COLUMBUS (TNS) — State Sen. Matt Huffman said he wants to relax the state’s prevailing wage law in part because local governments are already finding “innovative ways” to get around paying union-scale wages to construction workers.
State law requires counties, cities, villages and townships to pay minimum wages and benefits, called prevailing wages, to construction workers on public projects exceeding a certain cost. Construction workers and unions say prevailing wage rates prevent contractors from undercutting wages and encourage investment in training programs.
Huffman, a Lima Republican, introduced a bill allowing counties, cities, villages, townships and colleges and universities to opt out of paying prevailing wages.
At a Tuesday news conference, Huffman said a mayor in his district had a buddy build a building and the village bought it for a lesser price just to avoid paying prevailing wage. Responding to reporters’ questions, Huffman said he didn’t ask where the mayor was from and didn’t know details about the transaction. He said he wasn’t sure whether the deal was illegal and did not report it for further investigation.
“It’s an example of some of the things local governments are trying to do,” Huffman said. “I think we need to have transparency and make sure these local governments are actually paying what the market rate is.”
Supporters of Senate Bill 72, including county and village officials, say they could save millions of dollars on large projects by paying market rates instead of prevailing wages. Officials said the money saved could be used for additional infrastructure improvements.
What supporters say
Local government officials said Tuesday that prevailing wages prevent them from pursuing projects and make other projects more costly than they would otherwise pay.
Sidney Mayor Mike Barhorst said the Shelby County city spent $35 million in construction projects in recent years, including street repairs and expanding a wastewater treatment plant. Barhorst said a savings of $4 million to $6 million among all projects could have paid for construction of three or four more streets.
If allowed to opt out, Barhorst said, the city might still pay prevailing wage if the only bidder for a project paid it.
“Lowest and best is always our philosophy,” Barhorst said.
Prevailing wages are calculated by county based on union pay and benefits for certain jobs. For example, the total wage and benefits package for a bricklayer is $48.87 per hour in Cuyahoga County and $46.90 per hour in Ashtabula County.
Huffman said those wages are still higher than market wages in many parts of the state and said private projects and public school projects are not subject to prevailing wage.
“If we made people pay prevailing wage for their homes, there would probably be a riot,” Huffman said.
Micah Derry, state director for Americans for Prosperity-Ohio, said wages are best decided by the local marketplace, reflected by the cost of living there. Derry said in a statement his group will push lawmakers to pass the legislation.
“Although this bill does not fully repeal the prevailing wage, it will allow political sub-divisions to determine what is best for their budgets and communities,” Derry said.
What opponents say
Matt Szollosi, executive director of the Affiliated Construction Trades of Ohio, said trimming labor costs would save little while damaging the state’s ability to train and employ skilled workers.
Szollosi said labor costs are about 23 percent of a project budget, and studies have shown there is little difference, on average, between bids from union contractors and non-union contractors.
“Budgets get tight so let’s go kick workers in the teeth — that’s the message being sent with this bill,” Szollosi said during a Tuesday news conference.
Szollosi said weakening or eliminating the prevailing wage law would cause a 16 percent decrease in wages, which would trickle down to cuts in benefits, pensions and contributions to apprenticeship programs.
Szollosi said unions spent $60 million last year on apprenticeships that ensure projects are completed by skilled workers. Of the 10,550 workers enrolled in apprenticeship programs last year, 83 percent were in union programs, according to state data.
Kevin French, a sheet metal worker from Columbus, said prevailing wage covers health and retirement benefits needed for physically demanding jobs. He’s worked in states without prevailing wage laws and said the wages are so low there they have trouble recruiting construction workers and finding qualified workers for specialized work.
“If you pay nothing, you get nothing,” French said.