Guest column: Prevailing wages increase costs, not quality

By John Mullin

Bob Emery’s column last week touched on several liberal, or as liberals prefer to be called, “progressive” ideas. His primary focus was prevailing wage, so let’s start there. The column recited all the liberal prevailing wage talking points, claiming that paying prevailing wage avoids “fly-by-night contractors,” “substandard projects” and “enormous costs in the long run.”

I’ve heard this before and it seems funny to me that they are typically uttered by people who have probably never set foot on a construction site and undoubtedly never signed the front side of a paycheck. The prevailing wage talking points do not stand up to even a superficial scrutiny.

Regardless of how prevailing wage is defined by the state Office of Contract Compliance, they are union wages — and they are far from prevalent. The column correctly states that prevailing wage is paid on projects funded by federal, state, school districts, or a general law city funds. Why is this? Because of the headlock, so to speak, that unions have in Washington D.C., and Sacramento.

My painting company does prevailing wage work. When our painters work on a prevailing wage job, they are paid $41.27 per hour, more than double their market-based wage. And, no surprise, prevailing wage adds 30 to 35 percent to our bid.

But we are the same company and send the same employees to prevailing wage and non-prevailing wage jobs. Paying the same employee double his regular wage does nothing to change the quality of his work and does nothing to assure a quality project.

I watched unions lose the residential construction market in the 1970s because they wouldn’t recognize that the wages, like all goods and services in a free market, are determined by supply and demand. This is the most basic of economic principles, yet it appears to be lost on those who support the setting and fixing of prices by any other means.

Adding my side note to the column’s side note regarding Senate Bill 7, cities can and are adopting charters that do not require paying prevailing wage. SB7, sponsored by the Labor Federation, will withhold state funds for two years from cities that award a contract that does not include prevailing wages. The Emery column calls this closing a loophole. I think it is an obnoxious intrusion into the local control of local issues.

The other argument presented in the column is that paying a “decent and livable wage” is good for the community and helps raise the standard of living. This is classic liberal economic theory that government can create wealth and prosperity by taking money from one and giving it to another – giving it either in the form of a gift or in the form of dictating wages that are not sustainable in the marketplace.

This is a theory that has failed every place it’s been tried, yet remains the centerpiece of “progressive” thought. Come to think of it, it’s pretty ironic that many “progressive” ideas are 40 years old. . . and failed.