Prevailed Wage Law - Frank Manzo

On today’s episode I speak with Frank Manzo from the Illinois Economic Policy Institute. 

We will start our conversation by understanding how Frank teamed up with academics at Oregon State University to co-author his report on the effect Prevailed Wage laws have on taxpayer funded construction projects in the state of Oregon.    

We will then look into some of the falsehoods that circulate around prevailed wage projects as we uncover the fact-based truths that empirical data and research can provide.

Later we’ll unpack how employing skilled labor that is paid a livable wage, not only, does not raise construction cost, but can actually work to lower the cost of building projects while creating strong ties and advancement opportunities within the local community.

And we will finish our conversation when Frank shares his thoughts as to how apprenticeship programs are crucial in bridging the ever-widening skills gap that is growing in our nation.

This episode shines a light on many of the misconceptions about what paying skilled trades professionals a fair wage and benefits can mean. 

It also addresses the importance of awareness and understanding that carpenters must have when electing state officials who make career enhancing or ending decisions, such as Prevailed Wage and Right to Work laws.

The Show Notes

Illinois Economic policy Institute
https://illinoisepi.org/

NW Labor Press Article on Oregon Prevailed Wage Jobs
https://nwlaborpress.org/2021/01/oregons-prevailing-wage-law-investigated/

Union Home Plus
Union Home Plus helps union members save money when they buy, sell, or finance their home.

Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.

Transcript

Joe Cadwell: 0:08

Welcome to Grit Northwest. I'm Joe Cadwell, the writer, producer and host of the show. Now on today's episode I will be speaking with Frank Manzo from the Illinois Economic Policy Institute. start our conversation by understanding how Frank teamed up with the academics at Oregon State University to co author his report on the effect prevailed wage laws have on taxpayer funded construction projects in the state of Oregon. Well then look into some of the falsehoods that circulate around prevailing wage projects as we uncover the fact based truce that only empirical data and in depth research can provide. Later, we'll unpack how employing skilled labor that is paid a livable wage not only does not raise construction costs, actually work to lower the cost of building projects while creating strong ties and advancement opportunities within the local community. Well then investigate how states with no prevailing wage laws stack up in comparison with Oregon. And we'll finish our conversation when Frank shares his thoughts on apprenticeship programs, and why he feels they are so crucial on bridging the ever widening skills gap that is growing in our nation. This episode addresses the importance of why carpenters need to develop an understanding of wage law, and why it is so important to take that knowledge to the polls when electing state officials who make career enhancing or ending decisions such as prevailed wage and right to work laws. This episode also attempts to explain why the unlikely pairing of politics and the construction industry makes such a difference in the lives of the working middle class of our nation. Be sure to check out the show notes after the episode learn more about what prevailed wage laws are and how important they can be in our continued efforts as union carpenters to be able to provide for ourselves and our families. And now on to the show.

Frank Manzo: 1:55

Frank Manzo, welcome to the show. Thank you for having me, Joe. Hey, thank you so much for taking your time to be on the show. I understand you are zooming in from Illinois. And I first came across you Frank by looking at the an article that you were mentioned in with the Northwest labor press, in which you talked about Oregon's prevailed wage law. How did you become interested in study for Oregon when you're actually living in Illinois? So that's a great question there, Joe? And the answer is that my organization, we specialize in the construction industry. And so since 2013, I have authored or co authored nearly 40 reports very specific to state prevailing wage laws just those last eight years. And we conduct research with PhD economists and academics from across the nation, including professors from my home state and University of Illinois, to the University of Utah, Colorado State University, and now the University of Oregon. So I teamed up with the University of Oregon instructor, Lena sepik, to release a study on the state's prevailing wage law.

Joe Cadwell: 3:02

And when you talk about your organization that is the Illinois Economic Policy Institute.

Frank Manzo: 3:08

Yeah, great, Joe. We're, I'm the policy director for the Illinois Economic Policy Institute. And we are a nonprofit research organization that promotes thoughtful economic growth for businesses and working families. And our reports, as I mentioned, are often co authored with professors like this one from the University of Oregon. And we do this to ensure sound credible analyses that can withstand public scrutiny on major policy issues. So that's our organization, our bread and butter is construction. And so that's how we got connected with Dr. sepik at the University of Oregon. Oh, that's excellent. And you went in particularly, to look at prevailed wage law and how it affects project cost and workers wages in the state of Oregon. What did your research fun, right? Yeah, it's a great question. The research itself, which is grounded in the data shows that a strong Oregon is built locally with highly trained workers. prevailing wage itself levels, the playing field for local contractors, increases competition on public projects by 19%. Expands apprenticeship training that can help resolve labor or worker shortages that you often hear about and delivers pathways into the middle class by boosting construction worker wages by as much as 8%. That's all great and it's all positive impacts. And some people wonder, well, what are the costs, and we find that the real wage has no net costs on taxpayers on publicly funded projects. So prevailing wage provides great value for taxpayers. And as a result, prevailing wage builds quality infrastructure and strong communities across Oregon.

Joe Cadwell: 4:53

So knowing what a good deal prevailed wage is for communities and for workers. Why do you think Frank that prevailed wage laws on the the state and federal level have been under attack since the 40s.

Frank Manzo: 5:09

That's a very great question and, you know, in multiple states through the 2010s weekend or unfortunately repealed their prevailing wage laws, and many of those states are in my backyard in the Midwest here. And so that's one of the reasons we got acquainted with those very quickly. In the 2010s. Lawmakers in those states, their purported or stated reason for weakening or repealing prevailing wage was that prevailing wage somehow it kind of artificially inflates costs on taxpayer funded construction projects. And so they would say, well, look at these union guys over here, they're making 40 bucks an hour, but I got a non union guy and the average wage, it can be $20 an hour. So this is a, you know, it's two times more expensive. And so just by that nature, the project has to be cheaper if we get rid of prevailing wage. But the research does not show that the research, if you don't mind me going on and talking a little bit about it. Now the prevailing wage stabilizes construction costs. And so since 2,083%, of the peer reviewed academic studies have concluded that prevailing wage laws have no impact on public construction costs.

Joe Cadwell: 6:19

Well, that's fantastic. And again, I think it comes down to the old adage that skilled labor isn't cheap and cheap labor isn't skilled at something that is easy to, to put on a hardhat sticker, and it's it, but it sounds like it holds a lot of truth, according to the research. And when you do this type of research, what word exactly do you start?

Frank Manzo: 6:39

That's a great question. And I want to actually touch on the first thing you mentioned, and the old adage, and because that's the deal that I have found is most important to mention to not only the public but to lawmakers. Construction is not low skilled work. You know, on average, in Oregon, an apprentice must go through about 7000 hours of on the job training. And that's more hours than what's required to graduate from state universities. So in particular, the joint labor management, apprenticeship programs and construction, which by the way, train know six out of every 10 construction apprentices in the state. They deliver training hours, competitive earnings and diversity outcomes that rival the performance of public four year university. So that was an important point that you may not want to kind of elaborate on it with what the the data that we had in the report. You know, it's important that registered apprenticeship programs are the bachelor's degrees of the construction industry. And folks need to kind of be aware of that.

Joe Cadwell: 7:40

Well, I agree wholeheartedly as an apprentice coordinator with the Pacific Northwest carpenters Institute, one of our regional training centers here in the Northwest, for the United Brotherhood of Carpenters and Joiners of America. I can attest that, yeah, those apprentices, they are worked in that four year construction College, both out in the field, 90% of their training comes out in the field under the tutelage of a skill journey level worker, and then they have approximately 10% of the the academic hours in house but they they earn that degree they earn that that wage those benefits, so safer working conditions, the representation, the pension, and nothing is given away. So I'm wholeheartedly in favor of hearing what you're saying. And again, how did they how does the research take place?

Frank Manzo: 8:28

Yeah, so I apologize for that. The side note there, Joe, but but I'll go ahead and tell you that there's there's a lot of ways to just study a prevailing wage law. But what we did is we compare the economic and construction industry outcomes in Oregon, with their with neighboring states, in particular, Washington and Idaho. We use census data to evaluate things like income and health care and poverty between over the last decade essentially. And then when we also have nearly 300 highway projects in Oregon, and Idaho, between 2018 and 2020. So kind of a three year period where we have 300 highway projects in those two states. And in a nutshell, what we do is we compare these outcomes between Oregon and Idaho in particular, Idaho does not have a state prevailing wage law and Oregon and at times, you know, Washington, Washington had a stronger prevailing wage law at the time we were studying this report or undertaking this study. So we control for other important factors. And that's important to note. There are many things that could influence how much a worker earns, you know, unfortunate things like race and gender have a role, you know, in every industry, not just construction, but we control for that. And after we control for that, we still see that Oregon's prevailing wage law boosts construction worker earnings by 8%, and even more for those at the lower end of the income scale. So that's how we approach it. It's kind of the the way economists often approach it, and it's something that, you know, withstands Public Schools

Joe Cadwell: 10:00

So in comparison in the states that don't have prevailed wage laws like our one of the states and our Regional Council Idaho, has there been research done to see what happens to production costs and these non prevailing wage states. Now quick break in the action for a word from our sponsor. Today's episode is brought to you by our friends over at Union Home Plus, union Home Plus has been in the business since 2002. Helping Northwest carpenter families just like yours, save money when they buy, sell, or finance their home. If you've been listening the show for a while, you've probably heard me talk with Patrick Towne, the director of operations over at Union Homeplus. Patrick and his team of finance or real estate professionals are dedicated to helping you make the right decisions with what many consider to be the cornerstone of the American Dream Homeownership. For more information, be sure to check out the show notes and today's episode, or visit union Home Plus dot o RG on the web union Home Plus helping Northwest carpenter families find their way home for nearly 20 years. And now back to the show.

Frank Manzo: 11:07

So certainly there is the first kind of cheap points in the in this research and it goes exactly back to what we had mentioned earlier on apprenticeship training. Because apprenticeship training and worker productivity is an important determinant of production costs. So the first kind of body of research is that prevailing wage attracts and develops skilled workers by including apprenticeship contributions in with labor costs. So the Economic Research shows that apprenticeship enrollments are up to 8% higher in states with prevailing wage standards versus states that do not have predominant edge. And Oregon is no different. So the story between Oregon and Idaho is that Oregon has 12 apprentices per 100 construction workers, so 12 apprentices for every 100 construction workers, and then that ratio is less than six in neighboring Idaho, right. So it's double the amount of apprentices relative to the size of the industry. And it's important to note that right now, we're in a situation where 57% of contractors in in Oregon, are reporting that they are having a hard time filling craft worker positions. prevailing wage is an important safeguard by promoting investment in apprenticeship training, and encouraging skilled young workers to enter the trades. So that's the first kind of body of research research on the first kind of step in how you might often measure production costs.

Joe Cadwell: 12:29

Yeah, that's for sure there is definitely a widening skills gap out there, the demographics are showing that a huge number of the baby boomer generation the Gen X generation are are retiring now. And then the demographic that fill in theirs is not necessarily wanting to step up and get their hands dirty as as you would imagine. And so that the skills gap is is ever widening. And we're talking about you know, prevailed wage, but Right to Work is kind of goes hand in hand with that. And again, our state over to the to the east of Oregon here, Idaho went right to work some years ago, and along with it came the the repeal of the prevailed wage law. And then the ever increasing race to the bottom it seems the cost in Idaho continued to go up. But the what our carpenters are making over there is unfortunately not keeping up because we just don't have the market share to be able to control the market and ask for those livable wages for our carpenters and it's unfortunate and like you say, then the the contractors can't compete, the the workers don't have the work and they find themselves moving over to Oregon and Idaho in order to I'm sorry, over to Oregon Washington state in order to do the work. And it's a it's a vicious cycle that continues to repeat.

Frank Manzo: 13:49

Yeah, Joe, you know, you mentioned the link between right to work laws and the repeal of prevailing wage. And that's, as I mentioned, these kind of especially the Midwestern states that in the past decade, went right to work or also the spacing of the same states that repealed their state prevailing wage laws. And I, I do want to, you know, turn your attention and point your listeners to another study that I that I really released in 2021, with the University of Illinois at Urbana Champaign, comparing states that have these so called right to work laws versus the free collective bargaining states, and on every single important economic, health and community metric that we look at Right to Work states do worse than the states that support collective bargaining and workers rights. And I'm talking about not only wages and health care, benefits and pension benefits, but things like life expectancy, consumer debt levels, civic participation, whether or not you even vote in an election. These things are, you know, states that support workers do better on every single metric. And you know, the other thing that's on and brought up as well don't these Right to Work states? Don't? Aren't they all growing much faster than than the states that support workers rights? And since 2010? The answer is no. Since 2010, collective bargaining states have grown 3% Faster than so called Right to Work states. So even that claim is wrong.

Joe Cadwell: 15:16

Right, I see that the state of West Virginia a few years ago, went went right to work and they're now paying people to move into the state. And because they just cannot find enough employment for these folks, even though the no one wants to work, longer hours or two jobs, three jobs in order to make ends meet. So people have actually left the state of West Virginia and now they're being encouraged to move back by bonus from the from the government. So with all of this said, how, where do you see the future of Right to Work and in prevailed wage laws in the country.

Frank Manzo: 15:55

Increased increasingly, states are struggling with the aftermath and consequences of these policy changes. So you mentioned West Virginia, and West Virginia's Governor Jim justice, a Republican recently admitted that right to work, and the repeal of prevailing wage laws did not attract workers and population to his state as they had promised. So he admitted that that didn't work. We have a state like Montana that the Republican controlled legislature voted against adopting a so called right to work law and voted against weakening or repealing their state prevailing wage law. And then we also have another Republican majority state where voters rejected right to work and that is Missouri in 2018. They rejected right to work by 67% voting no. So we have voters in a Republican majority state lawmakers and a Republican majority state and a governor of a Republican majority state all saying that, you know, this was a this is not what were we signed up for. I guess that's kind of what, how I might put that. So I think, and the research is increasingly showing that, you know, they're not mistaken. Whether it's this study here in Oregon, where we're looking at prevailing wage only, and we're seeing that, you know, blue collar construction worker wages increase with with state prevailing wage law, and we see that the economy is strengthened, where the state prevailing wage law, and I'm saying I shouldn't say the prevailing wage rate law is the official term for it in Oregon. That policy itself creates over 5000 jobs and boosts the economy by nearly a billion dollars per year, while also generating additional state and local tax revenues and keeping workers off government assistance programs. They data is very clear and is very consistent. I mentioned it earlier that a strong state, you know, XYZ state doesn't. It's true for every single state but a straw Morgan is built using local skilled workers.

Joe Cadwell: 17:58

And we recently passed a bill I believe it's on the governor's desk to be signed as we speak now in the beginning of June, that is going to further ensure that we keep prevailed wage law strong in the state of Oregon, the Bureau of Labor and Industry was doing a survey every other year, in order to gauge the amount of work that was being done, and really kind of skewed the numbers and made it very ineffectual for for labor unions to prevail in certain counties throughout the state. And we were successful, the carpenters union was successful in bringing a bill to the to Salem and getting that antiquated survey system replaced with something that's more reflective of current times and is definitely going to be a big win for the working class in the state of Oregon.

Frank Manzo: 18:47

So it's important you bring that up, Joe? And I agree with kind of with your assessment on what kind of the impact that the that the policy change will have on the state of Oregon. I think it is important to note and we I didn't say this from the outset, and maybe your listeners are well aware, but just to kind of define prevailing wage prevailing wage is a local minimum wage for skilled construction workers on public construction projects, you know, and it's based on what workers are actually earn in a community. The main purpose is to create a level playing field for contractors to ensure that taxpayer dollars are reflecting local standards of compensation and craftsmanship. And it's important in Oregon because Oregon has declared the purposes of its prevailing wage, great law. It's the only state that I'm aware of this, but it's the best definition I should say that is that I'm aware of for a state to say we have this law and here's why we have it. And the purposes that are had been declared are to promote competition that maintains community established compensation standards that pay family income and benefits and also encouraged training. Education of workers to Industry Skills standards. Some of those are quotes from from the from the law and the purposes but the new bill that would strengthen prevailing wage would attach the prevailing wage rates to collectively bargain rates that are privately negotiated between workers and their employers. And, you know, you talk to anyone about about collective bargaining rates and I, you'll be hard pressed to find so just not think that they reflect community established compensation standards, that they do not pay family income and benefits, and that they do not invest in apprenticeship training, because, in fact, they do all three of those. So by attaching it to collectively bargain rates, you're really living up to the purposes the stated purposes of the prevailing wage rate law.

Joe Cadwell: 20:50

That's for sure it it really is a win win for the for the workers and for the communities. And again, it's just an amazingly clever slogan, right to work and, and then the subsequent repeal of prevailed wage laws. But it is it is definitely Right to Work is wrong for workers and the repeal of those prevailing wage laws can can only hurt the people that live in the local communities. And you had mentioned Montana a little while ago, and I'd actually done a an earlier podcast on the battle for Big Sky Country. And, and then we we revisited with one of our council reps Derek hit in the efforts that were made by the organized labor unions in the state of Montana, to to send that message that that to the lawmakers there in Helena, that the working class would not be be pushed around by out of state corporate lobbyists that we're trying to force that right to work law through the bill through the House. And fortunately, the lawmakers in the state of Montana stood up for the working class and defeated that pretty handily. But that came right on the heels of losing some very labor friendly support that we had in both the the governor and the Senate seat back in 2020 20 of the elections. And so we've always got to be on the guard for sure. So, Frank, this has been a fantastic conversation, where can folks go to find out more about you and the Illinois Economic Policy Institute?

Frank Manzo: 22:16

So great question, Joe. The Illinois Economic Policy Institute has a website Facebook and Instagram and a Twitter account at this stage and also a LinkedIn account, if you want to connect with us on any of those platforms. But the way to connect with us is just either search Illinois Economic Policy Institute, Illinois epi.org. And we are Illinois epi on all platforms.

Joe Cadwell: 22:40

That's awesome. Well, thank you so much, Frank Manson, for taking your time to be on the show. I look forward to hopefully having you back again. It's really been fun.

Frank Manzo: 22:47

Yeah, thanks, Joe. Anytime happy to talk about anything construction worker related apprenticeship training, you name it, so we'd love to be back on.

Joe Cadwell: 22:56

My guest today has been Frank Manzo from the Illinois Economic Policy Institute. Find out more about prevailing wage law and the building trades Be sure to check out the show notes on your smart device or by visiting the Grit Northwest website at Build N W dot o RG forward slash podcast. Well, that wraps up this episode of Grit Northwest. If you know someone you think might benefit from this episode, please be sure to share it with them. If you haven't already joined the nation. What are you waiting for? Look for the link in the show notes or by visiting the website. You'll be eligible to win grits swag and an exclusive backstage access pass to get an even more in depth look into the shows making content. All this more when you join the grid nation. Thanks again for listening and until next time, this is Joe Cadwell reminding you to work safe, work smart and stay union strong