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PA Chamber members applaud legislative effort to address prevailing wage threshold
Arbitrary increases to construction labor costs burden Pa. taxpayers PA Chamber members applaud a current legislative effort intended to help relieve Pennsylvania municipalities and school districts from prevailing wage mandates for relatively small projects. Legislation (H.B.1329) introduced by Rep. Fred Keller, R-Snyder, would adjust for inflation the state’s prevailing wage threshold, raising it from $25,000 to $185,000. The bill also would establish an automatic cost-of-living adjustment in order to index future rates to inflation. Adopted in 1961, the Prevailing Wage Act sets a minimum on wage rates that must be paid to construction workers on public projects. The rates too often don’t accurately reflect the market-based wages in a given area. The PA Chamber opposes prevailing wage mandates because they arbitrarily raise construction costs from 10 percent to 30 percent, which ultimately are passed on to taxpayers. Short of repealing the Prevailing Wage Act entirely, the PA Chamber supports automatically adjusting the wage rate to inflation in order to help school districts and local governments control their budgets. “Given the recent recession and continued economic challenges facing the Commonwealth, it doesn’t make financial sense to force cash-strapped public schools and local communities to pay artificially inflated labor costs on building projects,” PA Chamber Vice President Gene Barr said. “At the very least, prevailing wage requirements need to be adjusted for inflation and reflect today’s economic realities.” As part of its prevailing wage policy, the PA Chamber supports exempting economic development programs from prevailing wage; limiting changes to how prevailing wage policies are carried out; increasing threshold exemptions for projects; allowing entities to “opt in” or “opt out” of requirements; providing for open contracting; and letting individual localities determine prevailing wage rates. In 2008, the PA Chamber successfully prevented prevailing wage mandates from being included in legislation to extend Keystone Opportunity Zones. Implementing prevailing wage requirements would have reduced the KOZ program’s effectiveness to the point where its purpose of promoting business growth through greatly reduced tax rates would have been defeated. ### Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business. |
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