The free market sets "prevailing wages" every day, far more efficiently than any Commissar of Labor ever could.
If a tavern owner advertises a barkeeping job at $7 an hour but finds no competent applicant, the owner will offer $9 an hour, and then $11, till he attracts a good candidate.
But under an economic system in which government undertakes to (start ital)dictate(end ital) wages -- the kind of system that kept wages from falling in the early 1930s, thus (according to economic historian Murray Rothbard) turning a minor economic correction into The Great Depression -- "prevailing wage" comes to mean something very different.
State prevailing wage laws are often called "Little Davis-Bacon Acts," after the federal law on which they're based.
Upset that the policy of awarding federal contracts to the low bidder had allowed "bootleg" southern labor to build a veterans hospital in his district in the 1920s, Long Island Congressman Robert L. Bacon and other sponsors specifically stated a major purpose of their 1931 federal bill was to block "cheap colored labor" from taking jobs from local white workers.
The result would be costly and racist even if these schemes worked as intended. But do they?
In Nevada, only about 20 percent of contractors participate in the annual state poll designed to determine and set "prevailing wages," since participation means revealing information which competitors can then use to formulate lower bids.
Instead, the state survey forms are often filled out by labor unions "assisting" the contractors with whom they have contracts. So, higher union wages tend to be over-represented.
Bad enough, if a, accurate and representative sampling is the goal. But -- as revealed in a copyright story by A.D. Hopkins in the March 24 Review-Journal -- the mandatory minimum wages published by the Nevada state Labor Commissioner can't even be justified by the commissioner's own surveys, in some cases requiring contractors to pay as much as $13.69 per hour (start ital)above(end ital) the highest real wages reported for the labor specialty in question, during the previous year.
Although the overwhelming majority of hours reported for elevator constructors in Clark County in 1998 were paid at $38 per hour -- and the highest wage reported was $45.46 -- the Labor Commissioner last October ordered contractors to pay a "prevailing wage" for that specialty of $51.17. No plumbing foreman was paid more than $40.86, yet the Labor Commissioner determined the minimum "prevailing wage" to be paid by all government contractors under penalty of fine this year would be ... $43.61.
In other words, the process by which Nevada's "prevailing wages" are set is a fraud. Yet State Labor Commissioner Terry Johnson, who has no explanation for the disparities, vows to continue enforcing the current mandates!
This would be bad enough if these were "one time" errors. But now these erroneous "prevailing wages" -- apparently dreamed up out of thin air -- become the (start ital)actual(end ital) wages which must be paid under penalty of law, and so will be factored into the (start ital)following(end ital) year's wage mandates.
Nevada's prevailing wage law is being violated. The errors should be corrected immediately. The state attorney general should then investigate whether such a huge pattern of errors could truly be "honest mistakes," or whether those who made these errors, and some who stood to gain from them, may have entered into criminal collusion.
But finally, the lesson here is that bureaucrats and politicians in search of campaign cash cannot be trusted to decide - or to appoint a political flunky to decide - what a contractor should pay a well driller or a sprinkler fitter.
Assemblyman Bob Beers, R-Las Vegas, now asks whether Nevada needs a prevailing wage law at all.
Assemblyman Beers is correct. The only long-term solution is to repeal these "prevailing wage" laws, entirely.
Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. His book, "Send in the Waco Killers: Essays on the Freedom Movement, 1993-1998," is available at $24.95 postpaid by dialing 1-800-244-2224; or via web site http://www.thespiritof76.com/wacokillers.html.
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Vin Suprynowicz, vin@lvrj.com
"The evils of tyranny are rarely seen but by him who resists it." -- John Hay, 1872
"The whole aim of practical politics is to keep the populace alarmed -- and thus clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken
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