"Prevailing wage laws force government and publicly-funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. In Michigan, this minimum construction wage is mostly arbitrary, not taking into consideration private-sector wages or the cost of living in an area."Thursday, February 12, 2015
How Michigan’s Prevailing Wage Law Raises Costs [Michigan Capitol Confidential]
How Michigan’s Prevailing Wage Law Raises Costs [Michigan Capitol Confidential]:
"Prevailing wage laws force government and publicly-funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. In Michigan, this minimum construction wage is mostly arbitrary, not taking into consideration private-sector wages or the cost of living in an area."
"Prevailing wage laws force government and publicly-funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. In Michigan, this minimum construction wage is mostly arbitrary, not taking into consideration private-sector wages or the cost of living in an area."
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Today, Davis-Bacon type prevailing wage laws have little to do with supporting wages of skilled workers on construction sites. Skilled workers' wages are actually determined by contractual quality warranties and completion timeline bonuses. Contractors are not going to hire a bunch of clowns, unless they are required to by government antidiscrimination regulations. It is worth noting that the original Federal Davis-Bacon Act was written and passed by racist Democrats to keep skilled blacks from working on government contracts. It was a major element of FDR's strategy to get Southern Democrats to support the rest of the New Deal. It worked, for a while.
Prevailing wage laws are, however, still a major element of functional price fixing on government contracts. They allow the larger, better capitalized contractors to bleed their smaller, up and coming competitors. This reduces the number of prime contractors able to bid on government contracts. Perversely, this reduces competition for skilled workers, thereby cutting the wages of workers like BridgeBuilder by reducing the number of bidders for their services.
Real (inflation adjusted) skilled construction wages are now higher in non prevailing wage states than they are in prevailing wage states like Michigan. More contractors = more bids for skilled labor. Simple equation. Michigan government construction contracts typically get bid on by only one or two primes. Contracts in non prevailing wage states typically get bid on by ten or more primes.
Typical example of devious liberal hypocrisy mated to crony capitalism.
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