New prevailing wage rates, same old problems

West Virginia’s political leaders, contractors and labor representatives have been arguing for months now over prevailing wage, the hourly pay and benefits that the state determines should be paid to workers on state taxpayer-funded projects.

Earlier this year, the Republican-led Legislature passed with bi-partisan support a bill requiring the state to use a different methodology to calculate those wages, believing that the long-standing approach was flawed and it artificially inflated wages, raising the cost of building schools and infrastructure.

After several months of research, the Tomblin Administration’s WorkForce West Virginia released its new tables Wednesday.  Some of the newly calculated wages are lower and a few are higher, but overall they are very similar in most of the 28 categories.

For example, a carpenter in Kanawha County would be paid the equivalent of $45.41/hr. under the new formula ($29.48 in wages, $15.93 in fringe benefits), while under the old formula he would make $45.68/hr. ($29.05 in wages, $16.63 in benefits).

State Affiliated Construction Trades Foundation executive director Steve White is still going over the numbers, but he’s generally pleased, saying he believes the new rates are pretty accurate. “Workforce did a tremendous job in getting a ton of data in here,” he told me on Talkline Wednesday.

It should be noted, however, that a portion of the data collected reflects last year’s prevailing wage which critics believe represents inflated rates.  State Senate Majority Leader Mitch Carmichael (R-Jackson) maintains that’s a serious problem, along with the amount of time it took to determine the rates. “I’m very disappointed in this process,” he told me on Talkline. “It’s just been ridiculous.”

Carmichael says when the Legislature reconvenes in January he will push for a full repeal of prevailing wage.

The concept behind prevailing wage is fundamentally flawed. Why should, or how can, the government determine the value of, say, a drywall hanger in Wood County or a bricklayer in Berkeley County?

Additionally, who is representing the taxpayers in this scenario?  Government’s responsibility to be good stewards of taxpayer dollars trumps the politically-driven desire to use those limited resources to subsidize labor wages above market rates.

Hundreds of times every day in West Virginia employers and employees come to terms on the value of labor, everything from an elderly widow negotiating with a teenager the price for mowing her grass to leaders of a union and a manufacturer agreeing on a new contract.

That’s the proven process, perfected by constant repetition in the marketplace. The fact that the prevailing wage debate has gone on in West Virginia for much of this year and there is still no real consensus is conclusive evidence that there is a more fair and functional way to figure out how much workers should earn—the free market.






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