New GOP eyes repeal of longstanding prevailing wage law

By Joel Ebert, Capitol Bureau

 When the new Republican majority takes over in the next legislative session, some lawmakers hope to roll back West Virginia’s longstanding prevailing wage law. “It should be eliminated across the board,” said state Sen. Craig Blair, R-Berkeley.Blair has been a critic of West Virginia’s prevailing wage law and was among several Republicans seeking its repeal last year. With the GOP holding a majority in both chambers, which is enough to override a veto by the governor, West Virginia’s prevailing wage law may see some changes. The law, which has been in existence since the 1930s, requires a wage set for all workers, such as carpenters, painters and electricians, on construction projects to ensure that all receive a uniform pay rate and benefits for the type of work they perform, according to the Department of Labor website. The department sets the wages by performing an annual survey of both union and non-union contractors.Critics say the method of determining the prevailing wage is faulty.“The way the labor department manages the surveys is totally inaccurate,” said Chandler Swope, co-founder of Swope Construction. Swope said the labor department technically follows the law but it does not represent the actual prevailing wages. “Prevailing wage is a political payoff because unions get to set pay rates,” Swope said. He said the Department of Labor publishes union wages but not private wages. “If 35 percent of the reports are the same, they can declare that’s the prevailing wage.” Swope said after this year’s election, there can finally be changes to the law. “Under Republican leadership it’s no longer a taboo subject,” he said.Blair said he knows Democratic legislators who favor repeal but are unable to say so publicly because of the threat of union backlash. “I’m not anti-union by any means,” Blair said. “But it’s time to put some changes in place. If it doesn’t work, it’ll be on Republicans’ shoulders. If it does work, we’re going to get more jobs in West Virginia.“The economy of West Virginia will be measurably improved without the prevailing wage.” “It will create jobs and job opportunities,” said state Sen. Bill Cole, R-Mercer. Cole, who was recently nominated by his party to serve as the next Senate president, was the lead sponsor of Senate Bill 360, which attempted to “repeal the article requiring public authorities engaged in the construction of public improvements to pay the prevailing hourly rate of wages,” during the 2014 session. Cole said he continues to have conversations with his fellow Republicans to determine whether they are fully committed to working on the issue when the session convenes next month. “It’s certainly something we are looking very closely at,” Cole said. Several Republicans, including Cole and Delegate Michael Folk, R-Berkeley, say calling it prevailing wage is inaccurate. “It’s a misnomer,” Folk said. “It should be the fairness to taxpayers act,” said Cole. Both said the prevailing wage does not allow the free market to set prices for work. They said that is problematic for taxpayers. “It’s generally accepted that prevailing wage projects cost more money than going to the market,” Cole said. “We’re spending taxpayers’ dollars when we do this.”The economics of prevailing wage laws have been studied meticulously. Each year, dozens of reports are published throughout the country on the subject. Michigan-based Anderson Economic Group released a study in 2013 that determined the state’s prevailing wage law cost taxpayers $224 million per year. In West Virginia, proponents for repeal often turn to a 2009 study by Andrea Dean, a Charles G. Koch doctoral fellow. The study features several comparisons of “true market” wages and mandated prevailing wages.” It concludes “the ideal solution would be the elimination of all prevailing wage restrictions.”Blair said he has seen estimates that the state would save $200 million to $300 million if the law were repealed.But Steve White, director of the 20,000-member Affiliated Construction Trades, sees things differently.“The state’s prevailing wage law is good for taxpayers,” he said. White said numerous studies show the elimination of prevailing wage does not save states any money. He pointed to a study of Kentucky’s prevailing wage law that was released earlier this year by a University of Utah economics professor. The study found the total income lost by all Kentucky workers, both inside and outside construction, could annually range from $125 million to $252 million, if the law were repealed. “We think the prevailing wage is good for local businesses and contractors, good for workers and encourages skills and training,” White said.He said the prospect of a Republican-led repeal is especially disconcerting. “It would mean wage cuts, less training opportunities, less people who have benefits, less safety and more accidents on job,” he said. “And all for no savings.”“That’s total union rhetoric,” Swope said. “The safety issue is a myth.”Blair said a look at Virginia, which is one of 18 states that does not have a prevailing wage law, reveals the truth. “Are their bridges falling down? Are their sewer lines not working? Are the buildings falling?” he asked. “No.”Blair said inspection processes ensure companies are being safe.That’s not necessarily true, said Senate President Jeff Kessler, D-Marshall. Even with the free market there can be problems, especially when it comes to inspectors. “There’s always a tendency to cut costs,” he said. Kessler said the safety of workers is a priority, which is why the state should not repeal the law. “It would be a terrible mistake,” he said. Sen. Jack Yost, D-Brooke, questioned whether the free market argument works in terms of public construction projects.“Is it the best course and the best interest to have the cheapest labor do a project?” he asked. Yost said public construction projects should be similar to choosing a doctor. “I want someone that’s trained, that’s knowledgeable,” he said. “I want the best quality product I can buy for my buck.”And even though they will soon be the minority party, Democrats will not go without a fight, said Delegate Mike Caputo, D-Marion. Kessler said he recently received a letter from Jarvis, Downing and Emch, Inc. a major contractor in West Virginia, urging him to fight any attempt to repeal the law. “They were adamant about resistance because that provides their employees a decent wage,” Kessler said. He said he would look at any legislation put forward by Republicans before determining what to do next. While Kessler is waiting to see what the Republicans do, Caputo is preparing for battle. “We are going to stand firm and do all we can, even if we don’t have votes to stop it,” he said. Caputo said it’s unusual that Republicans would attempt to repeal the state’s prevailing wage. “It’s kind of mind-boggling. The party that wants to talk about jobs and the first thing they want to do is attack a system that provides a fair wage for people. “Working class people should be appalled.”

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