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Kentucky Republicans Pass Right-To-Work, Dropping The Hammer On Unions

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By Dave Jamelson and Travis Waldron
01/07/2017 12:06 pm ET

Organized labor suffered its first major legislative setback due to the 2016 elections on Saturday, when Kentucky Republicans gave final approval to right-to-work legislation and repealed the state’s prevailing wage law. Both bills are expected to be signed into law by the governor, and will take effect immediately.

Kentucky is the last holdout in the South without an anti-union right-to-work law on the books. For decades, labor unions and Democrats fended off such measures, which diminish union membership and weaken the labor movement. But when Republicans captured the state House in November, they paved the way for passage of the legislation. The law will apply to all new labor contracts, but will not affect current agreements.

Unions and Democrats mounted a last-ditch effort to stop the legislation this week, holding protests at the state capitol building in Frankfort saying the bills would drive down wages. But Republicans now have overwhelming control of both the state Senate and the House. Kentucky’s governor, Matt Bevin, is a Republican who won office in 2015.

“They’re cutting workers’ pay,” Bill Finn, state director of the Kentucky State Building and Construction Trades Council, told The Huffington Post this week. “People voted for a change in this election, but they didn’t vote for this. They didn’t vote for pay cuts.”

Right-to-work laws forbid contracts that require all workers in a particular bargaining unit to pay fees to a union. Under U.S. labor law, a union must represent all employees in a unionized workplace, even those who may not want representation. Unions argue it’s only fair that all workers share the costs of bargaining and maintaining the union contract.

By allowing individual workers to opt out of paying union fees while benefiting from representation ― an arrangement unions call “free riding” ― right-to-work laws can drive down membership and weaken unions financially and politically. The conservatives who push right-to-work laws argue that they assure workers’ individual freedoms by not compelling anyone to support a union.

Labor leaders were equally troubled by the legislature’s move to gut the state’s prevailing wage law. Such laws require that employers pay certain minimum wages on work funded by public money. Backers of the laws say they help make sure companies accepting taxpayer dollars don’t drive down wages and working conditions. Opponents argue they inflate the cost of public works projects.

The repeal means prevailing wages will no longer apply to construction workers building schools and government buildings.

Charlie Essex, the financial secretary for Local 369 of the International Brotherhood of Electrical Workers in Louisville, called the measure “an attack on union people.” He estimated that the prevailing wage law applied to more than 30 percent of union construction work in Kentucky.

Backed by business lobbies, Republican lawmakers around the country have been aggressive in pushing right-to-work bills and prevailing wage repeals in recent years. When Democrats lose control of a statehouse chamber or the governor’s mansion, they are often powerless to stop them.

Long confined to the South and West, right-to-work proponents have recently made inroads elsewhere in the country, including even the industrial Midwest. Since 2012, Indiana, Michigan, Wisconsin and West Virginia have all gone right-to-work. Kentucky will be the 27th such state, making it more the norm than the exception around the country.

Class representative addresses crowd at graduation banquet

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Jerome Stanford completed the apprenticeship program with hundreds of others from Indiana and Kentucky and were honored with a completion ceremony in December 2015. As the selected speaker to represent the graudation class, Jerome addressed the members and guests that night.

2015 Indiana/Kentucky/Ohio Regional Council of Carpenters Graduation featured speaker, Jerome Stanford – Indianapolis from IKORCC on Vimeo.

Why should politics matter to you?

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American workers have felt a slow decline in their wages since the early 1980s, meaning wage increases have been slightly lower than the cost of living increase. This means less money for groceries, clothing, your children and the everyday essential you may need for raising a family or saving for retirement.

Union wages for the construction industry are no different, except unions have contracts that include wage increase, healthcare and retirement plans. With ongoing training programs for apprentices and journeymen this allows the workers to be more skilled than the nonunion workers. Productivity levels are higher, accidents are lower, and attitudes on job sites are more positive than ever before because of the investments in training by the members and their union. These union contracts are agreements between Labor and Contractors. The more highly skilled workers usually result in better wages, better working conditions and better benefits for their family.

On the other hand, payroll fraud is spreading rampant through the construction industry. This is where unscrupulous nonunion contractors choose to hire hourly workers and pay them cash or as independent contractors (1099s) by not withholding the employee’s state or federal tax deductions, FICA withholdings and Medicare deductions, leaving this responsibility on the workers to pay.

Learn more about payroll fraud

Who are my legislators in Kentucky?

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The Kentucky Legislative Research Commision provides a map to reveal the elected officials in your area. You can use the search by address at the top or select your location. By clicking on his/her bio page, you can find contact information including phone, email and mailing adress. We encourage everyone to reach out to your elected officials regarding issues of concern.

Prevailing Wage Controls Costs

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A study of 3 states – including Kentucky – found no meaningful cost difference on school construction comparing states with and without prevailing wage.*

Why do the costs not go up with prevailing wage?

  • Labor only makes up 21% of total building construction costs in Kentucky. 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 prevailing wage jobs are 15% more productive than less-skilled workers.
  • Kentucky taxpayers get better project quality and self-sustaining jobs at no additional cost to the taxpayer. Lowering local standards for construction wages attracts a lower skilled, out-of-area workforce which results in large productivity losses, costly errors on the construction project, inefficient use of expensive materials and fewer jobs for Kentuckians.

*Kentucky’s Prevailing Wage Law, Phillips, P., 2014.

Carpenter’s Union Training Facility Offers Hands-On Apprenticeship Program

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LOUISVILLE, Ky. – Gaining access to an affordable education and a hands-on, in-the-field apprenticeship have been made possible through the Indiana/Kentucky/Ohio Regional Council of Carpenters (IKORCC) Training Center in Louisville.

Out of the approximate 35,000 IKORCC members throughout the three-state span, 5,000 millwrights, carpenters and floor coverers live and work in Kentucky, and the Louisville Training Center is home to nearly 500 apprentices working in the field.

The 100,000 square foot training center – recently visited by elected Kentucky representatives and senators on a tour that was led by instructor Hope Harp – offers a four-year apprenticeship program where students spend a minimal amount of time in the classroom – they are required to attend week-long classes four times per year – and a bulk of their time being trained and mentored by experienced journeypersons on job sites. While on the job, students are compensated for their work.

Out-of-pocket expenses for the students are also kept to a minimum, averaging about $100 annually for text books.

Apprentices in carpentry, millwright work and floor covering who complete the four-year program graduate with an associate’s degree in Applied Science from Ivy Tech State College, an education valued around $17,000, and hit the ground running with a career as a journeyman.

Graduates can further their education by pursuing a bachelor’s degree through an established educational facility with an apprenticeship program. Other graduates have obtained high-level and advanced manufacturing positions at Fortune 500 companies, including Ford and GE.

“Apprentices are the future of our industry, and it’s so important they have access to the right resources and education,” commented Richard Fouts, Senior Manager of the IKORCC. “The Louisville Training Center apprenticeship program is a one-of-a-kind program that offers students an invaluable experience that couldn’t be taught in the classroom. We’re starting to notice a deficit in the workforce due to older generation retiring or leaving, and projects that used to take 12 weeks are taking 20 weeks to complete. That’s why it’s so important to educate the younger generation and provide them with the tools necessary to succeed.”

Individuals seeking to become an apprentice through the Louisville Training Center program are required to have a high school diploma or GED and must pass a written exam distributed by the Kentucky Community and Technical College System (KCTCS) and interview at the training facility. For direct access into the program, veterans can go through the Helmets to Hardhats program. The Training Center also recruits through various minority organizations, including the Bridges to Opportunities Workforce Training Program, the Youthbuild Louisville Program, Job Corps and SkillsUSA Kentucky.

The training center also offers continuing education for current IKORCC members seeking to improve skills and abilities.

For more information, please contact the IKORCC Louisville Campus, 1245 Durrett Lane, 502.375.8667, email info@ikorcc.com or visit www.IKORCC.com.

Prevailing Wage Protects Kentucky’s Taxpayers

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Construction workers in Kentucky contribute $20 million to state and local taxes. This allows policy makers to balance budgets and fund infrastructure and public safety without raising taxes on everyone else.

However, workers NOT paid prevailing wage are eligible for up to $8,000 in public assistance, which costs taxpayers for additional reliance on cash assistance, food stamps and unpaid visits to the emergency room. Taxpayers don’t save without prevailing wage, they SUBSIDIZE low-wage jobs.

Prevailing wage is the wage paid to skilled construction workers on publicly funded projects estimated to cost more than $250,000. The wages are set by Kentucky’s Labor Cabinet based on what construction workers in the area make on private sector projects. This forces big government to abide by local private sector economies.

[i]  Kentucky’s Prevailing Wage Law, an Economic Impact Analysis, Peter Philips, Ph.D., 2014.
[ii]  Economic Policy Brief, Working Partnerships USA, 2011.

Prevailing Wage Drives Kentucky’s Economic Development

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Every dollar spent on a prevailing wage project generates $1.50 in economic activity – that’s money spent at local businesses such as restaurants, shops and grocery stores – spurring additional job creation that keeps local businesses and economies strong.

In fact, the economic activity generated by prevailing wage projects supports 2,643 non-construction jobs in Kentucky!

Prevailing wage is the wage paid to skilled construction workers on publicly funded projects estimated to cost more than $250,000. The wages are set by Kentucky’s Labor Cabinet based on what construction workers in the area make on private sector projects. This forces big government to abide by local private sector economies.