Democrats’ plan to save money: Increase costs
If they weren’t spending our money, it’d be hilarious to watch legislative Democrats argue that paying higher prices is a cost-savings measure.
It’s like telling your broke cousin the key to saving money is buying name brands, not generics.
Yet there was Assemblyman Chris Brooks, D-Las Vegas, on Wednesday making that argument. He’s the sponsor of AB154, which would require schools to pay full prevailing-wage rates, which are usually inflated union-wage rates, for construction projects.
A study from my old colleagues at the Nevada Policy Research Institute found that in Nevada prevailing-wage rates are around 45 percent higher than market wages. In just 2009 and 2010, the prevailing wage cost Nevada taxpayers almost $1 billion.
Early in the 2015 legislative session, Republicans repealed the requirement that schools pay prevailing-wage rates in combination with a constitutionally dubious 10-year authorization for new bonding. In a colossal capitulation to Democrats, Republican leaders from Gov. Brian Sandoval to then-Senate Majority Leader Michael Roberson to then-Assembly Majority Leader Paul Anderson pushed through a bill in the waning moments of the 2015 session that forced schools to pay 90 percent of the prevailing wage.
Even though schools are paying inflated wages, unions want more, which led to politicians making claims like this:
“Prevailing wage does not raise overall construction costs, since higher construction wages are usually offset by greater productivity, better technologies and other employer savings,” said Brooks while testifying for AB154.
Notice his use of weasel words — “usually offset” — a needed caveat, because he’s arguing that spending more lowers costs.
Fortunately, we don’t have to take Brooks’ or anyone else’s word for it. In 2015, the Clark County School District put a project for K.O. Knudson Middle School out to bid when there was no requirement to pay the prevailing wage. The low bid was $2.7 million. Before the CCSD awarded the contract, politicians changed the law to require bidders pay their employees 90 percent of the prevailing wage. As Associated Builders and Contractors lobbyist Warren Hardy II uncovered, the new low bid for the project was $3.6 million — a 33 percent increase.
The only good news is that Sandoval’s veto pen is ready.
“In its current form, AB154 would repeal a bipartisan compromise from last session which has made building schools and public buildings less expensive while maintaining fair wages for those projects,” said Mari St. Martin, Sandoval’s communications director.
Yes, requiring government to pay higher wages increases costs. Who knew?
Victor Joecks’ column appears in the Nevada section each Monday, Wednesday and Friday. Contact him at vjoecks@reviewjournal.com. Follow @victorjoecks on Twitter.