Kentucky: Prevailing Wage Laws Drive Up State Costs
According to a publication by The Heartland Institute:
Prevailing-wage laws added 7 percent--nearly $137 million--to the cost of government construction projects in Kentucky in 2002, the latest year for which figures are available, according to the nonpartisan Legislative Research Commission (LRC).
In 39 of the commonwealth's counties, federal prevailing-wage determinations are applied to government construction projects. The state's remaining 81 counties are divided into 20 prevailing-wage localities.
This formula for determining prevailing wages has distorted government-mandated wage rates for workers with similar skills, depending on where they work.
For example, while the Bureau of Labor Statistics (BLS) has determined the market-wage rate for Kentucky's plumbers is $18.15, state labor officials have established a rate of $23.75 for plumbers building schools in Owsley County and $26.31 for plumbers working on public projects in Oldham County.
The state Labor Cabinet uses the federal government's wage determination for Louisville, but sets its own rates in Lexington--even though both are medium-sized cities with a fairly large university.
Such a complicated approach to setting wage rates on government projects has resulted in almost no competition from nonunion contractors who need a more predictable system...click to continue.
