Prevailing waste
More taxpayer dollars used as a wealth transfer.
It’s been the gift that keeps on giving to Big Labor, and the state of Delaware is out to enable it again.
Once again, our state passed changes to the prevailing wage law, adding the offsite fabrication of specific items to the statute. The change was described as “clos(ing) a loophole in the prevailing wage statute that was being used to pay workers below the prevailing wage by performing work offsite instead of onsite, regardless of whether it was necessary to do so.” This definition was added to the law:
“Custom fabrication" means the offsite fabrication, assembly, or other production of non-standard goods or materials, including components, fixtures or parts thereof, specifically for a public works project.
People who do this work already make pretty good money, but they’re going to get an artificial raise thanks to the generous givers of our taxpayer dollars. This comparison comes thanks to the Delaware House Republicans:
For instance, Delaware's current prevailing wage rates (set March 15, 2023) would pay a carpenter working on a construction project in New Castle or Kent counties an hourly rate of $59.56 and a rate of $47.80 if the work were being done in Sussex. By comparison, according to data from the U.S. Bureau of Labor Statistics for Delaware (May 2022), our state's median (midpoint) hourly rate for a carpenter is $27.64. The BLS reports that nationally, 90% of carpenters make $43.25 an hour or less.
The data is similar for other construction occupations. According to the BLS, the median wage for electricians in Delaware is $28.00 per hour. Nationally, 90% make at or below $49.18 per hour. Delaware's prevailing wage rate for electricians working on a state-funded construction project in any of the three counties is $79.17 per hour.
Nice work if you can get it. But what this legislation tends to do is discourage smaller businesses from bidding on state projects since their margins don’t allow for the vast increase in wages - remember, contractors don’t get their money up front.
Several years ago I wrote about this subject in a different context, but it was helpful because I had the numbers at my fingertips as to how much being forced to pay prevailing wage actually adds to the project cost - at least as it related to schools.
This is what I said at the time, which explains a bit about background to new readers.
It may not surprise you that I have some familiarity with school construction. In the 1990s, thanks to a court decision, the state of Ohio went on a multi-billion dollar spending binge to construct new schools in practically every one of Ohio's 600-plus school districts. (I spent seven years working for an architectural firm which specialized in schools, although I had left that company before the boom in school construction began.) In 1997 the state created an exemption to prevailing wage regulations for schools, and in that debate numbers similar to the 30 to 50 percent savings were bandied about by proponents of the measure eliminating prevailing wage.
It turned out that the savings from Ohio abandoning prevailing wage on school projects was about 10 percent per project, but given the size and scope of the overall work, the savings still added up to hundreds of millions of dollars. Moreover, it’s also worth pointing out that the surge of building likely made individual projects a little more costly because all of the qualified contractors were pumping out work. In a more “normal” market the savings could reach 15 to 20 percent.
If prevailing wage had a basis in reality, I wouldn’t have such a problem with this. But just in the two examples cited by the House GOP - who went so far to compare the figures to those compiled by the federal government, which these days would probably have reason to put their thumb on the scale - Delaware taxpayers are being hosed every time there’s a prevailing wage project out there. Just getting back to realistic pay scales would help with both making government more wallet-friendly and perhaps encourage more players to enter the game. But the party in charge seems to prefer fattening up the wallets of their friends, leaving the rest of us stuck with the tab.
Typical. Here's one for you. Here in my state, Washington, the Service Employees Union conned the Legislature into passing a law that private individuals taking care of fami!y members HAD to join the Home Health Care Union so they could pay dues! I am caretaker for my wife and they can screw themselves!