Repealing Prevailing Wage Would Save Schools and Taxpayers Money

Sen. Mike Brubaker this week introduced S.B. 695, proposing a three-year moratorium on the application of Pennsylvania’s prevailing wage law to school construction projects. The Pennsylvania School Board Association (PSBA) recommended this policy solution earlier this year to reduce the heavy burden the law places on schools. According to Brubaker, “This moratorium would ultimately allow local governments and school districts to address urgent construction needs at the lowest cost to the public.â”

The state’s current prevailing wage law mandates all public construction projects to pay workers the rates that “prevail”? in each region. However, the Department of Labor simply sets prevailing wage rates equal to union rates, despite the fact that only 20 percent of Pennsylvania construction workers are members of unions. These wages are, on average, 37 percent higher than the average market wages in the state.

Using estimates from the PSBA, exempting school construction would have saved $375 million from 2002-2006 or $75.2 million per year. Assuming construction spending increased at the same rate as overall spending, repealing the prevailing wage law altogether would save taxpayers $1.34 billion each year on public construction projects. Repealing this law would erase approximately half of the state’s budget deficit.

Click here for a related article on union prevailing wage manipulation.