Washington is one of 32 states that mandate “prevailing wage” rates on public construction projects. The rates vary depending on the county, but they’re higher than minimum wage and significantly increase the cost of public projects. Paul Dennis, former Camas mayor and current president of the Camas-Washougal Economic Development Association, recently said “the markup is about 30 percent, as a rule of thumb.
“Supporters of prevailing wage laws argue that they increase quality on public projects, but remember who the “public” really is. It’s us, taxpayers, folks who insist on quality in private-sector purchases where prevailing wages are not required. Remember, too, that public construction projects are subject to repeated, rigorous inspections to ensure standards are met.
Several legislators in Olympia are trying to adjust and reduce the impact of prevailing wage laws. Although our preference is that Washington join 18 states that don’t require prevailing wages for state projects (federal law covers federal projects), we applaud their efforts to at least make the law here more reasonable. One bill would lower prevailing wage rates for contractors conducting site work or constructing parking areas, utilities, streets or sidewalks related to residential projects. Another would require contractors to conduct more recent prevailing-wage surveys. A third bill would eliminate prevailing wage requirements for off-site laborers such as delivery truck drivers and workers who fabricate materials to be taken to a job site.
Whether these bills can survive attacks by prevailing-wage defenders remains to be seen. The greater reality, though, is that taxpayers deserve to have their money spent as efficiently as possible by governments. Artificially jacking up wages is not a good way to govern. Neither is making it more difficult for small businesses to bid on public projects. And to claim that quality is increased is to presume private-sector work is inferior to public projects.
Another weak claim by prevailing-wage supporters is that public construction projects are meant to last for many decades. But how is that different from projects in the private sector? Aren’t homes built by private-sector contractors meant to last a century or longer?
Local residents need look no further than the massive Columbia River Crossing project to see the impact of our state’s outdated prevailing wage laws. Costs are forced up by as much as 30 percent. A more competitive process would give taxpayers more bang for their buck.
The Oregonian pointed out in a Feb. 24 editorial that “plenty of privately funded projects are built both well and safely without prevailing wage mandates. … One way to address this problem is to raise more money. Another is to spend it more efficiently.” We agree.
As the report in one of the Senate bills maintains, “Free-market solutions are the most sustainable way to meet societal needs.” That’s why Washington should at least accelerate the debate about prevailing wages, with the ultimate goal of eliminating them and pumping greater efficiencies into public construction projects.