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Chamber President, Local Physician Call for Prevailing Wage Law Change

gavel1 300MADISONVILLE (10/20/13) — In August, SurfKY published a letter to the editor written by Dr. William F. Smith, a Madisonville dermatologist and former member of the Hopkins County-Madisonville Public Library Board of Trustee.

Smith called into question what some have referred to as, "Kentucky's antiquated prevailing wage laws," which resulted in the library system being charged more than $97,000 in rates after an investigation by the Kentucky Labor Cabinet's Employment Standards Division into construction work at the library's East Center Street building.

Kentucky law (KRS 337.505 to 337.550) requires that public projects with an estimated cost of $250,000 or more pay construction workers the prevailing wage of the region in which the project is being built.

Smith questioned the basis of the prevailing wage law by its own control group foundation. In his letter, he alleged that determining wage data is collected and assessed at voluntary public hearings. The wage rates are established when 51 percent of the participating contractors are paid the same wage. "The majority of participants in these hearings are organized union workers, so the wage determinations consistently default to union wages, despite the fact that union workers comprise only a small minority of the work force," he wrote.

Dave Adkisson, president of the Kentucky Chamber of Commerce, offered the chamber's view on prevailing wage versus economic growth in an opinion piece recently shared with SurfKY.

Adkisson states the Labor Cabinet's method of determining prevailing wage does not reflect local construction wage. It is instead, "an inflated union wage," wrote Adkisson.

"The Kentucky Chamber strongly urges the General Assembly to repeal the state's prevailing wage law as it drafts the 2014-1016 budget," wrote Adkisson. "This move would save taxpayers millions of dollars every year; money that would be far better spent meeting the critical needs of our citizens especially educating our children."

Adkisson referred to a Legislative Research Commission report that concludes that labor costs are increased 17 to 24 percent per project due to the prevailing wage law, which affects projects like roads, school construction and renovation, bridges and public water and sewer construction.

Adkisson also called for Gov. Steve Beshear and members of the state legislature to "bring Kentucky's financial house in order," as preparations are being made for the state's 2014-2016 budget during the 2014 General Assembly, and, "to modernize the prevailing wage law by enacting recommendations from the LRS study ensuring prevailing wages established in a local community represent actual local wages."

Rita Smith Dukes
SurfKy News

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