The Quality Construction Coalition, an organization of construction employers and unions, is sponsoring a seminar on the report Monday, Feb. 26, from 9:30 to 10:30 a.m. and again from 2:30 to 3:30 p.m. in Room 318 of the state Capitol. Speakers will include University of Minnesota Professor John Remington and attorneys Burt Johnson, Jessica Looman, John Nesse and John Quarnstrom.
The report found the benefits of prevailing wage requirements on public works projects include:
• Higher levels of skill training.
• Higher levels of job safety.
• Higher tax revenues for state and local governments.
• Higher wages for construction workers.
• Higher numbers of workers with health coverage.
On the other hand, warns the privately sponsored report, repealing or weakening the existing prevailing wage framework is likely to harm the state\'s construction industry, cut state tax revenue, and erode the livelihoods of workers themselves.
The Quality Construction Coalition commissioned the report. The report\'s author, economist Lisa Jordan, led a team that conducted its own research and summarized existing national research. Jordan\'s analysis strongly favors the state\'s existing prevailing wage law.
Legislature expected to weigh in
Jordan\'s report was done, in part, to provide data to the state Office of the Legislative Auditor. Many of her findings were backed up by a report issued Feb. 5 by the Legislative Auditor. Among other things, it recommends the state strengthen its mechanisms for enforcing the law. Read the Legislative Auditor\'s report at this link: http://www.auditor.leg.state.mn.us/ped/2007/prevailingwages.htm
Current law requires state agencies to pay prevailing wages and benefits on nearly all their construction projects. Some local governments also have prevailing wage requirements.
However, opponents continue to criticize prevailing wage laws, especially how wages are calculated. Among other claims, they say the requirements make it more difficult for them to bid competitively.
 |
| Joe Hiltner, Carpenters Local 930, assembles a form on MnDOT\'s Wacouta Bridge project in South St. Paul. Photo by Michael Kuchta |
Report fears devastating results
If Minnesota caves in to critics and repeals or significantly weakens its prevailing wage law, the negative effects would pile up, Jordan\'s report says.
Based on results seen in other states, here\'s what we could expect:
• Construction wages will decline as much as 18 percent, in both the public and private sectors, in the first 3 to 5 years. Union wages would the fall the farthest.
• Lower wages will cut income and sales tax revenue in Minnesota by at least $37.8 million. The annual loss could be as high as $178 million, depending on how the law changed and how much wages decline.
• Health insurance, pension and other benefits will decline even more than workers\' wages. In states where prevailing wage laws have been repealed, workers\' access to health insurance drops by 79 percent, research shows. That shifts health costs onto other businesses and the community as a whole, Jordan\'s report says.
• Lower wages and reduced benefits will make it harder to keep workers, especially skilled workers, and to attract new workers to construction.
• Training, especially of apprentices, will decline. Apprenticeship enrollment rates are 82 percent higher in states with strong prevailing wage laws, research shows.
• Joint union-management apprenticeship programs will erode, leading to a further decline in training. These union-based programs provide most construction industry training in Minnesota and elsewhere.
• Fatalities and lost-time injuries on construction sites will increase. Other states have seen injury rates rise as much as 14 percent after repealing their prevailing wage laws.
Jordan\'s report is titled "An Evaluation of Prevailing Wage in Minnesota." Jordan is coordinator of the Business Program at Brevard College in North Carolina and a former staff member at the Labor Education Service in the Carlson School of Management at the University of Minnesota.
Adapted from Lakes and Plains Carpenter magazine, the official publication of the Lakes and Plains Regional Council of Carpenters.
Related article
Prevailing wages: A brief history
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The Quality Construction Coalition, an organization of construction employers and unions, is sponsoring a seminar on the report Monday, Feb. 26, from 9:30 to 10:30 a.m. and again from 2:30 to 3:30 p.m. in Room 318 of the state Capitol. Speakers will include University of Minnesota Professor John Remington and attorneys Burt Johnson, Jessica Looman, John Nesse and John Quarnstrom.
The report found the benefits of prevailing wage requirements on public works projects include:
• Higher levels of skill training.
• Higher levels of job safety.
• Higher tax revenues for state and local governments.
• Higher wages for construction workers.
• Higher numbers of workers with health coverage.
On the other hand, warns the privately sponsored report, repealing or weakening the existing prevailing wage framework is likely to harm the state\’s construction industry, cut state tax revenue, and erode the livelihoods of workers themselves.
The Quality Construction Coalition commissioned the report. The report\’s author, economist Lisa Jordan, led a team that conducted its own research and summarized existing national research. Jordan\’s analysis strongly favors the state\’s existing prevailing wage law.
Legislature expected to weigh in
Jordan\’s report was done, in part, to provide data to the state Office of the Legislative Auditor. Many of her findings were backed up by a report issued Feb. 5 by the Legislative Auditor. Among other things, it recommends the state strengthen its mechanisms for enforcing the law. Read the Legislative Auditor\’s report at this link: http://www.auditor.leg.state.mn.us/ped/2007/prevailingwages.htm
Current law requires state agencies to pay prevailing wages and benefits on nearly all their construction projects. Some local governments also have prevailing wage requirements.
However, opponents continue to criticize prevailing wage laws, especially how wages are calculated. Among other claims, they say the requirements make it more difficult for them to bid competitively.
|
| Joe Hiltner, Carpenters Local 930, assembles a form on MnDOT\’s Wacouta Bridge project in South St. Paul.
Photo by Michael Kuchta |
Report fears devastating results
If Minnesota caves in to critics and repeals or significantly weakens its prevailing wage law, the negative effects would pile up, Jordan\’s report says.
Based on results seen in other states, here\’s what we could expect:
• Construction wages will decline as much as 18 percent, in both the public and private sectors, in the first 3 to 5 years. Union wages would the fall the farthest.
• Lower wages will cut income and sales tax revenue in Minnesota by at least $37.8 million. The annual loss could be as high as $178 million, depending on how the law changed and how much wages decline.
• Health insurance, pension and other benefits will decline even more than workers\’ wages. In states where prevailing wage laws have been repealed, workers\’ access to health insurance drops by 79 percent, research shows. That shifts health costs onto other businesses and the community as a whole, Jordan\’s report says.
• Lower wages and reduced benefits will make it harder to keep workers, especially skilled workers, and to attract new workers to construction.
• Training, especially of apprentices, will decline. Apprenticeship enrollment rates are 82 percent higher in states with strong prevailing wage laws, research shows.
• Joint union-management apprenticeship programs will erode, leading to a further decline in training. These union-based programs provide most construction industry training in Minnesota and elsewhere.
• Fatalities and lost-time injuries on construction sites will increase. Other states have seen injury rates rise as much as 14 percent after repealing their prevailing wage laws.
Jordan\’s report is titled "An Evaluation of Prevailing Wage in Minnesota." Jordan is coordinator of the Business Program at Brevard College in North Carolina and a former staff member at the Labor Education Service in the Carlson School of Management at the University of Minnesota.
Adapted from Lakes and Plains Carpenter magazine, the official publication of the Lakes and Plains Regional Council of Carpenters.
Related article
Prevailing wages: A brief history