Amber Gunn of the Evergreen Freedom Foundation wrote (TNT, 2-22) that the repeal of prevailing wages on public works projects would somehow fill the state’s budget gap by lowering wages. Nothing could be further from the truth.
The first prevailing-wage law was enacted in 1891 by the Kansas Legislature as part of an effort by Republicans to address the social costs of 10- to 12-hour work days, child labor and downward wage pressure. The federal Davis-Bacon Act, so named for the two Republican co-sponsors, was enacted in 1931.
The idea is that the government, as a major buyer in the construction market, should not drive down wages. Indeed, the reformers who pushed for prevailing-wage laws believed that government should use its buying power to enhance the welfare of workers.
The prevailing wage is based on the wage rate paid to at least 50 percent of the workers in a construction trade for an area. If there is no single rate for at least 50 percent of the workers in that trade, the prevailing wage is an average of the rates paid in the area.
In other words, the market drives the rate. Perhaps the EFF wishes the market to work only for the wealthy.
Contrary to Gunn’s assertions, several studies have found that prevailing wages have no effect one way or the other on the costs of public works projects.
• In 2003, a 50-state study of school construction from 1991 to 1999 shows prevailing wage laws were found to have no significant effect on school construction.
• A study over a 14-year period by the Construction Labor Research Council shows highway construction has lower total costs in high-wage (prevailing wage) states then low-wage (non-prevailing wage) states per mile. Total costs per mile in high-wage states: $1,017,922. Total costs per mile in low-wage states: $1,141,049. That’s a difference of $123,057 per mile despite the averaged wage of $17.64 per hour in the high-wage states compared to $9.21 per hour in the low-wage states.
• A study commissioned for the New Mexico Legislature and performed by Professor Peter Phillips of the University of Utah shows that once data are disaggregated by building type, construction costs for public works in nine Southwest and Intermountain states were $6 less per square foot in the prevailing-wage states. Five of the states had prevailing-wage protections, four did not.
And what about the social costs of doing away with prevailing-wage standards? Several studies show a decrease in apprenticeship training, loss of worker earnings, loss of sales taxes, increases of occupational injuries, and increases in cost overruns and building maintenance costs after construction.
Do we really want to lose earnings, lose tax revenue and then increase costs in these times?
Construction is a complex industry, and a building project is a complex task. Costs include not just the skilled-craft workers but designers, engineers, architects, materials, etc. Craft wages constitute only 20 to 30 percent of construction costs. Skill and productivity have a larger impact on costs than wages.
The taxpayers of Washington have been well-served by prevailing wage: a strong apprenticeship system, workers’ compensation that actually pays injured workers, a vibrant local construction industry and a community of highly skilled, well-paid craft workers who live and pay taxes here. This is economic development in its best form.
The Evergreen Freedom Foundation could better use its resources in combating the underground economy, finding out-of-state contractors who cheat on their taxes – thereby impacting law-abiding local companies – or blowing the whistle on corporate welfare. But I won’t hold my breath.
Mark P. Martinez of Tacoma is the executive secretary of the Pierce County Building & Construction Trades Council, AFL-CIO. He has worked in construction for 32 years.
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