‘Do You Think That’s Fair To Tax Payers?’: Smucker Slams Julie Su Over Increased Construction Costs

4 months ago

On Wednesday, Rep. Lloyd Smucker (R-PA) questioned Acting Labor Secretary Julie Su on the increased cost of federal construction projects during a House Education and Workforce Committee hearing.

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Transcript

00:00 which, of course, as you know, requires contractors that

00:03 perform work on Federal or Federally funded construction

00:07 projects to pay a government determined prevailing wage to

00:11 on-site construction workers. I myself, I worked in the

00:14 construction industry for 25 years, very proud to have been

00:18 part of an industry that creates great family sustaining, well

00:22 paid jobs. There's a lot of opportunities there.

00:26 I do know, though, artificially setting the wages will have an

00:30 impact on the cost of Federal projects, and I wondered if

00:33 you're aware of that.

00:35 Well, one thing I want to say about that, Congressman, is

00:41 that when workers are protected, when they're paid decent

00:49 wages, part of the principle -- I know you know this.

00:51 So do you think without Federal government setting wages, they

00:55 will not be paid decent wages?

00:57 Well, the goal of the Davis-Bacon related acts is to

01:01 ensure that Federally funded construction projects don't

01:04 depress local wages in the area where that work is being done.

01:09 But the other point I wanted to make is that I understand,

01:14 there are many studies that demonstrate this, that when

01:17 working people are paid prevailing wages and treated well,

01:22 that it actually ends up having cost savings on a project

01:25 because there's continuity.

01:26 That's certainly not borne out by the studies. In fact,

01:31 there's a nonpartisan Beacon Hill Institute estimates that

01:34 Davis-Bacon methodology increases Federal project costs by

01:39 7 percent, and I've seen that firsthand with Pennsylvania

01:43 prevailing wages. I've seen the additional cost. Do you think

01:47 that's fair to taxpayers at a time when construction costs are

01:52 increasing dramatically due to inflation? Do you think it's

01:56 fair at this time to add an additional cost to taxpayers?

02:00 Well, again, I think the reason why the laws are in place is

02:03 to make sure that Federally funded construction projects don't

02:06 depress wages in the area, and that's policy, but I also think

02:13 it's fair to make sure that doesn't happen.

02:15 So do you think the Federal government should set wages in

02:19 other areas as well?

02:20 Well, my role as the acting Labor Secretary is to enforce

02:26 provisions that Congress passes. So we have a Federal minimum

02:31 wage.

02:32 But this update came from the -- did not come from Congress.

02:36 In fact, we oppose it. We sent a letter. I sent a letter with

02:39 Chairwoman Fox opposing this change specifically because it

02:43 will increase Federal costs. This is not Congress that has

02:46 done this. This has come directly from the Biden

02:48 administration.

02:49 Well, so the rule was a Department of Labor rule, but the

02:53 basic principle that Federally funded construction projects

02:58 should be set at a prevailing wage so that it does not have a

03:01 negative effect on the wages in that area is part of the Davis

03:07 Bacon and related acts.

03:08 So why should the government set construction wages but not

03:13 nurses' wages, for instance?

03:17 So I think that is a question for Congress. I mean, if you

03:22 set nurses' wages at something, I would be enforcing those

03:25 wages as well.

03:26 Do you think the Federal government should set wages in

03:30 other sectors other than construction?

03:35 I think a basic wage floor beneath which nobody should be

03:40 forced to live and work is incredibly important.

03:43 But that's not what Davis Bacon is. This is not a minimum

03:45 wage. This is literally having the Federal government abandon

03:51 free market principles and set wages at some level. That's

03:57 what this is. This is a minimum wage.

03:59 I do want a very quick question on apprenticeships as well. I

04:02 know others have been talking about this. You have said you

04:08 want to cooperate with States. I just want to put in the record

04:12 that many States, not in a bipartisan manner, have talked

04:17 about these new regulations. For instance, Michigan, this is

04:22 a quote, said the new regulations and requirements will be an

04:25 added formidable burden to employees.

04:28 Connecticut said the rule would, quote, have a chilling

04:30 effect on employers entering apprenticeships. Your home

04:33 State of California said the rule does not clearly

04:36 demonstrate the evidence and value of adding another

04:38 component to a current CTE structure that can accomplish

04:41 many of the same intents without new constricting Federal

04:44 rules.

04:45 So I just want to express my concern, but also the concerns

04:49 of many States, where we will see less individuals involved in

04:54 apprenticeship programs. I think you and I do agree that

04:57 apprenticeships are a very great career path to a great job and

05:02 to a great career. But these regulations will not help to

05:05 allow more people to enter. It will have the opposite effect.

05:09 And I'm out of time.

05:10 Thank you, Mr. Chairman.

05:11 [The Chairman] The representative from Nexium, Ms.

05:17 Legra Fernandez, is recognized for five minutes.

05:19 [Ms. Legra Fernandez] Thank you. And thank you so much.

‘Do You Think That’s Fair To Tax Payers?’: Smucker Slams Julie Su Over Increased Construction Costs

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