Concerned Pennsylvanians are well aware that PennDOT is facing a multibillion dollar shortfall. Whether it is the state’s several thousand structurally deficient bridges or the more than occasional potholes, state rankings continually cite the Commonwealth amongst those having the worst roads in the nation. Democrats proclaim that PennDOT’s dilemma stems from a lack of revenues are therefore advocating for increased fees and gasoline taxes. However, the facts reveal that the Keystone state is amongst the highest in the nation when studying spending per road miles and gasoline taxes. There are solutions to the transportation crisis that will more efficiently allocate transportation dollars. One such proposal is prevailing wage law reform.
CF President Matt Brouillette explains that the origin of prevailing wage laws dates back to the 1930s. It was an effective measure designed to keep construction wages high in order to protect white workers from competitively cheap black labor. While many states have repealed their prevailing wage laws, Pennsylvania continues this practice which is responsible for increased labor costs of more than 30 percent. The annual price tag for prevailing wage is approximately $1 billion. The increased costs associated with prevailing wage negatively impact state transportation funding, local government and school board budgets.
Towards the end of 2011, Rep. John Bear and his colleagues on the Labor and Industry committee introduced several bills to reform Pennsylvania’s costly and antiquated prevailing wage. The GOP lawmakers believe that the new legislation will free up funding for additional public projects and more efficiently use taxpayer money. To date, the package of reforms has yet to reach the governor’s desk. As legislative attention is becoming increasingly focused on transportation issues, it is quite possible that after 50 years, the prevailing wage may finally be amended in 2012.
PA Independent’s recent story on the resurgence of the prevailing wage debate was met with opposition from PA AFL-CIO President Rick Bloomingdale. He claims that the proposed changes in prevailing wages will negatively impact union construction laborers by reducing wages and ultimately will affect the communities in which they live. While Bloomingdale’s claims have merit, he does not address the consequences or burden that the increased taxes required to fund the salaries of construction workers will have on the majority of Pennsylvanians. While many citizens are losing jobs or being forced to accept pay cuts, the prevailing wage law guarantees construction worker’s salaries of 20% to 30% above that of comparable jobs in the private sector.
Reforming or eliminating Pennsylvania’s costly prevailing wage laws are an important start in addressing PennDOT’s funding gap and spending problem. Prevailing wage laws are proving to be too costly and are adversely affecting the ability to repair the state’s infrastructure. The laws are out of touch with the majority of Pennsylvanians who have experienced large pay cuts and loss of employment. At a time when families are struggling to make ends meet, taxpayers can simply not afford to support artificially high wages associated with the public sector labor union. Moving in the direction of competitive private wages will free up the resources needed for more projects and additional hires in construction throughout Pennsylvania.
Jonathan Humma of Lancaster County is an American University economics student and blogs at http://keystoneliberty.org
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