Hearing: Wage laws not working

Pennsylvania’s Prevailing Wage Law has been a hotspot of controversy, and it was no less so at Thursday’s state House Labor and Industry Committee public hearing on prevailing wage reform at City Hall.

Lycoming County Commissioner Chairman Jeff Wheeland testified prevailing wage chokes even the possibility of some projects.

“We have a logjam of projects that can’t be done because of prevailing wage,” he said. “… Infrastructure is crumbling beneath us and we can’t do anything.”

Wheeland noted when federal Davis Bacon rates are applied, costs generally are lower. These rates apply to contractors working on federally funded or assisted public works projects greater than $2,000.

He said the planned $13.6 million Williamsport Regional Airport terminal would’ve cost an additional $350,000 had prevailing wage rates applied. As it was, Davis Bacon rates applied.

If Davis Bacon rates were applied to the county’s $15 million highway and bridge projects instead of state prevailing wage rates, about $4.5 million in project delivery costs could be saved, Wheeland said.

He cited the state Boroughs Association’s 2011 assessment of the impact of prevailing wage rates in the county: These rates are 56 percent higher than occupational labor rates for the area.

Loyalsock Township Manager and Treasurer Bill Burdett said the largest impact is on roadway maintenance. “We saw an immediate 20 percent increase when prevailing wages were applied to our paving bids,” he said.

Dr. Oscar Knade, retired superintendent of Williamsport Area School District and vice chairman of Preservation Williamsport Board of Directors, said the district’s seven school facilities projects were 30 percent higher due to prevailing wage. However, State Legislative Director Abe Abmoros, Laborers’ International Union of North America, said labor costs are typically only 19 to 24 percent of the total project cost.

Executive Vice President Jason Fink, Williamsport/Lycoming Chamber of Commerce, said Williamsport City Hall needs a new roof and other fix-ups, but the city “doesn’t have money for repairs” because of prevailing wage. In addition, in order for industry to grow and prosper in the area, infrastructure needs to be addressed.

President Frank Sirianni, Building and Construction Trades Council, argued that the real issue is the legislature needs to pass a transportation bill. “Prevailing wage is so minute” comparatively, he said.

However, Chapman Township Supervisor Tim Horner said the township has had to delay necessary handicap accessibility upgrades to the park and other projects because they can’t afford prevailing wage rates.

Cogan House Township Supervisors Chairman Howard Fry, also county planning commission member and vice president of the county Association of Township Officials, said the only way his county’s roads got paved was thanks to the natural gas companies $12 million investment. The problem is, when the roads need fixed, from where will the money come, Fry asked.

“Prevailing wage only helps a few people,” Fry said.

Sirianni said the workers deserve what they get paid. “Cutting standards are an insult to the construction worker; you’re devaluating what you think they’re worth,” Sirianni said.

Abmoros said quality of work will suffer if reform is imposed. “Without prevailing wage, these contractors are under no moral or legal obligation to pay a good wage,” Abmoros said. “… You want quality, qualified skilled craftsmen who do their job right the first time.”

Business manager Krystle Bristol, Bristol Excavating Inc., and Troy Borough Council member, gave her two main problems with prevailing wage: the tremendous amount of paperwork involved, and non-union contractors that don’t bid because of the rate.

“Instead of leveling the playing field for local contractors, it actually does quite the opposite by discouraging capable contractors from bidding due to the increased time and effort required to bid the project and certify payroll,” Bristol said.

Prevailing wage is used for public projects greater than $25,000, and the biggest problem reform proponents said is since only unions report wage rates, the state prevailing wage isn’t calculated correctly. Because union wage rates are closer to wage rates paid in larger cities, it often doesn’t match up with actual prevailing wages paid in rural areas.

Sirianni said reporting can be as easy as sending in a list of job classifications and payroll information to Harrisburg.

The issue with that is anonymity – businesses want to keep competitive and don’t want others to know their wages, said state Rep. Stephen Bloom, R-Carlisle. A bill needs to encourage submission on a confidential basis, he said.

The committee passed three bills, which may reach the House floor for a vote: House Bill 796 raises the threshold to $100,000; bill 1538 gives local government the authority to opt-out of prevailing wage for a minimum of four years; and bill 665 broadens the definition of maintenance work regarding road repairs.