State lawmakers in Harrisburg changed a wage law in the name of saving public entities money on construction projects, but Temple officials said the university won’t see much of a change.
Having not changed since 1961, the prevailing wage was the regular industry wage at the time depending on the construction trade, as dictated by the Pennsylvania Department of Labor and Industry as well as Bureau of Labor Law Compliance, required on projects that cost more than $25,000. Signed into law in November as part of the state transportation funding bill, the prevailing wage will now only be required on projects over $100,000.
The rhetoric of supporters for the bill’s passage said the point of this change was to allow public entities to cut down their production costs on projects by reducing construction wages. Temple, being a semi-publicly-funded institution, is required to follow the prevailing wage laws.
Jim Creedon, senior vice president of construction, facilities and operations, said that he doesn’t believe Temple contractors will trim their wages for cheaper production costs. He said that Temple is likely to keep wages at or above prevailing wage regardless of the project’s cost in interest of incentivizing the best in respective construction trades to work on Temple contracts.
“You get what you pay for,” Creedon said. “I know our usual contractors. I see a minimal to zero decrease in their wages for future contracts with us.”
Creedon also said he doesn’t see taking advantage of this to be economically beneficial. He explained that after other expenses such as construction materials and temporary utilities, wages make up a fraction of any sub-$100,000 project. This change would only save a small part of that fraction, he said, not noticeable enough to justify cutting wages.
The change in state prevailing wage requirements came as part of a massive transportation funding bill that had been in the works for months. The bill included funding for public transit including SEPTA, more funding for bridges roads and highways, a raise in the tax on gas sales, a raise in traffic violation fines, a raised speed limit on to-be-determined highways and a future raise in driver license fees.
The loosening of wage requirements was argued by proponents to make transit network construction more affordable for public entities. They also argued that since the prevailing wage requirement formally required on projects exceeding $25,000 had not been adjusted since 1961, inflation had made the threshold outdated in today’s dollar value therefore requiring an adjustment.
Critics of the prevailing wage element of the bill feared the economic damage that allowing wage cuts could have.
According to Temple’s Vendor Report for Fiscal Year 2012, a large amount of contracts were made with construction companies with price tags ranging from $2,000 to $12,068,788.
Four of these contractors did not respond to interview requests from The Temple News by the time of press.
Additionally, the Department of Labor and Industry did not return multiple inquiries from The Temple News.
The prevailing wage threshold will reportedly not change much on the state level as well. According to the Pittsburgh Post-Gazette, only a fraction of projects by the Pennsylvania Department of Transportation are under $100,000.
Although Temple is unlikely to see a change in construction expenditures, additional state funding for SEPTA and roads will affect the Philadelphia area, according to Gov. Tom Corbett. “There is barely a spot in Pennsylvania…that will not see an improvement because of this legislation,” Corbett said in a speech in Spring Mills, Pa.
Marcus McCarthy can be reached at firstname.lastname@example.org or follow on Twitter @marcusmccarthy6.