Sunday, February 22, 2009

Separate but Equal: State employees and the prevailing wage law

Speaking as someone who would be directly affected by any cuts to State worker benefits, I have absolutely no problem with Governor Jack Markell's plan, as long as it is tied to dumping the prevailing wage requirement for State construction jobs.

The LEAD report estimates that eliminating the prevailing wage requirement just for school construction would save the State $21-34 million dollars annually.

This is almost exactly equivalent to the $30 million saved by doubling State worker premiums for healthcare insurance (on workers who average $41 K annually, which is almost exactly the average per capita income for DE residents).

But let's see if our liberal and progressive friends are willing to accept the idea that union construction workers should share just as much of the pain as State employees.


Delaware Watch said...

If the LEAD study is based on the Ohio study (which I seem to recall it is), then the prevailing wage analysis is in tatters. See the refutation of it here:

You can also hear an audio interview I did w/ Prof. Weisburg here:

Steve Newton said...

The analysis in the document you cite is indicative more of a disagreement among statisticians who differ on the use and interpretation of regression analysis and the uses thereof than it is of a major problem with the Ohio study. In other words, there are two camps on statistical regression--the Ohio study authors belong to one and the author of this study belongs to another.

That said, the Weisburg rejoinder raises significant questions about the Ohio study, but is not definitive.

Anonymous said...

What prevailing wage does most is REDUCE jobs. If the same amount of money was spent on labor at a straight union wage there would be an additional 15-20% more jobs.