Philosophical divide over prevailing wage apparent in interim committee meeting on report

12/16/2014 07:48 PM

Kentucky’s prevailing wage laws have increased labor costs for school projects and Financial Cabinet projects over what the labor costs would have been if workers were paid the wage they earned on private projects according to a Legislative Research Commission report.

The report titled, “How Kentucky’s Prevailing Wage Laws Affect Public Construction,” presented on Tuesday to the Program Review and Investigations Committee by the Legislative Research Commission, was ultimately not adopted by the committee.

Kentucky’s current prevailing wage law specifies that contractors must pay workers at least the prevailing wage on state, local and public works projects estimated to cost more than $250,000.

Larry Roberts, Secretary of the Labor Cabinet said that prevailing wage has led to an overall better quality of work.

“Productivity becomes a very important aspect of the impact of prevailing wage and what goes on at a construction site that you can never forget about,” Roberts said. “Most of the studies will tell you that prevailing wage does encourage investment in education training.”

Wilson Sears, who represented the Kentucky Association of School Superintendents, says that most of his organizations members have had issues with the prevailing wage law in terms of costs to their districts for projects.

According to the LRC report, school projects costing $1,908,972 with prevailing wage would cost $1,264,757 with private wage — a difference of $644,397.

“All superintendents work on the premise that project cost is going to be increased somewhere between 17 and 20 percent as a result of prevailing wage,” Sears said.

Rep. Rick Rand, D-Bedford, feels that prevailing wage is good for the workers in the commonwealth since it puts more money in their pockets to spend.

“Why shouldn’t it be the policy of this state that we put money in the hands of working people,” Rand said.

The comments to Spears and the committee led to a tense moment between Rand and Sen. Chris McDaniel — the committee co-chair.

The vote to adopt the report was split along party lines with Republicans voting yes and Democrats no to adopt the report.

Interim committee co-chair Sen. Chris McDaniel, R-Taylor Mill, who is running on a GOP ticket for Lt. Gov. alongside James Comer, said the issue should not be a partisan one.

“Should the government be engaged in raising wages on these projects or should it be set by the private sector,” McDaniel’s rhetorically asked. “What you’ve got to remember is when you increase the wages like this, it also decreases the number of projects that you can do.”

McDaniel said that it’s up to the leadership of the Senate whether prevailing wage will be one of their main priorities for the 2015 session.


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