A Boost for Prevailing Wages in Ohio

Strong, healthy communities are built by workers who are paid fair wages for their labor. In Ohio, the administration of Governor Strickland will see to it that this occurs on more projects in which public money is involved.

Strickland reportedly will soon mandate wider application of the state’s prevailing wage rule. A recently circulated Department of Commerce memo indicates that the state will require prevailing wages on privately funded projects that also involve partial public funding. This interpretation of the Ohio’s Little Davis-Bacon Act could indicate big changes for wage treatment of almost all subsidized development in the state. According to a spokesperson for the governor, the directive, originally slated for a Labor Day announcement, will be released soon thereafter.

In addition to the Davis-Bacon Act, which applies prevailing wage to all federal development and subsidized construction in the District of Columbia, 34 states have their own Little Davis-Bacon Acts. However, only a handful of states apply prevailing wage rules to projects involving economic development subsidies. Expansion of the laws to economic development financing tools tends to be politically divisive.

For an issue so mired in political partisanship, this is a bold move by Governor Strickland. Prevailing wage laws have been relentlessly attacked by their opponents since the passage of the Davis-Bacon Act in 1931. (Interestingly, Senator Davis and Representative Bacon were both Republicans and passed the Act through a Republican controlled Congress and Republican President Herbert Hoover.) Attacks on prevailing wage take many different forms, including attempts to directly repeal the laws, legislative proposals prohibiting prevailing wage on specific categories of construction projects, and non-enforcement of existing laws by adversarial administrations.

Ohio’s prevailing wage rule has weathered each of these attacks, but the Strickland Administration’s move could bring new controversy to the issue. An Ohio Department of Commerce memo obtained by Good Jobs First lays out a series of guidelines intended to clarify the application of prevailing wage rules. Common scenarios that will subject entire projects to prevailing wage include:

• publicly financed machinery or equipment in a newly constructed or remodeled private structure;
• infrastructure improvements on private land;
• remediation of environmental hazards for an identified end-user; and
• construction of multiple building projects in which only one building is subsidized.

The memo states that prevailing wage would be triggered when the funding comes in the form of bonds, grants, and loans but not by tax abatements, tax credits, or job training grants.

Happy Labor Day, Ohio!