Wednesday, January 13, 2016

Schroder: Repealing the Prevailing Wage Requirement Will Lower Cost For School Construction

Tom Shelton, Executive Director of Kentucky Association of School Superintendents, testifying alongside Senator Wil Schroder on behalf of Senate Bill 9 before the Senate Standing Committee on Appropriations and Revenue (LRC/Public Information Photo).
By Wil Schroder

With another New Year comes a new, busy legislative session in the Kentucky General Assembly.  This week I have been focused on legislation that repeals the prevailing wage requirement for school districts.  The prevailing wage is the hourly base wage and fringe rate paid to workers and laborers when working on public works projects that are estimated to cost more than $250,000.

On Tuesday, I spoke before the Senate Appropriations and Revenue Committee on Senate Bill (SB) 9, which would eliminate the requirements to pay workers a regional prevailing wage on publicly funded school construction projects.  The bill, which is supported by the school superintendents across the Commonwealth, successfully passed through committee with only one “nay” vote.

Repealing the prevailing wage for construction of any elementary, secondary, or postsecondary education buildings and facilities is important for our entire Commonwealth, but it will also have a serious impact in my home region of Northern Kentucky.

SB 9 will help significantly reduce the cost of school construction. 


A recent Legislative Research Commission study found that prevailing wage requirements increased labor costs for a sample of school projects by 51 percent relative to what labor costs would have been if workers were paid the same rate they earn on private construction projects. The fiscal analysis of SB 9, prepared by Commission staff, indicates that exempting school construction from the prevailing wage would reduce elementary and secondary construction costs by approximately 7.9 percent.

While prevailing wage laws result in higher wages, they do not ensure that higher quality workers are hired.  Sixty percent of the workers on school projects sampled by staff were paid more on prevailing wage projects than they earned on private projects. However, in these cases, workers’ wages were increased without an equivalent increase in quality.  In fact, despite what the critics say, I have yet to see a study that shows that paying the prevailing wage will result in a better quality construction.

Also, SB 9 will allow school districts to build new schools and remodel existing schools without placing an additional financial burden on Kentucky taxpayers. Repealing the prevailing wage would also provide additional funding for other crucial needs, such as funding teachers’ salaries and addressing our pension shortfall.

The Commonwealth’s children deserve the best, and they deserve the best we can provide now.   By passing Senate Bill 9, we will allow more to be done for our students and teachers for a lower cost and with no change in the quality of the overall projects.

2 comments:

  1. The impact of this proposed legislation would be to enable contractors to pay their workers--lower wages. In other words schools could award contracts to "Wal-Mart" type contractors. At the same time some of the school building contractors would receive profits of about 15% to 20% as well as keeping architectural firm and bond firms the same at a state % of the contract price. --If you are going to cut workers wages there needs to consideration of cutting prime contractor profits and fees for services.

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  2. Race to the bottom in wages is bad for Kentuckians and bad for contractors. Is there something that indicates that wages are too high in Kentucky?

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