10.7 percent) at the expense of the taxpayer.

Prevailing wage laws are the best deal for taxpayers. A PWL keeps construction costs down by promoting a high-skilled, high-quality construction workforce that completes jobs on time, the first time. A PWL also supports in-state contractors and builds local middle-class jobs while driving economic development. Ultimately, prevailing wage laws protect worker incomes and raise tax revenues while reducing reliance on government assistance. Prevailing wage laws should be enacted or strengthened in states across America to protect the middle class and support strong budgets.