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Should PA Require a Prevailing Wage on Public Projects? TV Smart Talk

Written by Nell McCormack Abom, Host Smart Talk TV | Apr 3, 2012 11:52 PM

Smart Talk TV returns tonight at 8 with the debate over Pennsylvania's prevailing wage law.  Since 1961, Pennsylvania has required municipalities and school districts to pay prevailing wages, set by the state Department of Labor in each region, to employees working on public construction projects that cost more than $25,000.  Critics want to reform, if not abolish, the prevailing wage law.  Join the conversation: post a comment below, call live tonight at 8 to 1-800-729-7532, or email us at smarttalk@witf.org

Critics say forcing builders to pay higher construction wages on public projects drives up taxpayer costs, threatens higher property taxes, limits bidders, discourages growth, and inhibits jobs.  They claim the prevailing wages often are driven by collective bargaining and union agreements that artificially inflate local pay rates. Sam Denisco, vice president of government affairs for the Pennsylvania Chamber of Business and Industry, wrote in a recent op-ed, "The prevailing wage mandate can raise the cost of taxpayer-funded construction projects by 5 percent to 30 percent -- creating more than $2 billion in extra costs for Pennsylvania taxpayers each year. According to data from the U.S. Department of Labor, the state Department of Labor and Industry, the Pennsylvania Association of Boroughs and Pennsylvania-based construction companies, the prevailing wage mandate costs a typical Pennsylvanian up to $230 per year and the average family of four up to $900 per year."

Supporters of the prevailing wage law counter that those numbers are grossly misleading. Economist Stephen Herzenberg, Ph.D., is executive director of the Keystone Research Center.  He argues that prevailing wages do not inflate public-project costs and actually help stabilize the middle class.   "Weakening prevailing wage laws is a failed policy that Pennsylvania already tried in the late 1990s and that didn't work," he writes.  "When it comes to construction work, you get what you pay for: prevailing wage laws help ensure the use of more skilled and experienced workers on state projects. That's why study after study that examines the cost of actual projects finds that prevailing wage laws do not increase costs—as Pennsylvania learned first-hand during the Ridge Administration." 

Herzenberg claims that the law ensures that state projects hire local workers rather than "low-wage workers from out of state."  You can read more of KRC's defense of prevailing wages on labor economist Mark Price's Third and State progressive policy blog. There are three bills pending in the state House that would increase the threshold for prevailing wages on projects from $25,000 to $185,000 and adjust it annually based on the Consumer Price Index, direct the state Dept. of Labor and Industry to develop a uniform list of workers' classifications and publish it on a website accessible to the public, and remove basic road maintenance projects from the act.     

Our guests this week include Rick Bloomingdale, president of the Pennsylvania AFL-CIO, Frank Sirianni, president of the Pennsylvania Building and Construction Trades Council, David Sanko, executive director of the Pennsylvania State Association of Township Supervisors and Priya Abraham, senior policy analyst at the Commonwealth Foundation for Public Policy Alternatives.  You also can email us at smarttalk@witf.org, post a comment below, or to witf's Facebook page.

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