Louisville Mayor Jerry Abramson (D) uses his veto pen about as often as a Kentucky Derby winner ends up with the Triple Crown—almost never.
The leading politician in Kentucky’s largest city and home of the Derby used that pen for only the third time in 20 years on May 19. Abramson vetoed the Labor Standards Ordinance (O-32-03-09) that would have forced contractors to pay artificially higher wages on private construction projects that receive at least $500,000 in city tax dollars.
In addition to the government-imposed wage requirements, the ordinance would have required:
* at least 75 percent of the project’s jobs be filled by local workers, with a minimum of 20 percent of jobs filled by minorities and 5 percent by women;
* all major contractors to participate in formal training programs; and
* all workers be given “the opportunity” to have access to health care benefits.
Veto Followed Heated Vote
Abramson’s veto came a week after the Metro Council passed the prevailing-wage requirement on a contentious 16-10 vote taken at 1:30 a.m. after five hours of debate.
Louisville faced budget problems that had forced around $27 million in cuts, including the elimination of 528 positions and layoffs of 119 workers beginning in June. The mayor said the wage ordinance “would put Louisville at a serious disadvantage with competitor cities in attracting private-sector jobs and economic investment at a critical time.”
Hal Heiner, a leading Republican councilman, supported Abramson’s decision.
“Louisville would have been one of the few cities in the Midwest offering an incentive with one hand and then slapping the very company we were trying to entice with the other, by forcing our way into their business practices,” Heiner said. “It is doubtful any company would have placed Louisville on their short list of proposed locations given such aggressive action by government.”
GE Operation Affected
An attempt to attract General Electric’s new high-efficiency water heater manufacturing plant to Louisville’s Appliance Park could have been affected.
“The ordinance as introduced would have required GE to pay prevailing wage on any construction related to the project—maybe forever—and utilize only workers enrolled in a federally approved training program,” Heiner said.
GE could have been forced to pay prevailing wages, as determined by a confusing and convoluted process used by the Kentucky government, “even if they were in excess of the negotiated union contracts in place with GE,” Heiner added.
Councilwoman Vicki Aubrey Welch, who voted with the majority, said fellow Democrat Abramson’s veto was more about the threshold required before prevailing-wage mandates applied.
“He wanted a higher ceiling; he’s not opposed to paying prevailing wages,” Welch said, pointing to other prevailing-wage projects supported by the mayor, including the new $238 million downtown arena scheduled to open in November 2010.
An amendment to raise the prevailing-wage threshold to $5 million was offered during the five-hour meeting, but it was not approved.
‘We Are Protecting Workers’
Welch said she supports prevailing-wage policies because they ensure better-trained, more highly skilled workers and safer working environments.
“We are protecting workers in our community,” Welch said. “We want them to get good wages and good benefits. We don’t want contractors benefiting from unskilled and perhaps even illegal immigrant workers.”
Heiner said the ordinance would have hurt many of those skilled workers Welch claimed it would help.
“It would have hurt local workers by locking out small and minority businesses, which are predominantly non-union and make up a large majority of Louisville’s skilled workforce,” Heiner said.
City ‘Well Served’
Labor union bosses said they will remember Abramson’s decision at election time.
But supporters echoed a statement by the Kentucky Opportunity Coalition, a newly formed Louisville public policy group, that “Louisville’s overall economic climate was well served by the Mayor’s veto.”
The coalition’s statement lambasted the Metro Council, saying it “sent a strong anti-business signal by enacting this ordinance” and the policy would “drive prospective employers to other more business friendly environments.”
Jim Waters ([email protected]) is director of policy and communications at the Bluegrass Institute for Public Policy Solutions in Bowling Green, Kentucky.