Updates

March 25, 2019
25 Mar 2019

Political Update – March 19, 2019

 

The prevailing wage is a rip off. Here are the numbers to prove it. 

Victor Joecks
Las Vegas Review-Journal

March 12, 2019

CARSON CITY — For decades, fiscal watchdogs have contended that prevailing wage mandates increase infrastructure costs. Now Nevada governments are saying the same thing.

When a private company embarks upon a major capital project, it solicits bids. Its goal is to find someone who will meet its construction standards at the best price. It doesn’t care if a company uses fewer higher paid workers or more lower paid workers. It’s just interested in the bottom line.

Not so in government. Nevada government requires that the workers on most government construction projects receive union-wage rates, called the prevailing wage. A Nevada Policy Research Institute study found that those wage rates are around 45 percent higher than market rates.

This doesn’t make economic sense for taxpayers, which is why Republicans passed a bill during the 2015 session that modified Nevada’s prevailing wage law. They raised the threshold at which prevailing wage requirements were triggered for public projects from $100,000 to $250,000. They also allowed school districts and colleges to pay 90 percent of the prevailing wage. It would have been preferable for Republicans to have eliminated the prevailing wage altogether, but, alas, former Gov. Brian Sandoval should have done a lot of things differently.

Now Democrats are seeking to overturn even those minor reforms. Every Assembly Democrat is co-sponsoring Assembly Bill 136. It would lower the prevailing wage threshold from $250,000 to $100,000 and require schools, colleges and charter schools to pay the full prevailing wage. The bill came out of committee on Monday.

Requiring higher wages for construction projects increases costs. That’s obvious to anyone not receiving union campaign contributions. It’s also the conclusion of numerous government agencies that looked at how this would affect their budgets. The Clark County School District projects the changes will cost it $7.5 million a year. The Nevada System of Higher Education estimates an extra $9 million a year in expenses.

That’s just the cost of raising the prevailing wage from 90 percent to 100 percent. The NPRI study found the market wage rate is 69 percent of the prevailing wage rate. If it had been legal for the school district to pay the market wage rate, it would have had an extra $15 million a year to spend on construction. Nevada’s higher education institutions would have had an extra $18 million a year. Both numbers are compared to paying 90 percent of the prevailing wage, not the 100 percent Democrats prefer.

*NEW*

Quote of
the week

 


Quote:

To get a sense of just how inflated these [prevailing wage] mandated rates are, NPRI analyzed the 2017 prevailing wage rates for 14 job categories in Clark County, which accounted for more than half of all construction employment that year.

The prevailing wage ranged from 14 percent above the market wage for roofers, to a staggering 109 percent above the market wage for glaziers. On a weighted basis, the average Clark County prevailing wage was 56 percent greater than the market wage.

Robert Fellner
Nevada Policy Research Institute
March 11, 2019

Support for prevailing wage undermines Dem opposition to Opportunity Scholarships

Robert Fellner
Nevada Policy Research Institute

March 11, 2019

…Specifically, Assembly Democrats recently introduced AB 136, which schools estimate will cost them $25 million over the next biennium. If the fiscal note from NSHE is included, that amount rises to $43.5 million.

This added cost reflects AB 136’s increase in the so-called “prevailing wage” requirement, which mandates that union workers be paid significantly above-market rates when working on school construction projects.

To get a sense of just how inflated these mandated rates are, NPRI analyzed the 2017 prevailing wage rates for 14 job categories in Clark County, which accounted for more than half of all construction employment that year.

The prevailing wage ranged from 14 percent above the market wage for roofers, to a staggering 109 percent above the market wage for glaziers. On a weighted basis, the average Clark County prevailing wage was 56 percent greater than the market wage.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
Click here to unsubscribe 
Having trouble viewing this e-mail? View it in your browser