EDITORIAL: State can build more, save more by erasing prevailing wage law

Nevada has a prevailing wage law. Which is to say it has an inflated wage law.

Prevailing wages, not market wages, must be paid on public construction projects, a requirement that runs up the cost of government contracts by as much as 30 percent. The law, a sop to politically active trade unions, does this by design.

Considering Nevada desperately needs new schools, roads and other infrastructure — especially in Clark County — and lacks the funding to complete priority projects, the 2015 Legislature could greatly stretch government capital dollars by enacting the fourth of 25 policy recommendations the Review-Journal will provide in 25 days: repealing the prevailing wage law.

Unions argue that prevailing wages ensure the best-qualified workers complete important public projects. In reality, prevailing wages serve as barriers to experience for younger tradesmen and undercut competitive bidding. This was the stated goal of the country’s first prevailing wage law, which was enacted in the 1920s to keep black construction workers from the South, who were willing to work for less money to learn trades, off public projects in the Northeast.

What a tradition to uphold. It’s hard to say what’s more offensive: the racist roots of the law, the state deciding the appropriate cost for all kinds of skills (which worked out so well behind the Iron Curtain) or the resulting ripoffs the public is forced to fund.

Here’s how the scheme works. The state sends out surveys to contractors to find out what they pay for various jobs. The state is supposed to examine all those surveys and calculate a “prevailing” wage to be paid for all government contracts.

The Review-Journal has been writing about this issue for decades. Our investigations have found that very few contractors return the surveys because they don’t want competitors to know what they pay. The few responses that come in — a 20 percent return rate is not unusual — are from unions themselves, or from contractors who had completed public projects that paid prevailing wages. So wages mandated by law are reported to set wages mandated by law.

Some years, the state’s labor commissioner has set wages for certain jobs seemingly from thin air, several dollars above the highest reported wage. It’s not unusual for contractors to be forced to pay wages $12 to $15 per hour more than they would on a comparable, private-sector project. It’s not unusual for the wages of some jobs to nearly double one year and collapse the next. And it’s not unusual for workers on public projects to simultaneously do a job at the prevailing wage and do the same job on a private project for significantly less money.

These inflated wages are no guarantee of quality workmanship. The valley’s great public-sector construction boondoggles were brought to you by workers paid prevailing wages. The UNLV library. The Regional Justice Center. New schools with leaky roofs.

One of the most important tasks before the 2015 Legislature is saving the Clark County School District and its School Board from themselves and formulating a short-term solution to the crowded system’s lack of classroom space. That solution requires lots of new construction — all subject to the prevailing wage law. Repealing that law would allow the school district to build five campuses for the current cost of four.

Gov. Brian Sandoval should champion this cause in his State of the State address Thursday. When the Legislature convenes Feb. 2, erasing the prevailing wage law should be among its highest priorities.