Letter to the Editor from Ellen Sauerbrey on Prevailing Wage

April 5, 2014

Ellen SauerbrayLetter to the Editor,
In a colossal waste of taxpayer dollars, Maryland counties will be forced to pay more for school construction as well as roads, wastewater treatment plants and other public works projects thanks to the legislature taking a bad law and making it even worse.

The 2014 General Assembly has passed legislation to apply the prevailing wage to additional local government projects that receive partial state funding. The prevailing wage which is essentially the union wage, artificially inflates labor costs by ab estimated 30% to 50%

I commend Harford County Executive and Gubernatorial candidate David Craig for speaking out on the impact of the new law on his county, as well as the impact of prevailing wages on the state budget. Every local elected official concerned about getting the most value on public projects should want to let the market determine employee wages as is done in the private sector. County Executive Craig points out that the prevailing wage adds an additional $30 million cost to his county’s $300 million capital budget for school construction.

Would we put up with a government that sets a s hourly wage of $50 an hour for everyone who shovels snow, and then require consumers to pay that wage? I don’t think so! But that is essentially what the state is doing now with taxpayer-funded public projects.

The Maryland prevailing wage enables Democrat politicians to increase campaign contributions from their labor union allies. This is a taxpayer subsidy to a favored sub-set of workers. And the legislation discriminates against young, unskilled workers who might otherwise obtain an entry-level construction job. Many young people would like to learn skills as an apprentice carpenter, but employers can’t afford to hire them at the inflated union wage rate.

The prevailing wage has another side effect. Like many other government programs, this one grows and expands. The number and value of Maryland projects subject to prevailing wage requirements has risen dramatically in just two years. The state labor department advises that its prevailing wage unit currently monitors more than 700 projects, compared with 187 in 2011. With this new law, the state estimates an additional 50 school projects will be monitored for compliance.

The practical effect to construction companies is that errors in adhering to prevailing wage requirements subject them to lawsuits, fines and penalties. Nearly $500,000 will be appropriated every year to the “enforcement unit” of bean counters in the Labor Department. Not surprisingly, this new expanded law increases the number of enforcers as well as the number of local government projects subject to state oversight.

The prevailing wage law artificially increases costs for schools and other public works projects, bestows benefits on a favored political class and creates more regulations for construction businesses. No Governor should tolerate such an obviously flawed system. David Craig has made it clear that he will not, and I encourage all the other candidates to speak out just as clearly in favor of fiscal responsibility and enabling more school construction at lower cost.

Ellen Sauerbrey
Former Minority Leader, Maryland House of Delegates

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2 Responses to Letter to the Editor from Ellen Sauerbrey on Prevailing Wage

  1. Whats a good minimum wage? on April 5, 2014 at 4:40 pm

    It could be that the minimum wage is below poverty level, although as opponents of the minimum wage point out, the real minimum wage is 0, or no job, no income. Often left out of the minimum wage argument is the currency. The minimum wage increase only addresses 50% of the problem, the reason the minimum wage is constantly looked at being increased is because of the general decline in the value of the dollar. The US first had US notes, then Federal Reserve notes, the US notes had actual value, the FRNs didn’t, don’t. They are mere pieces of paper. No one wants to talk about the private ownership of the Federal Reserve, that it is a cartel of banks, basically, that it has done more to ruin the economics of the country than anything else has. Since it was introduced, the dollar has basically lost 90% of its value. The media has done what it can not to discuss the Fed as it ought to be discussed. There really is no free market economy as long as the federal reserve note (frn) is in place, because the only discussion is value based upon another value, or, a gallon of gas is the same price as a loaf of bread, but are they worth the same? Funerals, cars, homes and lawyers are much more expensive than they should be because of the severe distortion of the value of things brought on by the Fed, or the FRN. Its no surprise that when a candidate comes along, such as Ron Paul, that really wants to address these things, the media shuns them to the extent that they can, because the news decides what news is news, or what news everyone will know about.

  2. Somdforever on April 5, 2014 at 5:30 pm

    This is nothing more than the Maryland state government raising taxes, and not having the gonads to say so. If local government projects are forced to adhere to this, the money has to come from somewhere and that somewhere is going to be the taxpayer. For local governments to maintain a sound level of financial stability, they will have no other choice than to increase taxes. It’s no wonder the state gave PG County $650,000,000 to fix roads and sidewalks.