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As Harrisburg dickers over transportation funding, will cooler heads prevail on prevailing wage?

A minor wage rule ends up threatening a transportation bill — and the state's economic future

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"When you go to the voters in a second term, they want to ask: ‘What have you done for me?'" Madonna says. "Is it enough to say, ‘I got budgets done on time, we spent less, and there weren't higher taxes?' The governor needs a victory."

The prevailing-wage proposal puts unions in a tough spot, too. They're wary of conceding lower wages on any project, but if a transportation-funding bill fails to pass, their members could be out of work entirely.

But putting the heated rhetoric aside, how much difference would changing the prevailing-wage law really make? And how did it become a bargaining chip that has threatened to derail a much larger transit bill?

Experts on both sides of the issue agree that raising the threshold to $100,000 wouldn't affect that many projects. At the state level, the change would have only affected 17 PennDOT projects last year that cost roughly $1.1 million, according to spokeswoman Erin Waters-Trasatt. That's about .06 percent of the agency's construction spending.

"There's no question [the impact] would be relatively minor," Miskin says.

"It's probably not going to impact very much," agrees Frank Gamrat, a researcher for the conservative Allegheny Institute for Public Policy. "But when you get down to the municipal level" — where small-bore projects are more common — "this is where it's going to help."

Raising the exemption to $100,000 is not a "huge concession" for Democrats, Gamrat adds. "This is how dealing is done."

Mark Price, a labor economist at the union-friendly Keystone Research Center, agrees that the projects affected would be a "tiny subset" of projects.

Still, he says, while the measure would not involve "giving away the farm ... you're giving away something you technically shouldn't have to give away."

In any case, he says, municipal governments will see little savings even if the wage requirement is eased. Price says that in states where prevailing-wage laws are eliminated, "average wages do come down. But we're not finding differences in cost" to taxpayers. Rather than swelling government coffers, he says, the money saved in wages is "probably going to profitability for individual contractors."

It's tricky to test claims about the fiscal impact on local governments, because there is little data on the number of projects or workers that would be affected. "There are 2,500 municipalities in the state — [they] aren't thinking, ‘I need to keep track of this data,'" says Amy Sturges, governmental affairs director for the Pennsylvania Municipal League. Still, the organization supports an increase in the prevailing-wage threshold as a separate issue from the transit bill.

But even though the Republican-proposed change may not be a big policy victory, it is precisely because there is so much political pressure to pass a transit bill that Republicans may feel it's the perfect time to chip away at the entire prevailing-wage law, says Madonna, the Franklin & Marshall political science professor.

"The business and labor community want the [transportation-funding] bill — they're united on that," Madonna says. But, he adds, "The unions fear the slippery slope. Rarely do people want to give up what they consider to be hard-earned [wages] for their members."

"It's not a good bill from the perspective of most people in organized labor," says Marty Marks, a communications consultant for labor groups, adding that it's a way for House Republicans to score points against unions in exchange for passing the transit bill.

"Labor is such a small portion" of construction costs, agrees Frank Sirianni, president of the Pennsylvania State Building and Construction Trades Council. "They want to cut workers' wages to subsidize [materials]."

But not all union advocates think the prevailing-wage proposal should be a deal-breaker.

Philip Ameris, president and business manager for the Laborers' District Council of Western Pennsylvania, is a union leader who has reluctantly supported changing the prevailing-wage law if it means his members won't lose their jobs.

"When you're negotiating you have to give and take," Ameris says. "If that's the way we get the bill passed, and that's the way we fix bridges, and they don't go after us again, I'm fine with that." And although he says he understands why many other unions vehemently oppose a change, "The last thing I want to do is to have a bridge fall or someone not be able to get to work ... and for that to be the responsibility of the union."

But while the impact of a prevailing-wage provision would be small, the transportation bill itself is another matter. For once, political rhetoric about the apocalyptic consequences of doing nothing might be justified:

"This is one of those pivotal moments that could be crucial to the future economic development in the state," Madonna says.

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