$1.75 • © IBJ MEDIA 2013 CENTRAL INDIANA’S BUSINESS AUTHORITY VOL. 34 NO. 15 • OCTOBER 24-30, 2013

When we put local, experienced construction professionals to work and pay them fairly, we get higher-quality projects, a stronger middle class and vibrant local economies. Without common construction wage, not only does the local economy suffer, but so do state taxpayers when millions of state tax

• Common construction wage is a de-facto local preference law. It keeps out-of-state contractors from coming in and underbidding local contractors that contribute to their communities.

• Having a ready, local, highly-skilled workforce for projects is critical to finishing projects on time, on budget while keeping the work site safe. It’s much more effective to have a pool of high-skilled workers who do the job right the first time than to pay lower wages for workers who don’t have the right skills and can’t do the job at hand.

• Skilled workers on common construction wage jobs are 15% more productive than less-skilled workers and are key to contractors’ business models. This productivity enables contractors to do high-quality work quickly and move on to the next project, keeping them competitive.

COMMON CONSTRUCTION WAGE– RESPONSIBLE GOVERNMENT, SMART FOR BUSINESSCommon Construction Wage Protects Market Share and Labor Supply

• Construction workers in common construction wage states contribute 36% more in federal income taxes than workers in states without the law.

• In Indiana, common construction wage earners contribute $21 million to the state and local tax base.

• Better wages means a stronger and more fairly distributed tax base, helping policy makers balance budgets without raising taxes on businesses.

• Every dollar spent on a common construction wage project generates $1.50 in local economic activity.

• That’s money spent at local businesses such as restaurants, shopping malls, and grocery stores – spurring additional job creation that keeps local communities and businesses strong.

• Common construction wage jobs support 2,000 non-construction jobs in Indiana.

• Without common construction wage, Hoosier construction workers would see their wages reduced by $246 million. Businesses won’t locate to communities where the population can’t financially support them.

Common Construction Wage Protects Businesses from Corporate Tax Increases

Common Construction Wage Drives Economic Development

buildingstrongcommunities.org |

HOOSIER CONTRACTORS SUPPORT COMMON CONSTRUCTION WAGEOVER 4000

COMMON CONSTRUCTION WAGE. GOOD FOR BUSINESS. GOOD FOR TAXPAYERS.

dollars are shipped out of state. Risks of contractor non-performance and degraded quality increase, and depressed wages mean more full-time workers on public assistance — a tax increase on everyone else.

COMMON CONSTRUCTION WAGE FACTS

• Common construction wage was implemented by the Indiana Legislature at the request of contractors to keep jobs local. They were being undercut by out-of-state contractors bringing in low-wage, low-skilled workers from outside our communities.

• Common construction wage protects communities from unnecessary costs over the lifetime of a project. Allowing out-of-state contractors to lower local standards for construction wages attracts a lower skilled, out-of-area workforce resulting in large productivity losses on the construction project. These workers require more supervision and their work often needs additional review and repair before it can be deemed safe and secure. This is at the expense of taxpayers.

• Typical workers not paid the common construction wage are eligible for thousands of dollars in public assistance, which costs taxpayers for additional reliance on cash assistance, food stamps, and health care – tax payers don’t save, they subsidize.

• The common construction wage is the wage paid to construction workers on Indiana’s publicly fi nanced projects that cost over $350,000.

• These market rate wages are determined by a fi ve-member panel in each county that includes two taxpayers as well as a representative from the business sector, workforce, and the awarding agency.

• The panel votes on the wages to be paid on the public project based on the wages paid to construction workers in that county’s private sector.

COMMON CONSTRUCTION WAGE – A COMMON SENSE APPROACH TO PROTECTING HOOSIER CONTRACTORS AND LOCAL JOBS WHILE PROVIDING SAVINGS TO TAXPAYERS

Source: Census on Construction

• It gives taxpayers a voice and vote on how their tax dollars are spent to fi nance community projects.

• Common construction wage stops big government with big money from undercutting the wages common in local communities, which disrupts the local economy and the community’s standard of living.

• It controls costs while producing a quality product. Labor only makes up 23% of total building construction costs in Indiana. Reducing wages doesn’t produce any savings without paying workers illegally below minimum wage. However, productivity does drive the cost of construction. Skilled workers on common construction wage jobs are 15% more productive than less-skilled workers.

What is Common Construction Wage?

Why Common Construction Wage?

Construction LaborFringe Benefi tsAdmin LaborPower, Fuel, etc.DepreciationMaterials, ComponentsPurchased ServicesRental CostsProfi ts

43%

16%

7%

9%

8%2%

1%

2%12%

Barbara Kidwell, Corporate Secretary Treasurer, Avon, INAmerican Floor Covering, Inc.

Douglas P. Harrison, PresidentGibson-Lewis of Indianapolis, LLC

“We support current common construction wage laws because of the impact those wages have on our communities. It establishes a more level playing field for contractors such as ourselves to bid fairly on construction work. With established wages, the skilled trade employees earn stronger, more consistent wages to support their families.”

“When Indiana-based contractors like us pay fair, middle-class wages to our workers, we can retain skilled talent and keep tax dollars circulating in our own communities. Weakening or eliminating the common construction wage law encourages unscrupulous contractors, many from out of state, to enter our market and drive down standards that we have worked many years to establish.”

The 4,000 Hoosier contractors that support common construction wage spend $42 million a year on training Hoosiers for middle class careers.

Labor costs do not represent a big enough portion of total construction costs to generate savings.