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Should WV's Prevailing Wage Law Prevail for Public Projects?

PHOTO: The argument for repealing West Virginia's prevailing wage law is it would save the state money on public construction projects. But several studies have found repeal would cost the state more in the long run. Photo credit: Paul Keheler/Wikimedia.
PHOTO: The argument for repealing West Virginia's prevailing wage law is it would save the state money on public construction projects. But several studies have found repeal would cost the state more in the long run. Photo credit: Paul Keheler/Wikimedia.
February 2, 2015

CHARLESTON, W. Va. - People pushing to end West Virginia's prevailing wage law say the move is intended to cut the cost of building schools and other public construction projects. But several new studies warn that a repeal would raise costs instead.

The prevailing wage law mandates that construction workers on public projects make the going rate for their specialty in a given area. Sean O'Leary, policy analyst with the West Virginia Center on Budget and Policy, says his group's analysis of the new research shows repealing the law would actually cost the state in the long run.

"Our construction costs are actually lower than a lot of our neighboring states, like Virginia, Ohio, that don't have prevailing wage laws," says O'Leary.

Senate Bill 361 was set for discussion by the Senate Government Organization Committee on Thursday before being pulled from the agenda. Sponsors say they expect to bring it up this week.

West Virginia Chamber of Commerce President Steve Roberts says estimates are the state could save 25 to 30 percent with a repeal. But the prevailing wage law applies only to labor costs and according to the Center on Budget and Policy report, federal census figures say labor is only 27 percent of state construction costs, making 25 percent savings impossible. Roberts had this reaction:

"I wouldn't be too impressed by somebody's cursory look at this," he says. "We would have to look at the credibility of the report at this point."

Roberts has since received a copy of the report but hasn't commented further.

O'Leary says their findings are in line with a 2004 study of school construction, and a new study from the University of Missouri. He says in public projects the prevailing wage ensures a better end result, helps maintain a high-quality workforce, and keeps in-state contractors from being under-cut by out-of-state firms that use lower quality labor.

"You get what you pay for," says O'Leary. "There's fewer workplace accidents, the work gets done quicker, the productivity is substantially higher, rather than when you have public construction projects based on who can pay their workers the least."

Dan Heyman, Public News Service - WV