Anti-Union Legislation (HB190)

Prevailing Wage Bill Prompts Familiar Debate; Contractors’ Group Relays Support While Top Democrat Is Critical

A construction trades company on Wednesday told House members it wants to see the elimination of prevailing wage but nevertheless supports a bill that would raise the cost threshold for state contracts.

House Minority Leader Rep. Tracy Heard (D-Columbus) meanwhile denounced the bill (HB 190 ), which raises the threshold to $3.5 million. The state is already slated to soon phase in the third phase threshold increase to $250,000, as required under the last biennial budget.

Bryan Williams, director of government affairs for Associated Builders and Contractors of Ohio, told the House Commerce & Labor Committee the bill gives the legislature the opportunity to repeal for local government and reduce for state government one of the largest unfunded mandates: prevailing wage, he said.

He said prevailing wage was created to raise costs and block competition – not by law but by practice. Elimination of prevailing wage would likewise reduce costs for public entities.

Answering Rep. Matt Lundy (D-Akron), Mr. Williams said he supports full elimination or a phase-out of prevailing wage.

Rep. Nick Barborak (D-Lisbon) asked what the average cost of labor is as a percentage of total construction cost. Mr. Williams said prevailing wage projects spend 30% or more on labor; in non-prevailing wage with standard construction materials it could be as low as 20%.

Mr. Barborak asked if the elimination of prevailing wage would then mean a 60% or more reduction in wages. The witness said one would see a slight decrease in wages of 5-15% but the overall cost of labor would go down because of the elimination of work rules associated with prevailing wage.

“There would be a reduction in labor wages paid but not to an individual worker,” he said, adding he thinks the overall reduction would be 30-40%.

Mr. Williams told Rep. Robert Hagan (D-Youngstown) prevailing wage puts itself in the middle of fair market principals to require the state to “over pay” for labor.

Rep. Barborak asked if the bill means unbalancing power to put workers in a position with no protection for their wages. Mr. Williams said the measure does not impact collective bargaining laws.

He said at least 50% of public projects done by local governments are done by nonunion employees.

Sponsoring Rep. Ron Hood (R-Ashville) asked why government entities should pay more in wages than the private sector does. The witness said he cannot give a good reason why the state should pay more for the same thing built in the private sector.

Rep. Heard said in a release that the bill would “undoubtedly” hurt minority contractors.

“This bill would encourage disreputable out-of-state contractors to flock to Ohio, bringing their undertrained, underpaid workers with them and depressing the wages of hard working Ohio men and women– union and non-union alike,” she said. “For Republicans in the Statehouse to talk about the importance of creating Ohio jobs, then propose a bill that directly undercuts quality jobs for Ohioans is both derisive and hypocritical.”