Unions … Prevailing Wage Law Could Decide Local Elections

Prevailing wage and the possibility of its repeal in Pennsylvania may prove to be a major election issue for local political candidates this year.  The prevailing wage law was enacted in 1961 and applies to any project of more than $25,000.  The law requires workers on publicly funded construction projects get the going rate for the area and those end up being union rates. However, part of the problem, is that the prevailing wage threshold was never adjusted during the 50 intervening years.

We expect our school districts and local governments to survive with shrinking funds and few remaining options.  Desperate to find ways to stretch the taxpayer dollars more efficiently, local governments are often times faced with deferring construction projects as well as routine maintenance because they exceed the $25,000 prevailing wage threshold, making them too expensive.

State Rep Warren Kampf’s proposed legislation, House Bill 709 – “School Construction Cost Reduction Act” applies only to Pennsylvania school districts unlike other proposals that call for a repeal of the prevailing wage law. HB 709 would only exempt school districts from the state’s prevailing wage requirements.

In the midst of an economic crisis and on the edge of the financial cliff, HB 709 could be seen as a way to save cash-strapped school districts money.  According to Kampf’s legislative website, the Phoenixville School District school board as endorsed his proposed legislation which if approved, would give school districts the option of being exempt from the prevailing wage law.

The argument from the union side is that the proposed changes in prevailing wages will negatively impact union construction workers by reducing wages and suggest it will ultimately affect the communities in which they live. There is also concern that the quality of the construction work will diminish if prevailing wage law were to be repealed.  But how do you balance the state’s funding gaps against prevailing wage laws that may now be too costly?

Should Pennsylvania move in the direction of competitive private wages through reform or elimination of the prevailing wage laws?  Not if the union workers prevail.  Last week I wrote about the carpenters’ union rally in Paoli and was surprised when I was notified that a national union organization, The We Party, picked up the Community Matters story.  The article with photos of the Paoli rally, appear on the front page at http://wepartypatriots.com/wp/ side by side with union articles from California, Missouri, Florida and New York State.

According to their website, The We Party,

“… exists to counter and correct the excessive misinformation that is broadcast regarding the rights of the Modern American Worker and the needs of the New American Economy.  Our mission is to attract the American public to the information resources necessary to elect candidates who represent the country’s best interests and to encourage the American people to participate in the achievement of policy initiatives that embolden the middle class and those in pursuit of the American dream.”

When it comes to local school districts, it will be interesting if we see school boards supporting proposed prevailing wage legislation, such as HB 709 but will teachers support their fellow union brothers and sisters in the construction trades?

According to We Party Patriots mission statement, their support will be squarely behind the pro-union political candidates.  The prevailing wage debate may prove to be a deciding factor in local elections in Pennsylvania this year.

10 Comments

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  1. If you are interested to know what projects from TE school district and T township are subject to the prevailing wage act and what the hourly salary and benefit minimums are go to this page:

    http://www.portal.state.pa.us/portal/server.pt/gateway/PTARGS_0_2_120742_10515_0_43/public/Pages/Search.aspx?ID=&PageType=

    For the county type in: Chester
    For the agency type in: Tredyffrin

    The UCF school board passed a resolution in favor of HB1329 last month.

    A critique of the Prevailing Wage Act from a conservative organization:
    http://www.commonwealthfoundation.org/doclib/20120214_PPPrevailingWage2012.pdf

    [Reply]

  2. Keith, your state link is bad. Your Commonwealth link tells only one side of the story.

    Keystone Research reports:

    National analysis of data on school construction costs shows that prevailing wage laws do not have a statistically significant impact on cost.

    By far, the biggest impact on school construction costs is whether that construction takes place at times of low unemployment, when construction demand and prices are high, or at times of higher unemployment.

    School projects built at times of higher unemployment, when construction bids are much lower, can cost more than 20% less per square foot than schools built during times of high demand.

    There’s no question that repealing the state’s prevailing wage law will increase public-sector costs for health care because many employers will no longer offer health insurance, increasing the number of people who rely on Medicaid and uncompensated care.

    Like Walmart’s employees do now.

    A repeal of prevailing wages will reduce living wage jobs in PA without lowering construction costs to school districts ( plenty of research on this). The increased profit will just flow to the top.

    [Reply]

    flyersfan Reply:

    Walmart covers their employees..

    [Reply]

  3. Kate,
    Copy the web address and paste it into the address box in whatever web browser you use.
    .
    Let’s remember that the Keystone Research is governed by members of the AFL-CIO, PSEA, AFT, AFSCME, United Steelworkers, and APSCUF. In their view the prevailing wage act is wonderful. Well, it is wonderful if you’re a union member. It’s not so wonderful if you’re interested in providing an efficient education to our children.
    .
    My opposition to the prevailing wage act doesn’t come from some academic study from the KRC or the Commonwealth Foundation; it comes from first hand experience reviewing bids for work done at our school district. Contrary to what the KRC might think, It does reduce construction costs to school districts; just ask your facilities manager.

    [Reply]

  4. Who among us hires union laborers to do work at their home? Why is it that when it’s tax dollars involved, no one thinks there should be “supply = demand” pricing. Unions. Teacher Unions. Labor Unions. Transportation Unions.

    The tendency to bash unions is only due to the unbalance of power reflected in laws like the Prevailing Wage law….like the right to strike for PA teachers…

    Education, Steel, Autoworkers…..which industries are either struggling or gone?

    [Reply]

  5. excellent points and your illustration shows that the public sector (public schools) seem to must? hire union workers. Why is that?

    [Reply]

  6. I’ll defer to KK or KG on that one. The PSEA has the right to organize, and I believe non-union teachers only exist in theory — they have to pay dues whether or not they join the union, and the school district bargained that they would deduct dues for everyone, and the contract bargained by the PSEA applies to all employees. I’m NOT a lawyer, so someone else needs to explain.
    The district doesn’t hire union employees — they hire people who join the unions.

    [Reply]

  7. The union contract applies to all teachers, but not all teachers must be union members.
    .
    In some contracts non-union members must pay a “fair share” to the union since the union represents them at the bargaining table. In other contracts there is no “fair share” provision meaning that non-union teachers pay nothing to the union. “Fair share” is an item of negotiations at the table as per Act 15 of 1993. UCF does not have the “fair share” clause in their contract; TE does. “Fair share” dues are typically 80% of full dues, so, if there is a fair share clause in the contract, it’s an incentive for all teachers to join the union. Why be ostracized by union members for a small 20% savings?
    .
    From the TE contract:
    The Employer agrees, upon receipt of the names from the Bargaining Agent, to provide payroll deductions of the fair share fee from non-members, as allowed by law. The amount will be the percentage established for Tredyffrin/Easttown Education Association, Pennsylvania State Education Association, and National Education Association dues.

    [Reply]

  8. Surprised to hear that UCF doesn’t have fair share. May want to keep that quiet and not wake up the sleeping PSEA….though what percentage of your teachers are not union members?

    [Reply]

    Keith Knauss Reply:

    I don’t know and I don’t think it’s something that is available via Right to Know.

    [Reply]

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