By State Rep. Phyllis Mundy
A recent article in my local paper stated that Pennsylvania's Department of Labor and Industry (L&I) has discretionary authority to use area union wage rates as the prevailing wage for a given project. This is a common misconception about the prevailing wage law.
What this statement fails to recognize is that non-union contractors and subcontractors are encouraged to submit their wage data to L&I for determining prevailing wage rates, but typically choose not to do so.
The secretary of L&I determines prevailing wage rates using wage data voluntarily submitted by contractors and subcontractors (whether union or non-union) from local projects and paid to workers in those local areas. However, while collective bargaining agreements are regularly submitted to the department for use in rate calculations, non-union contractors choose not to submit their wage data and forfeit the opportunity to affect the wage rate calculation.
Pennsylvania's Prevailing Wage Act is championed by many as preserving decent wages for tradesmen in the highly competitive public works arena, as well as guaranteeing competence, skill and quality for tax dollars spent. The act ensures that projects impacting public safety are done right. A system that rewards the lowest bidders without regard to any labor cost guidelines will naturally favor employers who pay substandard wages in order to win the bid over competitors. This can result in fly-by-night contractors who employ low-paid, unskilled or out-of-state workers. The result would be the loss of jobs for local, highly skilled and experienced workers.
According to U.S. Census information, wages and benefits paid to construction workers typically account for no more than 24 percent of a project's total cost. Materials, engineering, design, the bidding process, and a contractor's profit margin make up the rest. In the past 10 years, the rising cost of construction materials alone has outpaced construction wages by nearly 25 percent.
It amazes me that so many go after the little guy at the bottom of the project ladder while so few direct their efforts toward the many other costs involved in a project.
It has been projected that CEOs will soon make more than they did before the recession began, while the wages of the middle class have remained stagnant. Without prevailing wage, many middle-class, working Pennsylvanians would have even less money available to support the local economy than they do now.
And that is why I will continue to work to keep provisions of the prevailing wage law intact to protect Pennsylvania workers and taxpayers.
Mundy represents the 120th Legislative District and serves as Democratic chairman of the House Finance Committee.