6:00: Morning News

Pass prevailing wage repeal

The West Virginia state Senate will vote today to repeal the state’s prevailing wage law.  It will pass 18-16 along party lines, and then go to Governor Tomblin’s desk.  He will veto the bill, but Republicans, who are pushing the repeal, have enough votes in the House and Senate to override the veto.

Republicans wanted to remove prevailing wage last year during their first year in the majority, but they eventually compromised with Democrats on a modification of the law.  However, GOP leaders believe nothing really changed in how the minimum pay scales for workers on state-funded projects are determined so they moved ahead this year with a full repeal.

Supporters and opponents have both engaged in some hyperbole.

For example, one of the arguments in support of keeping prevailing wage suggests that once that policy is removed, West Virginia will be deluged with fly-by-night contractors who will underbid for state projects by using illegal immigrant workers.

That argument ignores the fact that using illegals is already prohibited. If illegal labor would be such a serious problem when prevailing wage is removed, why isn’t it a significant issue now in West Virginia on private projects?

On the other side, opponents of prevailing wage have argued that removing the mandate will not result in lower pay for some workers on state projects.  But if that’s the case, why are Republicans pushing for it?  The whole premise behind removing prevailing wage is that the rates are artificially high.

Additionally, Republicans have argued that removing prevailing wage will leave more money for state projects, meaning there would have to be some savings on labor costs.

It’s worthwhile to again quote what Nobel Prize winning economist Milton Friedman said about wages and the free market:

“When workers get higher wages and better working conditions through the free market, when they get raises by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger – there’s more for the worker, but there’s also more for the employer, the investor, the consumer, and even the tax collector.”

The concept of prevailing wage is flawed, antiquated and rooted in the unseemly history of the federal Davis-Bacon Act of 1931 that gave preferential treatment to white union members over non-union black workers.

Ultimately, the state’s prevailing wage law should be repealed because the free market is the best method for determining the value of labor.  Government determined prevailing wages tamp down that necessary competition, while raising the cost to the taxpayers of public projects.

 

 

 

 

 

 

 





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