Today’s topic is another way that Illinois fleeces its taxpayers: the “prevailing wage.”
Once upon a time people sold their labor for what the market would bear. Not surprisingly, that resulted in many inequities sometimes manifested in what were called “slave” wages. But it also spurred the creation of guilds and trade unions that eventually expanded beyond the conventional trades into the labor unions we know today.
Those unions have been responsible for virtually every benefit working people enjoy today, including the minimum wage, the 40-hour work week, vacation and sick days, etc. In short, unions succeeded in “better[ing] the standards of life for all who work for wages and…seek[ing] decency and justice and dignity for all Americans,” as AFL-CIO president George Meany described it back in the 1950s.
In the free market, profit-driven real world of the private sector, union demands were moderated by market forces that generally tied increases in wages and/or benefits to increases in productivity and profits. Private-sector unions developed a realistic view of the interdependence of labor and capital, which kept their members’ labor profitable and competitive – at least until globalization re-introduced the concept of slave wages.
Not so in the monopolistic, profit-free fantasyland of the public sector. There unions and politicians eagerly colluded – the former trading their political support of the latter in return for the latter’s loosening of the public purse-strings whenever it came to the former’s wages and benefits.
All at the taxpayers’ expense, of course.
Which is why the very same George Meany also said that although “[t]he main function of American trade unions is collective bargaining…[i]t is impossible to bargain collectively with the government” because governmental units have no profits in which labor can share. That means every wage or benefit increase comes not out of the value created by that labor (a/k/a, “profits”) but directly – and by the force of our tax laws – out of the taxpayers’ pockets.
Which brings us to the prevailing wage.
In this state of corruption known as Illinois, local governments hiring outside contractors are required by state law to pay those contractors the prevailing wage for such services in the county where the service is to be performed. Thanks to that union/politician collusion, the prevailing wage has been conveniently calculated (by the Democrat-dominated Illinois Department of Labor) to approximate union scale, even though much/most of such labor is done by non-union workers paid significantly less than union scale.
The result: government (a/k/a the taxpayers) ends up paying the highest labor rates instead of the lowest, or instead of even a blended rate of union and non-union wages. Which means tens and often hundreds of thousands of extra taxpayer dollars are unnecessarily spent on individual public projects – often at the expense of better quality materials or additional features in order to meet project budgets.
In the cock-eyed view of the Democrat-dominated Illinois General Assembly, the prevailing wage law ostensibly endeavors to mandate a “level playing field” that ends up reducing, if not eliminating, competition for the lowest bid. Indeed, under prevailing wage, non-union contractors who normally operate with lower overhead/labor costs are forced to artifically inflate their employees’ wages to the same level as their unionized competitors, thus taking away any potential competitive advantage that a non-union shop might have over a union shop.
As usual, the taxpayers are the losers.
A 2014 study by the Anderson Economic Group, LLC for the Illinois Chapter of the Associated Builders and Contractors concluded that from 2002 through 2011, Illinois public schools spent approximately $29 billion on construction and repair projects; and that the prevailing wage ended up costing taxpayers an estimated $1.6 billion in extraordinary and unnecessary wages and benefits.
But at the June 16 meeting of the Park Ridge Park District Board, three Commissioners – Rick Biagi, Jim O’Brien and Mel Thillens – tried to do something about that. They just said “no,” arguing against the adoption of the Dept. of Labor’s skewed prevailing wage numbers. And they were joined by Commissioner Dick Brandt in out-voting “progressive” Commissioners Joan Bende, Cindy Grau and Jim Phillips.
That victory, however, was short-lived.
Just as soon as the dust settled on that vote, the District’s long-time attorney, Tom Hoffman, began issuing dire warnings about the potential litigation the District might face from either the Illinois Attorney General – whose daddy, Dark Lord of the Sith “Darth” Madigan, presumably has the prevailing wage law engraved on a stone tablet along with his other nine commandments of graft and corruption – or some of the affected unions.
Despite clearly being torqued-off by the prevailing wage costs, O’Brien promptly backed down, explaining that he didn’t want to cause the District to incur legal fees defending itself against such litigation. And Brandt followed suit, with only Biagi and Thillens holding their ground.
Defeat was snatched from the jaws of victory.
We are the last folks to suggest that any unit of government expose its taxpayers to frivolous and expensive litigation. But from what we understand about the prevailing wage law, it seems both arbitrary and anti-competitive – an exercise in political pandering that apparently has survived primarily because of the cowardice and/or stupidity of public officials who have been afraid to challenge it.
Perhaps the Park Board will try again next year to challenge the prevailing wage, only a little more aggressively.
Meanwhile, we pose the following question to Commissioners Bende, Brandt, Grau, O’Brien and Phillips:
How many hundreds of thousands of taxpayer dollars did you waste, WASTE, because of the prevailing wage, on labor costs for the Park District’s $8 million Centennial Water Park and it’s $13 million Prospect Park?
Can you say “penny wise and pound foolish,” Commissioners?
We didn’t think so.
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