Business and Economics

House Committee Moves Bill To Eliminate Common Construction Wage

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February 18, 2015 — Indiana Public Broadcasting’s Brandon Smith reports.

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TheStatehouseFile.com

INDIANAPOLIS – A House committee voted Tuesday to eliminate the boards that set minimum wage requirements for public construction projects, a move that has rekindled a fight between Republican lawmakers and labor unions.

Supporters say the legislation will save taxpayer money but workers say it will mean lower pay and less skilled labor.

The GOP-controlled Employment, Labor and Pensions Committee voted 8-4 to send the bill to the full House for consideration and Republican Gov. Mike Pence said he’d sign the bill into law if it hits his desk.

“Throughout my career I have long believed that wages on public projects should be set by the marketplace and not by government bureaucracy,” Pence said. “This measure would save taxpayers millions of dollars and it would lessen the burden on cash-strapped local government sand local schools.”

If passed, House Bill 1019 –authored by Rep. Gerald Torr, R-Carmel – would eliminate a system that lets local boards set wages for contractors that work on projects of more than $350,000. The boards are made up of five members and have representation from both union and non-union contractors.

In many cases, the boards set minimum wages equal to the local union wage.

The legislation comes three years after a Republican-backed right-to-work law attracted thousands of protestors to the Indiana Statehouse and led House Democrats to stage a walk out that took them to Illinois for weeks. The GOP-controlled General Assembly passed the right-to-work law, which banned unions from charging fees to non-members they are required to represent, over the objections.

Monday’s committee meeting drew 45 Hoosiers to testify for and against the bill.

“At the end of the day this is a bill about taxpayer rights,” said Matt Bell, a lobbyist for the Regional Chamber of Commerce of Northwest Indiana. “It’s about accountability to taxpayers this is a bill that says that government mandated wages simply don’t make sense.”

Jason Horwitz, a senior consultant with Anderson Economic Group, said that studies in both Illinois and Michigan showed that repealing the common construction wage would save the state 10 to 20 percent on public construction projects. But not everyone thinks that’s case.

“In our industry, your cost of a construction project for labor is somewhere in the 17 to 20 percent range,” said Keith Rhoades the president of Rieth-Riley Construction. “If this passes – and it’s going to reduce costs by 20 percent – in my simple math mind that means labor is free.”

Union contractors that testified against the bill said that the legislation would only hurt Indiana’s economy and drive down wages.

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