More than 6,000 workers and contractors sent letters demanding the hearing. As many as 150 jammed a Lafayette Park meeting room to witness the hearing, which lasted nearly eight hours.

For many it was personal ? a proposed state rule change that will affect their ability to earn a living.

From nearly three dozen speakers, the audience heard all kinds of claims, some supported by facts, some anything but.

Toward the end, economist Lisa Jordan spelled out clearly what's at stake. If Minnesota changes how it calculates apprentice wages, that will cut construction wages, she said. That will reduce ? not increase ? the number of skilled workers in the state. And that, she told Administrative Law Judge Richard C. Luis, will defeat the core purpose of the state's apprenticeship program.

Jordan was among speakers from labor unions and union contractor associations who attacked the proposed rule change at the Feb. 27 hearing and asked Luis to block it.

Others ? nonunion contractors, representatives from the anti-union Associated Builders and Contractors, and staff at the state Department of Labor and Industry ? supported the proposed rule.

Unions line up arguments against rule
The core of the proposal would alter the wage benchmark on which apprentice wages are based and instead set up a dual-rate system. In particular, the rule would allow the benchmark to be based on median wages determined in quarterly surveys by the Department of Employment and Economic Development.

Union representatives and other opponents told Luis the rule change to factor in DEED statistics would be illegal. They also argued the rule change would give a state seal of approval to cheap labor, give an unfair competitive advantage to low-wage contractors, place the profits of contractors over the well-being of apprentices, and undermine one of the best apprenticeship systems in the country.

Luis is expected to rule by the end of April on the fate of the rule change, which the Department of Labor and Industry is seeking on behalf of the nonunion ABC.

Those testifying at the hearing included (from left) state Building Trades President Dick Anfang, Sheet Metal Workers Local 10 Training Director Buck Palsrud, worker Clayton Oachs and attorney John Nesse. Union Advocate photos

Lower wages don't make jobs more attractive
Shifting the wage benchmark ? which is now based on the state-certified prevailing wage for a given occupation in a given county ? almost certainly will reduce apprentice wages and, over time, reduce wages in the construction industry as a whole, said Jordan, a former staff member at the University of Minnesota's Carlson School of Management.

Lower wages make it less likely that workers will enter the skilled trades, said Jordan, who testified on behalf of Building Trades unions. That will make it harder for Minnesota to meet the skilled labor shortage it faces as baby boomers retire, she said. "You don't do it by lowering wages. You do it by providing incentives for highly skilled workers."

Her view was echoed by David Semerad, CEO of the Associated General Contractors of Minnesota. "It's difficult to attract workers," he said. "You don't recruit new employees by offering lower wages and benefits."

Attorneys Brendan Cummins, representing Building Trades unions, and John Nesse, staff attorney for a half-dozen employer associations, told Luis that the proposed rule is vague, unpredictable and illegal under state statute. One provision, Nesse said, actually would promote unbalanced competition by making it possible for contractors to set up shop in a low-wage part of the state, such as Yellow Medicine County, then underbid competitors in the Twin Cities, who would be required to pay higher wages.

Contractors say they can't compete
Nonunion contractors, officials from the ABC, and representatives of other nonunion employer associations said they need the rule change to make it economically viable for them to register more apprentices with the state, give credibility to their training programs, and raise the skill levels of their workers.

Ken Javens, a Mankato contractor representing the nonunion Minnesota Electrical Association, said most association members don't train apprentices. But several other nonunion contractors told Luis they do train workers, just not through registered state programs.

The main reason they don't have state-approved programs, they said, is because it would require them to pay apprentices an increasing percentage of the prevailing wage. Under that standard, they said, apprentices in their third or fourth year often make more than veteran employees. That's especially true in Greater Minnesota, they said.

"It complicates the wage process when apprentices can earn more than journeymen," said Jay Tornquist, education director for Willmar Electric Service, a nonunion contractor that operates in Minnesota, Nebraska and Oklahoma.

Jordan stated the obvious, however, saying. "You could pay your journeymen more."

What's the real goal?
Nonunion contractors also questioned the statistical validity of the prevailing wage rate. It doesn't reflect real wages paid in their communities, they argued; instead, it too often reflects the dominance of union wages as set in collective bargaining agreements.

But figures from William Bierman, a staff attorney for the Department of Labor and Industry, contradicted that claim. Only about half the prevailing wage rates established in 147 commercial construction and highway heavy job classification ? 6,591 ? are union rates, he said. The other half ? 6,584 ? are nonunion rates.

The reality, said Dick Anfang, president of the Minnesota Building and Construction Trades Council, is that nonunion contractors don't want to pay prevailing wages because they want to pay their workers as little as possible and pocket the rest.

Prevailing rates already reflect wage differences between the Twin Cities, smaller cities and rural areas of the state, Anfang said. Using an example cited earlier by one nonunion contractor, he said the prevailing wage in Mankato is 25 percent lower than it is in the Twin Cities.

"They say the prevailing wage is too high. But nobody has stood up and said how much they want to pay below the prevailing wage," Anfang said. "Ten percent? Twenty percent? Thirty percent? Then pay apprentices half that?"

Anfang also said the ABC and the Department of Labor and Industry are flat-out wrong when they state that prevailing wage rates import public-sector wages into the private sector. The truth is just the opposite, he said; prevailing wages are the wages that actually exist in the private sector. Those wages then are required on public-sector work, he said, to ensure a fair playing field, and to prevent tax money from being used to undercut local standards of living.

Different perspectives
Nonunion contractors claimed they are "fenced out" of the current apprenticeship system, which they called ?exclusive" and "just for some." Robert Heise, president of the Minnesota ABC, said the state needs a dual system that reflects the fact that unions now represent only 29 percent of the state's construction workers.

Dale Zorb, of Building Restoration Corp. in Roseville, said prevailing wage requirements also prevent most nonunion contractors from bidding on public work.

But Anfang, who also sits on the state's Apprenticeship Advisory Council, which voted to oppose the rule change, disputed Zorb's argument. "Anyone who wishes to play by the rules can do so," he said.

Nesse, the attorney for six employer associations, said the proposed rule is an attempt to cater to "a group of employers who are unable to meet the state's standards. That's an insult to the employers I represent."

He said using DEED data will result in lower benchmark wages in 76 of the state's 87 counties. In the 11 other counties, the benchmark wage could be higher or lower, depending on the occupation.

In either case, he said, the proposed rule would force the director of apprenticeship "to consider two distinctly different wage rates with no guidance on how they should be weighed."

Nesse gave the example of Chisago County, where the prevailing wage rate for carpenters is $28.50, but the DEED rate is $17.73.

Under questioning, state apprenticeship director Jerry Briggs acknowledged he does not know how he would determine a wage benchmark under the new rules.

Track record raises doubts
Nonunion contractors repeatedly promised that, under a dual-rate system, they would expand the number of registered programs and apprentices.

But union representatives repeatedly raised doubts about the ability of ABC members to deliver on those promises.

"How can they be seen as credible on this issue?"Anfang asked. Union apprenticeship programs have 7,926 apprentices in 64 programs in 26 occupations, according to the state. Nonunion programs have 41 apprentices in 25 programs.

Union programs have built more than a dozen state-of-the-art training centers around the state ? "at no cost to taxpayers," he said; ABC claims to have one. Jordan pointed out that, in other states, union programs outperform ABC programs by more than 50 percent.

Figures from the U.S. Government Accountability Office show that union apprenticeship programs have a completion rate of 47 percent, compared with only 30 percent for ABC programs. In Minnesota, she said, union programs in licensed trades such as plumbers and electricians have completion rates of 95 percent.

"You have to get workers into the program and you have to keep them in the program," she said. "Minnesota apprenticeship programs are doing what works."

Jordan said it seems the state is willing to trade off a short-term gain in the number of apprentices for a long-term loss in the quality of apprentices.

Mark Wickstrom, apprenticeship coordinator for Bricklayers Local 1, scoffed at ABC statements that any training is valuable, even if a worker doesn't complete the training. That mindset, he said, undermines the integrity of construction trades. "We want workers who are fully trained.? We understand the importance of looking at an apprentice not as a liability or as a commodity, but as an investment."

Apprentices find a career, not just a job
Nonunion speakers ? some of whom praised union apprentice programs ? argued that establishing a dual wage rate would not impact union apprenticeship programs.

But Nesse said a common-sense interpretation of the facts contradicts that conclusion. Overall, Jordan said, the DEED rate in 19 construction occupations is 40 percent lower than the prevailing wage rate.

Other speakers said strong apprentice programs are more than wages.

Clayton Oachs, now a journeyman with Heat and Frost Insulators Local 34, said he previously worked three years for a nonunion company. Training was virtually nonexistent, he said. "It was learn as you go, and much of it was incorrect." Union training, wages and benefits "were like I had never seen."

Holly Patenaude, a second-year apprentice with IBEW Local 292, said she is amazed at the "state of the art" training she receives and now has "a career I can be proud of for the first time in my life."