Indiana Takes Hatchet to Middle Class Incomes

Indiana construction workers protesting at the State House.

A bill to repeal an 80-year-old Indiana law is on Governor Mike Pence's desk. He has promised to sign the bill into law.

what eye thynk:  Supporting a poverty level minimum wage is no longer enough for the Republicans of Indiana.  Now they want to reduce some middle class incomes. 

The law now facing repeal sets a base for rate of pay for all contractors bidding on public construction projects valued at more than $350,000.  Opponents argued that repealing the law will allow non-union contractors to pay wages below union scale and open the opportunity for low-paying, out-of-state contractors to take jobs away from Indiana workers.  The original "common wage" law was passed in 1930 specifically to prevent this from happening.

Union contractors said the repeal would force many of them to close, which would leave their workers unemployed.

Governor Pence claimed that the state board charged with setting the common wage rate, set the standard "artificially high." Listening to Mr. Pence would make you think Indiana's construction workers are robbing the state blind; but the truth is that the average yearly wage in the industry is $60,000. 

State Representative Chuck Moseley (D) argued, "If you really believe lowering wages in your community is what people sent you here to do, then vote for this bill." 

Supporters of the repeal quoted Governor Pence who said allowing contractors to pay reduce wages could lower the cost of public building projects by as much as 20 percent. State contractors answered that their labor costs generally run between 17 and 23 percent.  In order to reduce their bids by 20 percent, they would need employees willing to work for free.  Republican lawmakers admitted the savings would probably be less, but that any savings was good for the state budget.

Not surprisingly, the repeal was supported by out of state groups.  The Koch brothers' Americans for Prosperity, (I note the irony), bought radio ads in support of repealing the law.

The editorial board at The Times of Northwest Indiana wrote: "Maintaining the common wage is common sense.  Keep jobs here, and keep wages high enough to stimulate the economy."

But common sense is not part of the Republican DNA.  Lower wages will see Indiana collect less in income tax.  Contractors closing will see more people unemployed.  Ex-workers will no longer have money to spend at local small businesses; those businesses, facing reduced income, will look to lay off their own employees, creating even more unemployed who will spend less at their own local small businesses, and on and on and on...  It's a shining example of GOP-branded trickle down poverty.

South Bend Mayor Pete Buttigieg (D) had hoped the repeal would be written to allow cities and counties to protect their economies by continuing to use the common wage for local building projects.  That amendment was voted down in the state Senate.

The entire Republican philosophy here seems to be that the middle class must give back to the state by relinquishing their living wage job. Once again, there is no sign that wealthy business owners who collect large personal profits on the backs of minimum wage workers will be asked to make the same sacrifice.

"I'm very disappointed," said Senator John Broden (D).  "Indiana is now 38th out of the 50 states in per capita income.  This change in law just expedites the race to the bottom."

The GOP talks about helping the middle class and being concerned about income inequality; but there is little evidence that their real agenda goes beyond worshiping the wealthy and despising the poor.