When it comes to the cost of public works projects, wages are usually the biggest number on the bottom line.
Those labor costs loom especially large these days for cash-strapped governments building on the public dime. In many states, including Washington and Oregon, construction wages are based not on the low bid but on a formula-based rate known as the prevailing wage. In Washington, the concept is to establish a fair price based on local market conditions in each of the state’s 39 counties. The law requires cities and counties (or the companies they hire) to pay prevailing wages on public projects.
But critics say the price-setting mechanism generates project prices that are higher than those paid on non-government work and substantially raises the cost to taxpayers.
Changing the state’s decades-old prevailing wage law — by tweaking its price-setting mechanism to boost or diminish wages — is among topics being debated this legislative season. For some, the debate presents a microcosm of the economic and political issues playing out on the national stage, including immigration reform and public debt. Others see it as an example of profit-starved businesses trying to squeeze more revenue from the wages of workers emerging from a recession that left them with little clout in the workplace.