Recently, with encouragement from the County Executive, Tom Gordon,
the New Castle County Council voted 7 to 6 against using a $100,000
contribution from the Friends of Rockwood to renovate the county-owned
Rockwood Mansion. The argument was that such construction repairs should
be subject to Delaware's prevailing wage system.
That argument is flawed for two reasons.
First, the argument doesn't coincide with state law. Second, the
current Delaware prevailing wage system is methodologically flawed,
redundant, a waste to taxpayers, and improper use of tax funds.
First, under Delaware's statutes, prevailing rates must be paid on
new construction projects costing more than $100,000 and on alteration,
repair, renovation, rehabilitation, demolition or reconstruction
projects costing more than $15,000. For a project to be covered by the
law, the State or any subdivision thereof must be a party to the public
works contract; and, the State must have appropriated any part of the
funds.
Because the Rockwood Mansion is county-owned, it is fair to say
that the County is a party to any works contract. It is false to claim
in this instance, however, that the County has appropriated any part of
the funds.
Second, two years ago, funded by a foundation grant, CRI conducted a
thorough analysis of Delaware's prevailing wage system's methodology.
The CRI research
(http://www.caesarrodney.org/index.cfm?ref=28200&ref2=1) found that
the prevailing wage methodology conducted by the Delaware Department of
Labor was seriously flawed and over stated construction wages by
occupation in Delaware by an average of 40%. Currently, for example, the
prevailing wage for a carpenter working in New Castle County is $50.06,
a painter is $42.02, and a laborer $38.30.
Using Delaware’s FY-11 capital budget, the research estimated
construction savings from paying market construction wages would be
approximately $19 million for school projects, $96 million for
transportation projects, and $135 million overall. The funds saved could
have been used to generate more capital improvements resulting in more
construction output, a lower unemployment rate for construction workers,
and less strain on Delaware’s unemployment fund.
To add insult to injury, every six months under a Federal contract
with the U.S. Bureau of Labor Statistics, the Delaware Department of
Labor systematically collects detailed construction occupational wage
data (the Occupational Employment Statistics survey).
Shifting to the OES survey data would save money and staff time for
Delaware’s Department of Labor while improving data quality. Compared
to the Delaware prevailing wage survey data, the OES has substantially
less sample design and response bias, a larger sample size, and fewer
methodological errors. Moreover, Delaware taxpayers foot the bill for
the state’s prevailing wage survey each year, while the U.S. Bureau of
Labor Statistics pays Delaware to conduct the OES survey.
Why then this strange vote by the NCC Council? The most obvious
explanation would be pressure from the unions. According to the latest
data from the U.S. Bureau of Labor Statistics, just over 10% of
Delaware's workers are union members, with only 2% of private sector
workers being union members.
The Delaware economy is in a slump, and especially the construction
industry. It its latest budget, NCC County government projects four
straight years of operating deficits. These realities make the position
of the County on the generous gift from the Rockwood Mansion Friends
even more difficult to understand.
Dr. John E. Stapleford, Director
Center for Economics and Policy Analysis
SOURCE: http://caesarrodney.org/index.cfm?ref=30200&ref2=408
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