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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