The Ohio Legislature is considering bills to free local governments from prevailing-wage requirements for partnerships with private businesses on capital infrastructure projects.
Prevailing-wage laws regulate the compensation for workers on public capital projects, such as school construction and road repair, instead of allowing businesses to set their own pay rates according to market value.
In April, state Rep. Craig Riedel (R-Defiance) introduced House Bill 163 to repeal mandatory prevailing-wage requirements for local governments and taxpayer-funded colleges. State Sen. Matt Huffman (R-Lima) proposed a similar bill, Senate Bill 72, in the Ohio Senate. It was assigned to the Senate Finance Committee in March, where it awaits a vote.
Huffman says local lawmakers should be given more flexibility, instead of being forced to follow one-size-fits-all mandates.
“With public construction projects, the state mandates to local jurisdictions—cities, villages, counties, park districts, zoos, libraries, fairgrounds, anything that is public construction—that they have to pay the construction workers a certain wage, which is euphemistically called a prevailing wage,” Huffman said. “What our bill says is that each jurisdiction can decide for themselves, separately, whether they want to comply with these mandates. In other words, it won’t be a mandate, it will be permissive. Let’s just let the local jurisdictions manage their own shops.”
Calls Policies Outdated
Huffman says mandatory prevailing-wage laws are an example of obsolete and unnecessary government policies.
“A lot of these laws are vestiges of the way things used to work, when it was hard for people to get information from the government,” Huffman said. “There shouldn’t be this protected group of people who the government says [can] get more than these other folks.”
Greg Lawson, a policy analyst with The Buckeye Institute for Public Policy Solutions, says Huffman’s bill expands on successful prevailing-wage reforms Ohio enacted in 2001.
“When prevailing wage was prohibited on school construction projects using state dollars, there were significant cost savings, to the tune of nearly $488 million,” Lawson said.
Stresses It’s ‘Local Option’
Lawson says it’s important Huffman’s bill does not repeal prevailing-wage requirements altogether.
“The bill being discussed is a local-option bill,” Lawson said. “In other words, any community that wants to continue to pay prevailing wage can continue to do so. This merely gives local governments an option to not use prevailing wage if they choose to do so. It could be expected that there would be real savings for each and every community that embraces this. Again, it is important to be clear this is fully optional.”