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A pair of companion bills that would change how prevailing wage is calculated for public construction projects are under consideration during the 2021 Oregon legislative session.

Senate Bill 493 and House Bill 2419 would largely do away with regional surveys that currently are used to set prevailing wage and would instead mandate that collective bargaining agreements for each of the craft trades involved be used to determine prevailing wage across the state. Where more than one collective bargaining agreement exists in the state, an average of the wages set by those agreements would then determine the prevailing wage. The current wage surveys would be used only where no collective bargaining agreement exists for a given trade or occupation.

Public hearings have been held by both the House and Senate committees on business and labor, with the Senate committee voting 3-1 on March 9 to pass SB 493 to the Senate floor for consideration. HB 2419, meanwhile, was debated by the House committee on Feb. 10, but no further action has been taken.

Supporters of the bills include organized labor and trade associations. Officials are optimistic that SB 493, in particular, may have a fighting chance at passage.

鈥淚t is a positive sign,鈥� Professional Business Development Group (PBDG) Executive Director Kenechi Onyeagusi said following the Senate committee’s vote. 鈥淚 can tell you that I have conversations like this all the time where people will not bid on work if it’s not prevailing wage. It’s very important to us that prevailing wage is the standard, because what it does is allow smaller firms that might otherwise not be competitive to attract workforce.鈥�

The PBDG is a trade association that represents minority-owned, woman-owned and COBID (Certification Office for Business Inclusion and Diversity) certified contractors. These are precisely the types of firms that would benefit most from the proposed bill, Onyeagusi said. Such firms would then be able to recruit and retain skilled and experienced craftspeople, who in turn would help make those firms more competitive in the marketplace.

鈥淲hen you’re starting off a one-man firm, or with a couple of employees and you’re needing to attract workforce, having a job that pays prevailing wage, it’s a cost that the owner is ultimately agreeing to pay,鈥� she said. 鈥淭hat small firm is able to attract the same caliber of workers as a much larger firm. It levels the playing field in a way that not a lot of things do.鈥�

Matt Swanson, political director for the Pacific Northwest Regional Council of Carpenters, agreed. The legislation would aid contractors in rural communities across the state, he said.

鈥淲e feel really good about the prospects,鈥� he said. 鈥淲e’ve had a number of good conversations about making the rates less cumbersome and setting the prevailing wage rate in a way that’s more predictable.鈥�

A similar policy is already law in Washington, Swanson said, adding that fears of it significantly increasing public project costs appear to have been overblown.

鈥淚t’s been an ongoing issue in Oregon for some time,鈥� he said. 鈥淲e saw it pass in the state of Washington, and it really offers more stability in the wage rates. That’s good for public works and public employees.鈥�

Opponents of the two bills include the Oregon School Boards Association, the League of Oregon Cities and other organizations that represent public agencies. They say the bills could significantly raise labor costs.

鈥淲e are highly concerned that relying upon one collective bargaining agreement, which could reflect specialized work or unique project-based needs, could result in significant wage spikes and contribute to a lack of certainty for cities when planning and budgeting for public infrastructure investments, school capital construction projects and some affordable housing projects,鈥� Tracy Rutten Rainey, a lobbyist for the League of Oregon Cities, testified during the House committee hearing.

Washington’s policy has increased costs of public projects such as affordable housing, and generated litigation, Rainey and others say.

鈥淚f this bill passes and becomes effective, we expect wages to increase,鈥� Lori Sattenspiel, director of legislative services for the Oregon School Boards Association, said during the House committee hearing. 鈥淭hese eight districts going out for a bond now may find themselves short of funds to complete projects.鈥�

Robert Camarillo, executive secretary of the Oregon State Building and Construction Trades Council, said this stance could be the result of a lack of understanding of how prevailing wage works.

鈥淚 think a lot of them, from what I hear, they don’t understand the concept of prevailing wage,鈥� Camarillo said. 鈥淭he goal is never to increase the cost of projects. We’re all taxpayers, and we want to see our tax dollars spent responsibly.鈥�

Instead, Camarillo said, it is more likely that a higher prevailing wage will allow contractors to attract workers with a higher skill level, leading to a need for a smaller labor pool.

The current annual wage surveys fail to accurately measure wages across all trades, he added, because they do not capture the entirety of the projects being queried.

鈥淥ur concern is when the survey is done, we don’t know what phase of the project that survey will capture,鈥� he said. 鈥淚f we had all the crafts on the job all the time it might be a better snapshot. But to come in only those four weeks, we can’t get an accurate snapshot of the work being done that week.鈥�