By John Spiegelhoff
Prevailing wage is the minimum hourly wage employers must pay certain workers who work on construction projects where state dollars are used to fund the construction. The prevailing wage includes the employer’s cost of benefits.
Prevailing wage is used in any construction project funded in whole or in part by federal or state funds. For example, state-funded projects can be projects to construct highways, roads, wastewater treatment plants, public utilities, colleges, schools or park and recreation improvements. The prevailing wage for these publically financed projects also varies from county to county or region to region.
The substantive question is why prevailing wage benefits our communities?
Companies must bid for publically financed contracts and be chosen to perform the work. Prevailing wage levels the playing field for companies to compete for the work and protects the public from unscrupulous business practices.
It creates government transparency, protects the public from shoddy work and prevents cost overruns.
For example, without prevailing wage, business X, could seriously underbid all the other competing businesses for a project. Rest assured, a low bid coupled without a prevailing wage law, would enable business X to cut corners, pay their workers substandard wage/benefits and create a deficient work product.
This, in turn, would lead to cost overruns (as a result of the company’s purposeful low bid) and the taxpayer picking up the tab for fixing up potential shoddy work product. The lack of a prevailing wage law equates to being poor stewards of the publics’ monies. There is an old adage that fits this situation-“You get what you pay for.”
Moreover, workers and communities would suffer if not for a prevailing wage law. Here is why:
- Workers would certainly be paid less for their labor since there would not be a minimum standard for wages.
- When workers aren’t paid family sustaining wages, they don’t spend as much and the economy doesn’t grow.
- A healthy economy entails putting more money in the hands of workers which equates to thriving communities.
- Currently, fringe benefits such as health insurance are factored into the prevailing wage. In the absence of a prevailing wage law, employers perhaps may not offer health insurance to workers potentially resulting in the public ultimately picking up health care costs of employees.
- Apprenticeship training currently paid for and provided by trade unions would decrease significantly increasing costs to the public. Furthermore, the decrease of quality apprenticeship programs would increase serious workplace injuries at the public cost.
- In states that have repealed prevailing wage, there was NO measurable cost savings on public construction.
Any politician who advocates for eliminating prevailing wage under the pretense that it saves the taxpayer money is sheer fallacy.
The prevailing wage law is good public policy, a good steward of the taxpayers’ dollar, good for workers and good for our communities.