Prevailing wage bill advances in the House

by T.W. Budig
ECM Capitol reporter

A prevailing wage bill supporters herald as a means of getting idled construction workers back to work, detractors depict as slashing wages, advanced in the House today (Tuesday, May 3).

The bill would modify the Minnesota Prevailing Wage Act, which establishes minimum wages for construction workers working on state funded construction jobs.

Rep. Peggy Scott, R-Andover, is carrying the bill, which changes the prevailing hours of labor from eight hours a day to 40 hours a week — a change a House analysis suggests would have fewer workers getting overtime pay — while also changing how prevailing wages are calculated.

“This bill is about getting more Minnesota construction workers back to work,” said Scott in the House Jobs and Economic Development Finance Committee. She spoke of the legislation stretching state tax dollars.

But Scott’s comments drew some snickers from the packed committee room, filled with workers clad in bright vests and hard hats.

But officials from the business community, including the Minnesota Chamber of Commerce, endorsed her bill.

One former Republican lawmaker, Ray Cox, who works in the construction industry, styled it a “common sense” bill.

While some construction industry officials spoke of prevailing wage law driving up the cost of state funded construction projects, a 2007 report by the Office of the Legislative Auditor found that studies on the impact of prevailing wage laws on construction costs have produced mixed results.

“Most comprehensive studies have generally failed to find an impact that is statistically significant,” the report states.

Some testifiers were less neutral.

Economist Lisa Jordan, who studied prevailing wages several years ago at the behest of labor and unionized construction firms, argued that though counter intuitive, lowering prevailing wages doesn’t automatically translate into job creation.

Indeed, reducing prevailing wages would result in lower tax revenues for the state, loss of health care benefits for workers, and have other undesirable affects, she argued. “The data is so consistent,” Jordan said.

Scott indicated she believed her legislation will save the state money.

“I believe the proof will be in the pudding on this,” she said.

Beyond this, her bill is not attempting to eliminate state prevailing wage law, Scott explained, but rather reshape how prevailing wages are calculated.

The current method — one involving an annual survey of construction projects and determining the hourly basic pay, paid to the largest number of workers in a given job in a given area — would be replaced by a statistical averaging of salaries.

The auditor’s report indicated that the current method of calculating prevailing wages had flaws.

Scott’s legislation drew sharp comment from some committee members.

Some questioned whether the construction industry was ailing to the extent that prevailing wage law needed to be altered.

“I’ve never met a contractor in my life who says they’re making money,” ironically said Rep. Tim Mahoney, DFL-St. Paul, a pipe fitter by trade.

Rep. David Dill, DFL-Crane Lake, chided committee Chairman Bob Gunther, R-Fairmont, for putting Scott’s bill up for a vote without having more solid fiscal notes.

Advancing the bill was a way of “getting the blood off our hands,” he said.

Scott’s bill passed the committee without recommendation on a 9-8 vote.

Rep. Larry Howes, R-Walker, voted against the bill.

Another controversial prevailing wage bill, sponsored by Rep. Paul Torkelson, R-Nelson Township, also passed the committee.

The bill would change prevailing wage law for highway and heavy construction projects to not more than 10 hours a day or more than 40 hours a week.

Labor representatives and some committee members argued that longer working days in the physically demanding construction industry was not only bad for worker’s family life but dangerous for them.

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