‘Prevailing wage’ law doesn’t lower costs—it lowers standards – Opinion – Crain’s Chicago Business

4 Jun

Corporate types continually advise us that Illinois is losing ground to Indiana and that we must follow our neighbor’s abandonment of prevailing wage, and adoption of right to work, to succeed.

David From’s recent opinion piece, “Here’s another good idea from Indiana: Get rid of prevailing wage law,” advocates for the removal of good wages and benefits for construction workers in Illinois. If we don’t, he says, we are not good stewards of our tax dollars.

From says paying a prevailing wage causes “inflated construction prices.” Ohio repealed its prevailing wage law for school construction in 1997. Yet a 2013 study by Bowling Green State University found no evidence to support the assertion that Ohio saved money on school projects in the following decade.

If prevailing wage discourages competition, as he attests, then how can one account for the April project letting by the Illinois Department of Transportation in which the agency awarded 15 projects totaling $53 million—and the difference between the two lowest bids for each averaged less than $3,600?

When people argue that prevailing wage makes us less competitive, they mean that construction unions have built their skills training and productivity standards to such a high degree that many contractors without these type of worker-investment programs do not win. If you remove the living wages that help pay for worker training, you’ll “level the playing field.”

Or drive down the standards.

MORE DOLLARS IN OUR COMMUNITIES

There’s real value in getting the job done right the first time. After Utah repealed its prevailing wage law, a study confirmed that cost overruns tripled in the following decade. The Construction Labor Research Council in Washington, D.C., found that the cost per mile of road construction in “high wage” states like Illinois is 4 percent less than in “low wage” states.

Which future does Illinois want? Where should our investments lie? In a state of unskilled, low-paid workers? Or toward the opportunities that come with being highly skilled, well-paid workers? Right now Illinoisans make nearly $3 more an hour than Indiana workers. Indiana construction workers anticipate a 25 percent drop in their annual salaries because of their state’s repeal of prevailing wage.

That’s 25 percent fewer dollars spent in their local communities, at local businesses. A loss of income like that affects many more people than the families of one group of workers.

No matter how badly the politicians have bungled our budgets, Illinois’ skilled workforce is one of the top reasons our state remains competitive, not only in the Midwest but across the globe. Especially when alarms are being rung that Illinois will be lacking 150,000 skilled workers by 2020, doing away with prevailing wage takes us in the opposite direction of where we need to invest, and keep investing—in our people.

via ‘Prevailing wage’ law doesn’t lower costs—it lowers standards – Opinion – Crain’s Chicago Business.

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