Governor’s mansion repair bid opens discussion on prevailing wage

[February 05, 2015]  By Scott Reeder and Greg Bishop

SPRINGFIELD — The Illinois governor’s mansion has a roof that leaks, a basement that floods, an elevator that doesn’t move and a repair bill that may be too high.

But the administration of Gov. Bruce Rauner is eyeing a way to reduce the cost of the Executive Mansion’s repairs as well as every other state or local government construction project.

Their solution may be eliminating the prevailing wage.

The Prevailing Wage Act governs the wages that a contractor or subcontractor is required to pay to all laborers, workers and mechanics who perform work on public works projects, according to the Illinois Department of Labor. A contractor or subcontractor is required to pay at least that wage, as appropriate for region and trade, to all engaged in the project.

This makes it difficult for non-union construction companies to underbid union contractors, Pat Newman, a Springfield general contractor, said.

Newman presented the state with two estimates on what it would cost to repair the governor’s mansion.

One estimate was based on his employees being paid their usual rate and the second is based on them receiving the “prevailing wage.”
 

If Newman’s company, Newman-Alton Inc., were to pay the prevailing wage, the cost to the taxpayers to repair the mansion would be $1.91 million. If there were no prevailing wage law his firm would charge $1.56 million,” he said.

He noted that the prevailing wage law increased the estimated cost of the project by 22 percent or $350,000.

“Through many, many years of organized labor and political situations its gotten really out of hand,” Newman said. “The taxpayers are feeling the brunt of it.”

“I’ll tell you where it really hurts is in these small towns and school districts,” Newman said. “It increases the cost of building schools and means fewer schools ultimately get built.”

But Jerry Lack, executive director of the Moline-based llowa Construction Labor & Management Council, says there are benefits to the prevailing wage law.

“Overall, it benefits the middle-class,” Lack said. “People need to have jobs that they can support families on. Prevailing wage helps make that a reality. … Some people make more money and they turn around and spend it in the economy and that turns around it creates more jobs.”

Not everyone sees it that way.

It’s tough to be a non-union contractor if you want to do government projects in Illinois said Jay Shirley, a heavy equipment contractor in Springfield.

Shirley, a former union member, said his work nearly dried up when he opened up his non-union shop in Springfield.

“I’ll just throw it out there,” Shirley said. “I did a job for the city of Springfield, and the unions come by and follow you and watch you. When I was done, I got turned into the Department of Labor. … There’s a lot of legal ways to strong arm a non-union guy to make it tough.”

Rauner administration officials say the “prevailing wage” is bad public policy, but declined to say whether the governor will call for rescinding during his State of the State address scheduled for Wednesday.

We don’t want to tip the governor’s hand, Mike Schrimpf, a Rauner spokesman, said.

“But when you think about it, a 20 percent or greater extra cost on capital projects across the state really hampers our ability to maximize the use of taxpayer dollars,” he said.

But Bob Bruno, Professor of Labor and Employment Relations at the University of Illinois, sees benefit in the prevailing wage.

“(T)hey’re good for getting projects done on time, they’re within the budgeted amount, there aren’t work stoppages on these projects,” he said.

[This article courtesy of Watchdog.]