Union Pay Rules in Construction Draw Fire

The Wall Street Journal reports:

"Prevailing wage artificially inflates the cost of labor construction in the public sector," said Bryan Williams, director of government affairs at the Ohio chapter of Associated Builders and Contractors, a trade group that backs bills curbing the rates.

Prevailing-wage rules have also come under fire at the federal level. Republicans have introduced bills to repeal the Davis-Bacon Act, which requires prevailing wages on construction projects that receive more than $2,000 in federal funding. At a House committee hearing Thursday, opponents of the law said it has inflated construction wages and hindered economic growth.

Prevailing-wage rates, which include benefits, are typically set by a state agency or county committee. They are often based on recent labor contracts for unions, which typically have higher-than-market-based rates.

For example, the prevailing wage for a skilled carpenter on a road project this year in Howard County, Ind., is $36.18 an hour, including base pay of $24.13 an hour and fringe benefits of $12.05, according to the state Labor Department. The state chapter of the ABC said the comparable nonunion rate is $25.75 an hour, including base pay of $20 an hour and $5.75 in benefits.

A lot of money.