EDITORIAL: Bill would boost costs for many public works jobs
Expanding Nevada’s prevailing wage laws is a bad idea. There’s no evidence that prevailing wage laws are a safeguard against shoddy contractors.
March 27, 2023 - 9:00 pm
Democratic leaders in Carson City have received tens of thousands of dollars in campaign contributions from organized labor in recent years. It’s thus no surprise that Assembly Speaker Steve Yeager and Senate Majority Leader Nicole Cannizzaro have introduced legislation to drive up costs for Nevada taxpayers while profiting from union interests.
Mr. Yeager and Ms. Cannizzaro are behind Senate Bill 226, which would expand Nevada’s prevailing wage laws to include more job categories and widen the definition of projects that fall under the requirement. The intent is to ensure that all government construction jobs are done with union labor.
Supporters maintain that the mandate will ensure quality work without driving up costs, but neither argument holds water.
First, there’s no evidence that prevailing wage laws are a safeguard against shoddy contractors. Some of the biggest public works boondoggles in the nation’s recent history — Boston’s Big Dig, California’s high-speed rail to nowhere — have been the product of union labor, yet suffered from massive cost overruns and construction blunders.
Second, while some studies — conducted primarily by left-leaning organizations — profess to find no relationship between prevailing wage statutes and construction costs, these laws, by definition, make labor more expensive, pricing nonunion workers and businesses out of the market. Isn’t that the whole point of their existence?
The description of the bill reads like a union manifesto. The Legislature “makes a declaration of legislative intent finding that … the payment of prevailing wages to workers on public works projects that are funded in whole or in part by public money is essential to the economic well-being of this state.”
This is presented as fact despite the authors failing to substantiate such a sweeping contention.
There’s also scant evidence that the prevailing wage standards set by the Nevada labor commissioner reflect the reality of construction pay in the state. To the contrary. “Wage rates demanded by trade unions are generally much higher than those that prevail on the marketplace,” a 2011 study by the Nevada Policy Research Institute concluded. Yet the regulations governing the determination of such wages downplay or ignore nonunion pay practices.
Nevada’s prevailing wage law has existed since 1937 and is modeled on the federal Davis-Bacon Act, which was a not-so-subtle effort to protect union workers at the expense of nonunion laborers, many of whom were Blacks or immigrants. Its unseemly origins aside, markets remain a far more efficient means of setting wages than the edicts of bureaucratic central planners. Nevada should be looking to thin the regulatory thicket governing public works jobs. SB226 destructively does the opposite.