Ohio uses prevailing wage to determine the cost of a project. Should local governments use the market to determine how much a job should cost?
We all have to pay for services. Our car breaks, we take it to a mechanic. Our kid needs braces, we take them to the orthodontist. We talk to the service provider, tell them our problem and we figure out how much it is going to cost. If we don’t like the price, we can go somewhere else. In Ohio, if our local governments want to get some work done, a new fire house, road work – there is one price set by the state. It is called prevailing wage. The wage is determined by county, so if you have a large city in your county but you are in a smaller township your local government pays the wage rate of the city.
The trades that are covered by prevailing wage include – glaziers, iron workers, general laborers, painters, platerers, roofers, plumbers and sprinkler fitters. A list of the wages in the 88 counties of Ohio are listed on the Affiliated Construction Trades website.
Ohio’s Prevailing Wage Law is codified in Ohio Revised Code (ORC) 4115. “Prevailing Wage is the required wage to be paid to skilled trades employees on public improvement construction projects.”
Where did prevailing wage come from? From the American Institute of Architects, prevailing Wage first became Ohio law during the Great Depression, April 23, 1931, House Bill 3, enacted by the Republican-led 89th General Assembly, to prevent out-of-state incursions against local, small businesses. Similarly, on the federal level (“Davis-Bacon”,) the purpose is to protect construction employers when bidding, including union-signatory and non-union companies:
The Act was “designed to protect local wage standards by preventing contractors from basing their bids on wages lower than those prevailing in the area.” House Committee on Education and Labor, Legislative History of the Davis-Bacon Act, 87th Cong., 2d Sess. 1 (Comm. Print 1962) (Legislative History). Passage of the Act was spurred by the economic conditions of the early 1930’s which gave rise to an oversupply of labor and increased the importance of federal building programs, since private construction was limited…. In the words of Representative Bacon, the Act was intended to combat the practice of “certain itinerant, irresponsible contractors, with itinerant, cheap, bootleg labor, [who] have been going around throughout the country ‘picking’ off a contract here and a contract there.” The purpose of the bill was “simply to give local labor and the local contractor a fair opportunity to participate in this building program.” 74 Cong. Rec. 6510 (1931).
Universities Research Ass’n, Inc. v. Coutu (1981), 450 U.S. 754, 733-74.
The law has gone through some revisions – changing the amount each job must cost for prevailing wage to take place and how the wage is calculated.
Prevailing Wage doesn’t just cover the hourly wages for workers. It also covers how much the government has to pay toward the tradesman’s – life insurance, pensions, health insurance, vacation or paid holidays, apprenticeship programs and ‘other bona fide fringe benefits’. This information was found on a detailed presentation from the Ohio Departement of Commerce, which also presented the many levels of responsibilities on both the side of the public authority and the contractor.
A change for prevailing wage in Ohio – This week, Senator Matt Huffman introduced Senate Bill 72 to provide a permissive exemption for local governments and universities. This bill doesn’t remove prevailing wage. It gives local governments and universities the right to choose whether or not they use prevailing wage for their building projects.
Senator Huffman said in Cincinnati Enquirer, “In areas where market wages are as high as prevailing wage, Huffman said, workers won’t see a pay cut. In other areas, such as small towns and sparsely populated counties, workers would earn the market rate.” “We build public buildings for the public, not for the builders of the buildings, and that’s how we should determine the costs – by the market,” Huffman said. Huffman doesn’t view his effort as an attack on unions or workers.”
Local governments should have the ability to develop contracts that are the best use of our tax dollars. The wage of workers should reflect how much it would cost for me as a citizen would pay for similar work. Workers should not expect more money for work just because it is a government job. The change in the prevailing wage will allow local to better serve the community.