Repeal of Indiana's 80-year-old common construction wage law gains momentum

Driven by a concerted effort from GOP leaders, the House quickly voted this week to place Indiana among a wave of states moving to abandon their prevailing wages.

Known here as the common construction wage, the current law almost guarantees union-level pay on billions of dollars worth of public projects. Rates are locally set by employers, labor and elected representatives. They vary by community, and can range from $12 an hour for an unskilled painter to $45 for a skilled elevator installer.

Supporters of the labor-friendly law say it deters out-of-state companies from undercutting local bidders on projects with cheaper, less-skilled labor. Critics say it artificially inflates wages and the costs of already-expensive government projects.

The Republican effort to fast-track a repeal of the prevailing wage is catching some off guard, inside and outside the Statehouse.

“This has all come on so fast,” said Dan Zuerner, vice president of Terre Haute-based Garmond Construction, which handles some of the largest government construction work in western Indiana.

Rolling back the law, he said, “would be a far more complicated issue than anyone realizes.”

Zuerner’s not alone in his surprise. In late January, Republican committee chairmen who serve as gatekeepers for labor bills at the Statehouse were convinced that the contentious issue was headed for a months-long study this summer – postponing action for at least another year.

“I didn’t know it was going to get legs,” said Sen. Phil Boots, R-Crawfordsville, chairman of the Senate Pensions and Labor Committee, adding that he was “very surprised” that GOP House leaders pushed the bill through.

“But things change around here,” he said.

This week, Boots again called for the measure to be sent to a study committee. However, he could be removed from the process should Republican Senate leaders break from protocol and assign the bill to a different committee.

Senate President David Long (R-Fort Wayne) suggested that may happen. “It’s coming over to the Senate, and we’ll hear it,” Long said.

The national movement to undo prevailing wage comes amid strong Republican gains in statehouses and continuing decline in unions’ strength across the United States.

“Once upon a time the ‘third rail’ of Indiana politics [was] the repeal of the common construction wage,” said House Minority Leader Scott Pelath (D-Michigan City).

While Indiana’s law has been tweaked through the years — including an increase in the threshold for projects where it applies — efforts to kill it completely have been largely dormant since 1995. That’s when thousands of union workers filled streets around the Statehouse to protest legislation to eliminate the law.

That was when Indiana was still considered a union-heavy state and more than 1-in-4 workers belonged to a labor union. Now just 1-of-8 do.

In recent months, 11 of the 32 states with prevailing wage laws have seen legislation to repeal measures that have been on the books for decades.

Republicans who took control of the West Virginia Legislature last November made it one of their top priorities. That effort was quashed last week when thousands of union supporters gathered on the Statehouse steps to protest.

Michigan lawmakers are debating a similar repeal, though its Republican governor has threatened a veto, saying it could open the door for out-of-state, unskilled labor to be used on the infrastructure projects.

Not so in Indiana, where Pence last week said he’d sign the repeal if it passes the General Assembly.

Both supporters and opponents of such measures say states have become the prevailing wage battleground, because efforts to kill a prevailing wage on federal projects, mandated by the Davis-Bacon Act in 1931, appear futile.

“There are always bills introduced [in Congress] to end Davis-Bacon, but they go nowhere,” said Tom Owen, a spokesman for the national AFL-CIO’s Building and Construction Trades Department. There’s still enough Republican support in the U.S. House of Representatives for the federal wage law, he said.

Glenn Spencer, executive director of the Workforce Freedom Initiative at the U.S. Chamber of Commerce, which backs efforts to repeal prevailing wages, credits expanded Republican majorities in statehouses in the 2014 elections with fueling the effort locally.

Republicans now control 67 of the 98 partisan legislative chambers, up from 59. That gives the GOP total control of 24 states – including Indiana -- in which they hold the governor’s mansion and both houses of the legislature.

In 16 statehouses – including Indiana’s – Republicans have super-majority control.

“This is the time when you’ve got legislatures and governors who now see an opportunity to take it on and make some actual progress on the issue,” Spencer said.

As they do it, they’re getting backing from pro-business groups. The conservative Americans for Prosperity, a free-market advocacy group funded by the billionaire Koch brothers, launched a radio campaign in Indiana before the House vote.

The ad, featuring two mothers complaining about the cost of school construction projects – now covered by the prevailing wage – is the start of what the group calls “a robust conversation on how to make sure we are getting the most out of our tax dollars.”

Political scientist Andy Downs, of the Mike Downs Center for Indiana Politics at Indiana University-Purdue University Fort Wayne, said that “tax savings” message is repeated across the multi-state effort. It resonates with voters concerned about the cost of public projects, and it diverts talk of it being the anti-labor measure that unions fear it is.

“You don’t have to be a rocket scientist to figure out what message works,” Downs said. “You just pick up a few key phrases and go with that.”

But that simple message avoids nuances that contractors worry about, including the fate of apprenticeship programs developed as a result of prevailing wage laws, and fears that skilled construction workers will leave the state for better-paying jobs.

“There’s a lot of storytelling going on, but not much truth,” said Jon Huston, a Kokomo electric contractor who opposes the repeal of the prevailing wage.