Every day we receive questions from our members regarding policy changes, member benefits, and everything in between. Lately, we’ve been getting a lot of questions on wage classifications and bidding. You may be wondering what prevailing wage has to do with the election, and the fact of the matter is, it has a lot to do with the election.
Issue: Prevailing wage requirements are often associated with publicly funded projects, but more often than not, we are hearing of privately funded projects requiring prevailing wages on a job. The Heritage Foundation (a think-tank in D.C.) estimated that the prevailing wage requirements in the stimulus package would inflate construction costs by $17 billion dollars – and this is why this has become a political issue – it has a major impact on the economy.
Impact: The President has the opportunity to take advantage of his executive power (think post-Katrina and the executive order to suspend prevailing wage requirements in the Gulf region, or the 2009 stimulus package (H.R. 1) that required the payment of Davis-Bacon prevailing wage rates for construction projects funded by the stimulus package).
Integrators will look at this as an economic issue as well. The question isn’t if it’s a requirement – but more so, of the classifications and the differences between paying the wage rate of an electrician versus an audio equipment technician or alarm system installer. In many states, there is a significant difference in the wage requirements for these occupations. This impacts your bottom line.
Our economy is hurting and we need jobs. How do you explain to your employees that you have two jobs, both are at schools involving sound and security installations, one is publicly funded, and the other is private? Employee A’s wages are $65/hour (publicly funded) and Employee B’s wages are $30/hour. You know it, I know it – they are doing the exact same job with the exact same products – but this additional cost is something we, the taxpayers pay for. So you could almost say you’re paying the employee twice – both out of your own pocket and out of your business’s pocket.
Previous reports have stated that by permanently suspending Davis-Bacon prevailing wage requirements, the economy would save more than $1 billion a year. That’s a lot of money that can be spent in other ways to further boost our economy rather than inflate wages.
In this circumstance, the prevailing wage topic isn’t about how to win the bid process or what classification you should use (but you can contact NSCA and we will be more than happy to help!) – this is about recognizing the impact such an outdated philosophy has on your bottom-line as a business and your own personal checking account.
How are your candidates looking at issues such as Davis Bacon, labor rates, labor unions and what are they going to do about it they are elected? Do they understand the economic impact of these issues?