I am William J. Skinner, a resident of Montgomery County, Maryland for almost 30 years and president of the Maryland Taxpayers Association for the last four years.
Today, I represent the Board of the Taxpayers Association which has been on record for repeal of the Prevailing Wage laws for as long as I have been on the Board of Directors, about six years, and was in favor or repeal even before then.
As we see the matter, Prevailing Wage really "sticks it to the Taxpayers," by causing us to build fewer projects than our money could otherwise buy or by causing us to pay premium prices for union wages. We do not buy the arguments that government buildings can only be built by Davis-Bacon, Labor Department Wages, or by Maryland Prevailing Wages and that these wages are necessary to support low-income construction tradesmen and women in Maryland. These arguments, made by proponents of H.B. 288 for more Prevailing Wage amendments, including the Governor, are ludicrous.
These arguments do not meet the test of veracity that the people of this State expect in our laws. The arguments are hollow arguments designed only to disguise the transfer of a percentage of construction funds to special interest groups, and the fact that our current Governor is the chief proponent of H.B. 288, indicates that this is a direct payback for the last or the next election. H.B. 288 represents the raw politics of the spoils system. It is not good government. It is not decent government.
Besides these unfortunate attributes of this legislation, there are even more compelling reasons to not pass H.B. 288 and to pass H.B.819. For example:
Prevailing Wage laws significantly decrease minority hires in the construction industry. University of Baltimore professor A. J. Thieblot found that black employment in construction was 13% in states not having a Prevailing Wage law and only 5.8% in states with such a law. Overall, blacks are on the average 18.7% of all construction employees, but in states like H.B. 288 proposes Maryland should become, the blacks account for on 8.1% of jobs.
The 20/20 television review of the 1931 Davis-Bacon law said that that law was passed to prevent blacks from underbidding whites for Federal construction contracts. Do we really want to perpetuate this system of preferences?
Prevailing Wage laws increase the cost of construction by as much as 20%. MTA has used a lower figure of 10% in our past statements to the Legislature, but there is no justification in the quality of the buildings built with the Prevailing Wage that justifies the extra expense. 20/20’s review pointed out that 75 per cent of all building construction in the United States is done without application of a Prevailing Wage law. The Baltimore Sun, February 15, 2000, says 80 percent of the construction is now done on non-union contracts. How can you assume that only Prevailing Wage’s will result in a quality building? Don’t you know or realize that buildings all over the State of Maryland are built that are of better quality than government buildings?
Prevailing Wages law hurt Maryland children and Maryland families – the Taxpayers. We Taxpayers are already entitled to be called "Quasi-Slaves" according to talk show host Michael Medved as reported in the Investors Business Daily newspaper last month. Medved says we deserve this title since we sent 40 percent of our income to government and we send our spouse off to work to get extra income to take care of the children.
Few of us are pleased with the progress of our children, especially the minority children in Baltimore City and Prince George’s County. We would like to have as many buildings as we can reasonably build with our taxes for these children, as well as a rejuvenated and trained teacher corps to get our education back on mainstream activities. Paying Prevailing Wages to construction workers who question the government’s sanity, leads to teachers who demand to work less for higher salaries, as they seek parity in government’s treatment of various union factions.
Prevailing Wage laws applied to elementary and secondary schools will prevent building 10 to 20 percent of the buildings we need now.
Prevailing Wage laws seem to allow many Pennsylvania and West Virginia workers to find campsites in Maryland parks in order to work on Maryland’s lucrative road projects. How many Maryland low-income people have ever been employed because of the Prevailing Wage laws? Probably few.
At the Federal level, apprentices cannot be hired to work on renovation of low-income housing projects, unless they are enrolled in a government run and government sponsored training program – a program that almost guarantees restrictions, and job training failures.
Prevailing Wage laws are perverse in their application, causing urban wages to be applied to rural construction projects, and then forcing contractors to go out of state to find workers to do the jobs.
The Prevailing Wage law system is one of make-work, bureaucratic largess that should be a target for elimination so that we can focus on getting school buildings up and open. H.B. 288 is based on the wrong set of priorities. H.B. 819 is the bill you should report favorably this year.
Maryland’s 1969 Prevailing Wage law was an antiquated relic at the time it was passed and made a part of the law of Maryland. It is not the State’s business to control the economy by setting wage rates and it is not the State’s business to make union contractors more competitive as was reported as an objective in the Department of Fiscal Services report in January 1989.
The most that could be said in 1989 about the quality argument is that the law "may" have an indirect influence on quality by enabling larger, unionized firms to compete effectively. What this report said between the lines to people who read financial newspapers everyday, is that there is no factual data to say Prevailing Wage does anything but support the union leadership who desire to have more union members. And the report concluded "It is unlikely that prevailing wage policies influence the quality of highway construction, as they appear to demonstrate little influence over the highway industry as a whole."
Maryland must step out of the darkness and into the light before it is too late. We need to work for our children’s education now, not simply create as much debt for over priced buildings for them to pay for when they go to work 15 or more years from now.
MTA asks that this committee not recommend H.B. 288 except defeat, but that you favorably forward H.B. 819 to the House as the best choice on state construction financing this session.
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The Maryland Taxpayers Association is a non-profit, non-partisan organization, formed in 1990, to work toward educating the General Assembly and the public on tax issues, so that spending, waste, and taxes by state and local government may be reduced. Our Board meets next on March 18, 2000, 10:00 A.M. at the Ferndale-Linthicum Senior Center on Md. Rt. 648 south of the Baltimore Beltway. The public is invited to attend.
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