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Friday, August 14, 2009

Pennsylvania plans to build four new prisons in coming years. Associated Builders and Contractors (ABC) were originally assured that the prisons contracts would not utilize project labor agreements (PLAs), effectively prohibiting nonunion contractors form working on the projects. However, strong lobbying by labor unions influenced the Pennsylvania Department of General Services to reverse their promise.

Even without a PLA, Pennsylvania's outdated prevailing wage law makes it difficult for nonunion contractors to receive large, government contracts. The Keystone Research Center (a union-funded think tank) supports the use of project labor agreements. According to its labor economist, Mark Price:

The work requires a broader range of training. The union sector succeeds in tracking people into the industry and training them.
This statement flies in the face of evidence in Ohio and Kentucky where prevailing wage laws were overturned for school projects, and over 95% of school districts found improvements or no change in construction quality for nonunion contractors. Additionally, studies have found that construction workers in market wage states are 6.3% more productive than workers in prevailing wage states. Since wages are directly related to productivity, prevailing wage laws are counterproductive.

For example, the International Brotherhood of Electrical Workers Local 102 is picketing the construction site of a Giant food store because their nonunion contractor is not paying prevailing wages (i.e. union wages). However, only projects receiving state government funding are required to pay prevailing wages. In Monroe County, the prevailing wage for electricians is 127.04% higher than the market wage. It is no wonder a nonunion contractor won the contract.

Returning to the prison contracts, the total estimated cost to taxpayers for the four prisons comes to $800 million. If Pennsylvania repealed the state prevailing wage law, taxpayers would save a significant amount of money on the contracts. For the two prisons in Montgomery County, the estimated cost comes to $400 million. Market wages would reduce the cost by 15.58% or $62,320,000.

The Forest and Centre County prisons are expected to each cost $200 million. Prevailing wages inflate the cost of the Forest County prison by 14.29% ($28,580,000) and the Centre County prison by 17.78% ($35,560,000).

Pennsylvania's prevailing wage law inflates the total cost for the four prisons by 15.81% or $126,460,000.

Posted by Eleutherian

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