Bringing public project costs into reality

Employers who waste money don’t survive, so they become pretty good at determining the prevailing wage for any given job.

The exceptions are contractors on government projects, who are ordered by law to pay wages far higher than necessary. As a result, when voters allocate enough money to build eight new schools, the money stretches only far enough to build seven. Those state mandates are misleadingly called “prevailing wage” laws, often referred to as “Little Davis-Bacon Acts,” after the federal law on which they’re based.

Upset that the policy of awarding federal contracts to the low bidder had allowed “bootleg” southern labor to build a veterans hospital in his district in the 1920s, racist Long Island congressman Robert L. Bacon and other sponsors specifically stated a major purpose of their 1931 federal bill was to block “cheap colored labor” from taking jobs from local white workers. The result, of course, was less work for everyone.

In Nevada, only about 20 percent of contractors participate in the annual state poll designed to determine and set prevailing wages, because participation requires the disclosure of proprietary information that competitors can use to formulate lower bids. So state survey forms are often filled out by labor unions “assisting” the contractors. The result can be fantasy wages.

As documented by former Review-Journal writer A.D. Hopkins in 2000, the mandatory minimum wages published by the Nevada state Labor Commissioner sometimes require contractors to pay as much as $13.69 per hour above the highest real wages reported for a given labor specialty during the previous year. Those erroneous “prevailing wages” — dreamed up out of thin air — then became the actual wages that had to be paid the next year on government construction projects, at which point they were factored into the following year’s wage mandates.

Wednesday in Carson City, Assemblyman Cresent Hardy, a Republican contractor who wants to amend Nevada’s prevailing wage law, cited a Nevada Policy Research Institute study that says the prevailing wage law adds 46 percent to construction worker pay in Southern Nevada — and 13.2 percent to the overall cost of building a school.

The water carriers for the unions, including Assemblywoman Peggy Pierce, D-Las Vegas, responded that the whole community benefits when contractors are made to pay “decent wages.” So taxpayers benefit when their pockets are picked at a rate of $51 an hour for elevator installers, as opposed to the $38 per hour ($76,000 a year, before benefits or overtime) that said installers are happy to receive when working a nongovernment job?

Mr. Hardy’s Assembly Bill 318 would lift the project threshold on which prevailing wages must be paid from $100,000 to $1.5 million. Of course, unions already game the $100,000 limit. When the school district tries to put an $80,000 paving or renovation job out to bid, the maintenance department often is informed that job will be “ganged up” with other projects in order to exceed the $100,000 cap and trigger the higher wage requirements.

Given that union-friendly Democrats hold a 26-15 edge in the Assembly, Mr. Hardy’s bill is likely to die in committee. And we wonder why government demands ever more money — yet seems to get less and less done?