Jan. 30, 2017

By Steven Mentzer (R-Lititz)

Last week, I wrote about how prevailing wage drives up school construction and repair costs far beyond normal market prices. But prevailing wage also negatively impacts many other areas where taxpayer money is used, such as transportation.

Pennsylvania’s Prevailing Wage Law, which hasn’t been adjusted for inflation since 1963, mandates a community’s prevailing wage be paid on publicly funded projects of $25,000 and higher.

For example, in the most recent survey conducted, a cement finisher in Lancaster County charges an average of $25 per hour, including benefits. But, under the Prevailing Wage Law, the state requires government projects in Lancaster County to pay a cement finisher $40.40 per hour — more than 58 percent higher — for the same work. An iron worker in our county charges $27.25, but under prevailing wage, that price jumps to $49.90.

In practice, the prevailing wage has become the union-inflated rate found in collective bargaining agreements. On average, it is 51 percent higher than what we pay private sector contractors for identical construction of equal quality.

In 2010, $12.7 billion of Pennsylvania taxpayers’ money went toward projects subject to the prevailing wage law, such as repaving a municipal road or fixing a borough-owned bridge. By comparing county wage data, typical labor costs, and the experience of other states that have done away with wage mandates, that’s about a 10 percent to 20 percent price hike over market-rate labor costs — a $1.3 billion to $2.5 billion shot in the neck to taxpayers. For an average family of four, it’s a needless $400 to $800 more a year in taxes.

The House has made attempts to adjust the cost threshold of all prevailing wage projects from the 1963 level of $25,000 to $185,000, but these efforts have been stalled due to the unfortunate resistance of organized labor.

In 2014, we managed to get into law a measure that transportation projects under $100,000 would not be subject to prevailing wage. I was one of several House members who wanted that threshold to be higher, since virtually no transportation project of any magnitude costs less than $100,000. But again, opponents of change were able to turn back that effort.

While we continue to work hard on commonsense reforms and combating the special interests that stand in the way of saving Pennsylvanians’ money, union bosses who defend the status quo have yet to explain to taxpayers why their members should be paid more than needed for no added benefit.