As lawmakers in West Virginia prepare the next phase in their push to repeal the prevailing wage, a report has been released showing that doing so would harm an economy still recovering from the Great Recession. In their report, West Virginia’s Prevailing Wage: Good for Business, Good for Workers, the West Virginia Center on Budget and Policy argues that lawmakers seeking a repeal of the prevailing wage are “trying to solve a problem that doesn’t exist.” The report shows that the state’s construction costs are already lower than its neighboring states, including Virginia which does not have a prevailing wage law on the books.
Costs, rather, could rise if fly-by-night, out-of-state contractors begin to win public works contracts in a post-prevailing wage era. The construction industry would not be alone in taking the hit, though the state’s highly trained tradesmen and women would see their wages plummet. This would push a state which already sees 17.9% of its inhabitants living below the poverty line (2.5% above the national average) even deeper into the red in terms of reliance on government programs such as food stamps.
Prevailing wage repeal would also cause the communities surrounding public works projects to lose money since out-of-state workers would not be able to spend their paltry earnings locally when they split for home. According to Sean O’Leary, fiscal policy analyst at the West Virginia Center on Budget and Policy and author of the report:
“The evidence clearly shows that West Virginia’s prevailing wage law is not only a good deal for the state’s construction workers, but for the taxpayers as well. When it comes to public construction, you get what you pay for. Research consistently shows any hypothetical cost savings from paying lower wages is lost to lower productivity.”
Other key findings from the report include:
• Multiple academic studies have shown that prevailing wage laws do not raise public construction costs; instead the impact of higher wages on costs is compensated by the positive effect on productivity.
• West Virginia’s school construction costs are lower than its surrounding states, including Virginia, which does not have a prevailing wage law and Ohio, which exempts school construction from its prevailing wage law.
• Claims by opponents about the costs of West Virginia’s prevailing wage law are implausible and based on hypothetical assumptions, ignoring actual experience, evidence and data.
• Construction workers in West Virginia work an average of 1,760 hours per year. Using wage rates from the Occupational and Employment Statistics data rather than the current prevailing wage rates would result in poverty-level incomes for many construction occupations.
• The repeal of prevailing wage laws leads to less workforce training, less experience in the workforce, higher injury rates, lower health and pension coverage, and lower wages.
West Virginia Republicans, with unprecedented power following the 2014 election, put SB 361 in motion, which would completely repeal the state’s prevailing wage laws. Senate President Bill Cole (R-Mercer) has slyly referred to the bill as a “fairness to taxpayers act.”
But Democrats are showing signs of life on the issue. Senate Minority Leader Jeff Kessler (D-Marshall) has voiced his opposition to the press. He sees the issue clearly, telling the Business Journal, “That is wrong for the businesses of this state; that is wrong for the people of this state. It’s the wrong thing to do.”
