Incensed over a crew of low-paid, unskilled, out-of-state workers who had displaced local workers on a public works project, Rep. Robert Bacon, R-N.Y., teamed with Sen. James Davis, R-PA., in March 1931 to push a federal prevailing wage act through Congress. President Herbert Hoover quickly signed it.
Later that year, as the Depression deepened, Republican Governor James Rolph signed California’s first state prevailing-wage law.
During the 76 years that followed, prevailing wages have raised all boats, lifting millions of construction workers–union and non-union alike–out of a hand-to-mouth lifestyle and into the middle class. Despite the gains, too many misguided public officials and private-sector elitists still want to abolish prevailing wages and start construction pay on a race to the bottom.
The latest effort to put skilled construction workers and unskilled day laborers on an equivalent pay scale occurred last month in the City of Vista in San Diego County.
The Vista City Council called for a special city election on June 5, 2007, to ask Vista voters to adopt a charter in an effort to bypass state prevailing wage law.
Because of the lack of advance notice, the ballot pamphlet included only an argument supporting the charter and no argument against the charter. As could be predicted, turnout was extremely low, with fewer than 21 percent of eligible voters casting ballots, and the charter was adopted.
A City Council report made clear that the main motivation for adopting the charter was the desire of some Vista officials to avoid the state prevailing-wage law as the city prepares for a $100 million construction program. On June 26, the City Council followed up by approving an ordinance declaring that the prevailing wage law no longer will be applied to Vista city projects.
That’s why the State Building Trades filed a lawsuit to establish that charter cities must comply with the state’s prevailing wage law.
California’s prevailing-wage law requires contracts for public works to specify that contractors must pay construction workers at least the wage and benefits package that prevails for each of the trades in each geographic area of the state. The wage law also requires public contracts to specify that contractors must employ apprentices enrolled in state-approved apprenticeship programs.
Officials in some charter cities, obviously including those in Vista, contend that they do not have to comply with the state’s prevailing-wage law. They mistakenly believe they can save money by awarding city projects to contractors who don’t pay decent wages or health benefits to their employees, and don’t provide training to apprentices.
Contrary to their contentions, there are numerous studies which show that the effect of paying prevailing wages on public works projects is either statistically insignificant or, in some cases, actually lowers construction costs. A Federal Highway Administration study of highway construction in the United States from 1980 to 1993 found that payment of prevailing wages resulted in the use of higher paid, more highly skilled workers and saved taxpayers an average of $123,057 per mile.
Other studies found that reducing prevailing wages would lower tax revenues, reduce job site productivity, decrease worker training and job site safety, lower the numbers of minorities in training programs, reduce health and pension benefits, and impact negatively on local and state health care systems.
The State Building Trades intends to establish with its lawsuit that ignoring the State’s prevailing wage law is not just bad policy–it is also illegal.
Charter cities that ignore the prevailing wage law rely upon a 1932 California Supreme Court decision, City of Pasadena v. Charleville, which ruled that the California Legislature didn’t have the constitutional authority to apply an earlier version of the prevailing wage law to charter cities. But there have been significant changes in the California Constitution, the prevailing wage law, and the mobility of the workforce since 1932. The reasoning of the Charleville case is outdated and should be rejected.
Prevailing wage laws were enacted to maintain area wage standards, to ensure that local workers are not undercut by transient low-wage workers, and to protect taxpayers from substandard labor on state and federal projects. The laws set clear guidelines to make sure that contractors bid on public projects on the basis of skill and efficiency, and not on how poorly they pay their workers.
California’s prevailing wage law also serves a statewide interest in apprenticeship training by requiring contractors to use apprentices.
In 2003, the California Legislature adopted a joint resolution declaring that the prevailing wage law addresses statewide concerns and should apply to all public entities, including charter cities.
A successful lawsuit will protect all construction workers by stopping a devastating downward spiral in their wages and benefits.