INDIANAPOLIS | Public construction projects could cost less -- and Hoosier building trades workers likely would earn less -- under legislation approved 55-41 on Monday by the Indiana House.
House Bill 1019, which goes to the Senate, scraps the common construction wage. It is a tool used for 80 years by the state and local governments to set pay rates on their building projects if valued at more than $350,000.
State Rep. Jerry Torr, R-Carmel, the sponsor of the measure, believes it violates free market principles to have five-person boards — made up of union and nonunion contractors, along with two local taxpayers — decide how much each position on a public construction job will be paid.
"This is going to let the free market work on public works project bids, so the taxpayers get the best deal for their money," Torr said.
Torr estimated Indiana governments could save 10 to 20 percent on their building project costs by eliminating what he described as "an artificial minimum wage."
"This is for your local communities, your schools," Torr said. "This is taxpayer protection."
Northwest Indiana representatives were not convinced. The region's entire House delegation, including the six Republicans, voted against the proposal.
State Rep. Chuck Moseley, D-Portage, argued the only way eliminating the common construction wage saves money is by reducing the wages paid to workers, which ripples through communities as residents then have less money to spend at local businesses, or low-wage, untrained workers are brought in from elsewhere and send their wages home.
"If you really believe that lowering wages in your community is what people sent you here to do, then you vote for this bill," Moseley said.
"I oppose the bill, and I think you should oppose the bill, too."
House Democratic Leader Scott Pelath, D-Michigan City, reminded the Republican supermajority that the common construction wage was created by Republicans in the 1930s to prevent low-wage, out-of-state companies from underbidding Hoosier contractors.
Repealing the common construction wage will once again make that possible and likely cost government in the long run, as money saved on construction projects will have to go toward safety-net programs for Hoosiers, both union and nonunion, who lose their jobs as a result.
"You can't keep saying the solution to every economic problem is to devalue people's skills and devalue their hard work. That doesn't solve anything," Pelath said.
"Ultimately I think each of you have to look inside your hearts and decide what kind of state you want to have."
The legislation, which is supported by Republican Gov. Mike Pence, faces an uncertain fate in the Republican-controlled Senate, where state Sen. Phil Boots, R-Crawfordsville, chairman of the labor committee, believes more in-depth study is needed before a final vote.
However, it wouldn't be unprecedented for Senate President David Long, R-Fort Wayne, to divert the proposal to a more friendly committee, if necessary, to win approval.