Hearing to look at modernizing prevailing wage law
Many congressmen and local elected leaders are unhappy with the state of prevailing wage and are taking steps to change it.
Members of the state House Labor and Industry Committee are seeking input on Pennsylvania’s Prevailing Wage Law in a series of hearings. One such hearing will be held from 1 to 4 p.m. Sept. 10 at Williamsport City Hall.
The hearing will include various approaches to reforming the Prevailing Wage Law, which hasn’t been updated since the early 1960s.
Lycoming County Commissioner Jeff Wheeland said he’s going to testify at the hearing.
“It’s obvious to me at the county and municipal level that prevailing wage needs reformed,” Wheeland said. Prevailing wage places “an additional burden on the taxpayer.”
Prevailing wage applies to any public works project estimated to cost more than $25,000, but that threshold hasn’t been adjusted to inflation.
Because of receiving outcry from several municipal governments, state Sen. E. Eugene Yaw, R-Loyalsock Township, sponsored a prevailing wage bill that would raise the threshold from $25,000 to $180,000 for any public works project, which the Senate Labor and Industry Committee may consider when back in session Sept. 23.
“The Department of Labor’s CPI inflation calculator indicates that if the current $25,000 threshold were to be adjusted for inflation, it would equate to roughly $187,000 in today’s dollars,” said Nick Troutman, Yaw’s aide.
Old Lycoming Township Supervisor Chairman John Eck favors the increased threshold, saying, “$25,000 at that time was the cost of building house, but you can’t build a house for that cost today.”
Eck expressed frustration with the cost of prevailing wage, saying the cost to do the same exact work, such as resurfacing a parking lot, costs much greater under prevailing wage.
“It’s the same equipment, the same asphalt, the same workers. … You’re paying for the same service, but you’re paying an inflated price because of prevailing wage,” Eck said.
In the end, it’s the taxpayer who gets the bill.
“The taxpayer is the one who’s being penalized on the bottom line. … If a municipality or governmental agency doesn’t have to pay prevailing wage, they can get more done with the dollars they do have,” Eck said.
Pennsylvania’s Prevailing Wage Law requires municipalities and school districts to pay the prevailing minimum wage to those working on public construction projects. The law doesn’t specify how the prevailing minimum wage in a locality is determined, so the secretary of the Department of Labor and Industry largely determines how to set the wage, according to state Rep. Mario Scavello, R-Mount Pocono.
Currently, the secretary uses the area union wage rates as the prevailing wage rate for public projects. However, reform proponents say the union wage rates are at wage rates paid in larger cities, and often don’t reflect the actual prevailing wages paid in rural areas. This may inflate public project costs from 5 to 20 percent, Scavello said.
On average, prevailing wage is 51 percent higher than regular wages Pennsylvania construction workers receive, according to the Commonwealth Foundation for Public Policy Alternatives.