Prevailing wage is devastating to public works construction in West Virginia. A prevailing wage must be paid to all employees of a public works, including highways, school projects, city or county buildings, water and sewer projects, etc., which is supported by state or federal funds.
In West Virginia this prevailing wage is determined by a survey taken by the state Department of Labor. The federal Davis Bacon Act, enacted in 1931, applies to all federal contracts in excess of $2,000. In West Virginia there is no such exemption for small contracts. Thirty-two states, including West Virginia, have what is known as little Davis-Bacon Acts.
While the W.Va. Commissioner of Labor is responsible for setting the prevailing wage in each county, there is no specified methodology that should be used to determine the wage rate. In practice, prevailing wage rates are set by survey taken of employers both union and non-union.
When the Labor Department's survey is presented to employers throughout the state, most small independent business owners fail to respond. For that reason most of the data collected are from union respondents.
Also, for that reason, prevailing wage has come to be known as a code word for "union wages." So that while a vast majority of respondents to the survey are unions, they make up only 16 percent of the workforce in the United States.
Because of union-closed shops and seniority rules it is next to impossible for a non-union person to become employed. A recent survey by Fraundorf, Ferrell and Mason said construction projects under prevailing wage laws were 30 percent more expensive than they otherwise would be.
Comparing average true wages with the average mandated prevailing wage shows many discrepancies.
For instance, the FFM survey showed that the average mandated prevailing wage for brick and blockmasons was $25.84 per hour, a full $10 per hour more than the average true market wage, an increase of nearly 70 percent. For drywall and ceiling tile installers, the $25.16 mandated prevailing wage is nearly 98 percent higher than the average adjusted true wage. For roofers, its 141 percent higher.
For all occupations, the adjusted difference between prevailing wage and true market wages are 73.61 percent higher.
A recent study by Andrea M. Dean for the Public Policy Foundation of West Virginia University said "The current survey methods for determining the prevailing wage rates clearly do not reflect accurate information on the true overall market wages.
"Current mandated prevailing wage rates in West Virginia are simply not accurate reflections of prevailing market wage rates in the W.Va. labor market.
"The survey methodology used to collect information on market wages is widely inaccurate — over estimating the market wages by somewhere between 49 and 74 percent. The inaccuracies are the largest in the lowest wage groups."
Deem, owner of J. Frank Deem Oil & Gas in Parkersburg, served 30 years in the Legislature.