By Sue Fernandez
ANNAPOLIS – Supporters of a bill to repeal the prevailing wage law, which has failed numerous times in the past, hope this year’s proposal will be pulled through by the pro-business fever in the Legislature.
The bill, which would get rid of the law that sets minimum wage standards for businesses who bid on state projects, was heard Wednesday before the Senate Finance Committee.
Last year, that committee killed the bill, as did the Economic Matters Committee in the House.
But advocates say the bill has a better chance in 1996 because lawmakers want to promote business and the governor has declared economic development one of his top three priorities.
“Gov. [Parris N.] Glendening has publicized that he wants to make the state of Maryland more business friendly, and the repeal of this law does make it more business friendly,” said Sen. John W. Derr, R-Frederick, a sponsor along with Sens. Martin G. Madden, R-Howard, and John C. Astle, D-Anne Arundel.
But Madden is concerned that the bill will meet its usual fate. “To the extent that the same people are in the seats, I’m not optimistic that it will get a favorable report,” he said of the committee.
The prevailing wage law is applied to all bids for state construction projects over $500,000 and at least 50 percent state funded, as well as to school construction projects that are at least 75 percent state funded.
The prevailing wage is determined by the state Department of Labor, Licensing and Regulation, which surveys contractors throughout the state to come up with different minimum wage rates for Maryland’s 23 counties and Baltimore City.
Madden and others who favor repeal say that the state would save money if businesses could hire employees for state projects using market wages, presumably submitting lower bids.
A Department of Fiscal Services report estimates that repeal would save between $15 million and $45 million next fiscal year in state construction project costs and between $7 million and $21.8 million in local project costs.
Madden also argued that repeal would create jobs by allowing the state to construct more projects. “It will mean a better job environment,” he told the committee.
But the bill’s opponents argue that getting rid of prevailing wage would encourage companies to hire cheap labor from out of state.
“We want a good-paying job environment,” said Bryan S. Coster, lobbyist for the Maryland State and D.C. Building and Construction Trades Council.
To support his argument, Coster referred to the well- publicized incident of last week, when a vanload of illegal immigrants from Mexico and Central America crashed on their way to work on the Eastern Shore.
Coster also said unions don’t always set wages under the current law, as is often assumed. He said only 28 percent of the state’s building construction jobs and 16 percent of school construction jobs pay at rates equal to local union scale, according to 1995 figures.
The prevailing wage law originated during the Depression as a way to end discrimination against blacks, said Del. Robert Kittleman, R-Howard, who has sponsored numerous past bills to repeal. Contractors would hire black workers from the south at extremely low wages, Kittleman said. But today, he added, the law is “just a subsidy paid by the state.” -30-
