Prevailing wage still in Rauner’s crosshairs

Bill Knight column for Thurs., Fri., or Sat., Aug. 27, 28 or 29

Watch out.

Before Gov. Bruce Rauner compromises on a state budget, he’s demanding lawmakers agree to his “Turnaround Agenda,” a misnamed list of changes ranging from limiting settlements judges and juries can award in lawsuits to restricting workers compensation protections. In the mix is his bid to abolish prevailing-wage laws

Eliminating or even weakening prevailing wage laws (PWLs) would lower wages, worsen job safety and hurt local economies – all without saving any money.

PWLs require local governments – municipalities, counties, school districts, etc. – to pay the prevailing wages in that county on taxpayer-funded building projects. In Illinois, the state Department of Labor updates the figures monthly. It’s designed to ensure that taxpayers’ funds aren’t used in ways leading to inferior wage levels, deteriorating local standards of living, workers from outside the areas getting local jobs, cost overruns, or worse.

It’s a brake on a race to the bottom, and we need to sometimes check that brake, for economic safety’s sake.

Rauner basically wants to cut the brake line.

If he browbeats the legislature to kill PWLs, “Look out below!”

Multiple studies have shown that prevailing-wage projects are not more expensive. The Federal Highway Administration, Pennsylvania’s Keystone Research Center, and a Colorado analysis of highway construction projects all demonstrate that prevailing wage has no negative cost impact.

In fact, PWLs have the opposite, positive effect, according to “Why Prevailing Wage Laws are the Best Deal for Taxpayers,” a report co-authored last year by Frank Manzo IV, policy director of the Midwest Economic Policy Institute.

“A PWL keeps construction costs down by promoting a high-skilled, high-quality construction workforce that completes jobs on time, the first time,” wrote Manzo and colleague LeNee Carroll, director of policy research at Building Strong Communities. “A PWL also supports in-state contractors and builds local middle-class jobs while driving economic development.

“Ultimately, prevailing wage laws protect worker incomes and raise tax revenues while reducing reliance on government assistance,” the report says. “Prevailing-wage laws should be enacted or strengthened in states across America to protect the middle class and support strong budgets at no additional expense to the taxpayer.”

Research has shown that better pay actually increases productivity and encourages employers to help fund apprenticeships that in turn provide a more skilled, stable work force. That’s better than pre-PWL days, when public-works projects attracted contractors into a region from far away, employers who’d undercut local wages and benefits – and hurt the standard of living there.

Ignoring research, Rauner’s claimed that if PWLs are repealed, projects would save one-fourth of construction costs – an assertion Manzo called “false.”

So why would Rauner and his Big Business backers continue to push for repeal?

It’s another attack on unions, whose presence raises compensation in areas for workers (union or nonunion).

So resisting such a destructive “turnaround agenda” will depend on rank-and-file appreciation for existing standards, including PWLs, workers compensation and the right to sue for wrongdoing, from product liability to personal injury.

Today, every county and every craft benefit from prevailing wage because it sets a standard of wages and benefits for public works, which then naturally extends into the private sector, elevating the standard of living for the workers who spend their earnings in their communities.

Repealing PWLs, Keystone’s research shows, could lead to less workforce training; a younger, less educated and less experienced workforce; higher injury rates; lower wages; and lower health and pension coverage.

According to Manzo, killing PWLs decreases productivity by more than 10 percent; wages also fall more than 10 percent. Without decent pay, more workers would be closer to needing welfare programs, costing taxpayers more money. In Illinois, such consequences would result in 3,300 lost jobs, $44 million less revenue and $1 billion in lost economic output. Local skilled workers would be tempted to relocate to one of the dozens of states that have PWLs.

Workers with less training result in higher-cost, lower-quality and more dangerous work sites. Killing PWLs would reduce city, state and federal income-tax receipts, reduce the economic impact from public projects, and diminish the standard of living statewide.

Whether on the job site or in the Capitol, vigilance in defending PWLs is necessary. Watch out.

[PICTURED: Illustration from PR Watch.]