Perennial Prevailing Wage Debate Pits Towns Against Labor Unions
Municipal associations asked the legislature’s Labor Committee to support changes to the state’s longstanding and politically secure prevailing wage policy at a public forum Tuesday in New Britain.
Connecticut law requires contractors working on state and town construction projects to pay their workers wages and benefits at least equal to rates posted annually by the Labor Department. The prevailing wage law applies to all new government construction projects above $400,000 and renovation projects costing more than $100,000.
Prevailing wage frequently pits organized labor unions against municipalities. The unions believe the policy sets important wage standards for construction workers, and the municipalities view it as a burdensome unfunded mandate.
Although those thresholds have remained unchanged since 1991, they’re often challenged by legislation, usually from Republican lawmakers, seeking to increase the thresholds or scrap the policy. More than a dozen such bills were proposed last year and died in the Labor and Public Employees Committee.
Efforts to change the law may face an uphill battle in the committee, which is chaired by Democrats Sen. Cathy Osten and Rep. Peter Tercyak.
However, for representatives of the Connecticut Conference of Municipalities and the Council of Small Towns, the trigger modification does not seem like a big request. Litchfield First Selectman Leo Paul, a Republican, asked members of the committee to put aside their political allegiances and help relieve towns of costly mandates.
“We’re not asking that the prevailing wage be repealed. Simply, we’re just asking that it be updated,” he said.
Paul asked the committee to support legislation raising the threshold that triggers prevailing wage for new projects to $1 million and the trigger threshold for renovation projects to $400,000. He also asked that the technical distinction between a new project and repair work be clarified.
“Hometown leaders from both parties are realistic and recognize the political sensitivities of modifying any state mandate. For this reason local leaders seek reasonable compromises from increased construction costs known as prevailing wages,” he said.
However, not all local officials agreed. Middletown Mayor Daniel Drew, a Democrat, spoke in opposition to raising the thresholds. Drew said that workers in every community are responsible for funding their emergency responders and education system.
“If we increase those thresholds, you’re going to see workers all over the state of Connecticut bringing home smaller paychecks, which means less money is going into those local economies” and less money to pay taxes for public services, he said.
Labor Commissioner Sharon Palmer, who prior to her appointment by Gov. Dannel P. Malloy was president of a teachers union, also opposed changing the policy. She said some towns already have found ways to keep projects from reaching the threshold to require prevailing wage rates.
“Municipalities have learned to play games with the prevailing rate law,” Palmer said. “They cut down the contracts, cut them up into smaller pieces so they never reach the threshold. So I don’t think we need to change the law because that’s the reality.”
Paul disagreed with the assertion that towns were looking to shortchange construction workers.
“Make no mistake, municipal officials want all workers to be paid fair wages but the outdated prevailing wage thresholds that trigger this unfunded mandate are long overdue for an adjustment,” Paul said.
Tuesday’s hearing served as an informational forum on the topic. The legislature does not come back into session until February and it is unclear whether there are any plans to raise legislation regarding modifications the prevailing wage law.
A spokesman for House Speaker Brendan Sharkey said the speaker is not interested in reopening the prevailing wage issue. He pointed to an Office of Legislative Research report finding Connecticut’s thresholds among the highest in the country. Osten agreed but said she heard ideas during Tuesday’s forum regarding streamlining the prevailing wage process, which she intends to discuss with other Labor Committee members.