Published: April 19, 2008 09:47 pm         

Being open for business vs. open for favors

Opinion

Open for business is not the slogan of the West Virginia Division of Labor. The DOL is open for favors. The DOL distributes cookies and ice cream to a few favored at the expense of most workers and certainly the West Virginia taxpayers.

The DOL costs the state of West Virginia at least $150 million a year on the more than $1 billion public works projects. DOL’s setting the prevailing wage is the cookie jar.

An excellent example stares us in the face. “Highway Crisis” was headlined in The Register-Herald’s editorial on April 8. The West Virginia Division of Highways has daunting tasks that include a most rugged terrain for creating roads, new traffic patterns emerging that require new road alignments, older roads that must be maintained and a constrained budget to mention but a few items.

A recent review of the DOH Web site showed $602 million of road construction and road maintenance for 2007. A breakdown of costs indicates that approximately one-third, $200 million, went to workers and two-thirds for materials. All of this labor cost comes under the prevailing wage laws of West Virginia.

These prevailing wages set by the West Virginia Division of Labor are not the common sense notion of prevailing wage, but rather organized labor’s rates. These rates are in the top 10 percent of wages paid in the industry and represent less than one-fifth of the workers — the favored few (data from U.S. Department of Labor, 2007). Added to these wages are fringe benefits that are enormous, ranging from 41 percent to 67 percent of the base salary.

Let me calculate for two classifications of workers. The DOL prevailing wage for an electrician in many counties in West Virginia is $28.02 per hour with a fringe of $17.69 per hour. The fringe includes $5 per hour for vacation. This wage and fringe computes out to an annual salary of $95,000, including a $10,000 vacation bonus. Ironworkers in the heavy highway industry receive a pay and a fringe that gives them $100,000 per year.

A true prevailing wage would be a median wage, a midpoint of all wages of any one classification. This midpoint would also include data from union contracts. Fringe benefits, which certainly include medical benefits, are reasonable at 33 percent of the base.

The West Virginia Department of Commerce has scientifically worked out what a median wage would be, and the result is illuminating. It is 50 percent less than the prevailing wage gratuitously determined by the DOL. A 2008 study by the Beacon Hill Institute for Public Policy Research speaks about the expansive prevailing wages in many states as a “costly welfare system for union workers.”

Organized labor has done immense good in so many areas, but this prevailing wage system in West Virginia is one that has gotten out of hand. The DOL, for more than 15 years, has simply ignored 80 percent of the workforce of West Virginia and used organized labor’s rates to set the prevailing wage rate. This is dishonest, disenfranchises the vast majority of workers, gives a bonus wage to the favored few and harms the taxpayers of the state.

A true prevailing wage would significantly address the highway crisis. As much as $75 million would be saved each year and could be utilized for additional maintenance and construction. All laborers, not just the organized labor workers, would benefit.

These same considerations apply to better use of dollars for the West Virginia School Building Authority, the West Virginia National Guard, all the public colleges and universities, every city of West Virginia and all the counties.

It is time to insist that the West Virginia Division of Labor be mandated by the executive branch and by the Legislature to set an honest prevailing wage that represents not simply organized labor’s wage scales but the other 80 percent of the workers in West Virginia.

— Father Thomas S. Acker, S.J., is executive director of Forward Southern West Virginia.