A brewing fight over government-set wages for taxpayer-funded construction projects in Indiana could put Gov. Mike Pence in the spotlight just as the 2016 presidential race is heating up.
A state House committee passed a bill Tuesday to repeal Indiana’s common construction wage statute, first passed in 1935. With only 24 hours notice of the committee hearing, around 100 union protesters arrived to denounce the bill, foreshadowing a bruising fight similar to that which put Wisconsin Gov. Scott Walker (R-WI) on the map as a national leader.
Free-market advocates point to studies showing that “prevailing” wage laws such as Indiana’s cost state governments hundreds of millions of dollars a year over the cost of paying market wages for workers.
“Common construction wage in Indiana is essentially a government-mandated wage that leaves taxpayers paying much more than necessary,” said Chase Downham, the Indiana state director for Americans for Prosperity, a free-market advocacy group that is pushing the bill. “Other folks are trying to make this about union vs. non-union, for us this is really about taxpayers,” he added.
But the unions are unlikely to back down without a major fight.
Former Indiana Gov. Mitch Daniels (R) signed a right-to-work law in 2012, something that Pence has championed since taking helm of the state. And Indiana has also made news on school choice initiatives.
In that sense, the common construction wages represents the last low-hanging fruit for limited government advocates in a fairly red state that voted for Barack Obama in 2008 but flipped back to Mitt Romney in 2012 by more than ten points.
Tuesday, as the bill to repeal the government-set wages was advancing in the state legislature, Pence told reporters at a press conference he “absolutely” supports it, adding that the bill “would save taxpayers millions of dollars and ease the burden on cash-strapped local governments and schools.”
The House speaker, Brian Bosma, has also endorsed it, but passage in the state senate remains in question, despite GOP control, Indiana sources say.
Downham, who testified on behalf of the bill Tuesday, noted in his remarks that several studies have demonstrated the cost of the prevailing wage regime is in the hundreds of millions of dollars per year for state governments.
One study, in Ohio, found the state saved $500 million in five years after repealing its wage law, while a Michigan study pegged the cost at $224 million per year for that state.
Politically, a messy fight in Indiana could play well for Pence nationally, if he can pull out the win. Although he’s had some negative headlines recently over Common Core and a short-lived state journalism project, he’s generally a respected conservative, and a union fight could help him develop a national profile.