Pioneer Editorial: Prevailing wage yields living wages
Some $9 billion is headed to Minnesota in federal stimulus monies, funds that will fulfill a variety of needs.
Some will help soften the state's budget deficit for the next two years. Some will help keep people on public assistance health care. A large portion will help lower taxes of working Minnesotans. And another large portion will provide thousands of jobs through funding for roads and bridges.
Coupled with the potential of a $300 million-plus capital bonding effort by the state of Minnesota, millions of dollars will go for construction projects throughout the state -- from repairing college buildings to reconstructing worn state highways. It all means jobs to stimulate the economy.
On Wednesday, two Republican state lawmakers -- Sen. Chris Gerlach of Apple Valley and Rep. Steve Gottwalt of St. Cloud -- introduced legislation calling for a "timeout" on prevailing wage mandates. Their bill would suspend prevailing wage for the calendar year following a November budget forecast of a 1-percent deficit or greater.
They argue that state law requires contractors to pay on state projects a "super-minimum wage" that inflates the cost of construction. They proffer that prevailing wage adds 7 to 10 percent to the total cost of the project.
Such a change, however, is counterproductive. Minnesota's prevailing wage law, on the books since 1973, simply requires contractors on state-funded projects to pay workers according to wage rates comparable to wages paid for similar work in the area where the project is built. It's not union scale, nor is it a system that "is deliberately biased to ensure that high wages are paid," as Sen. Gerlach said.
It is a system that allows local contractors to compete with low-cost out-of-state contractors to even the playing field. Plus it is an effort to provide living-wage jobs, which should be the goal of the stimulus funding.
We don't just want to put people back to work at minimum wage jobs; we want them to have meaningful jobs that allow them to take care of their family's needs.
Much of the federally paid work under the stimulus package is similarly covered with Davis-Bacon laws which call for the same prevailing wage formula. Why should Minnesota be different in offering construction work with low-cost employees?
Beltrami County required prevailing wage on its recent spurt that completed its downtown campus. It allowed local contractors to successfully compete for much of the work and allowed good-paying wages. And it saw much of the work come in under budget -- a statistic at odds with Gerlach's and Gottwalt's claim that prevailing wage adds to construction costs.
Paving the way for cheap labor is not economic stimulus, and suspending the state's prevailing wage laws would do just that.