Thomas E. Perez: Prevailing wage lifts workers, sets example for employers
Any government — federal, state or local — is a big purchaser of goods and services. Governments should use that purchasing power to lift up workers and set an example for employers. Living wage and prevailing wage laws do just that.
Montgomery County took an important step toward lifting workers up by passing a prevailing wage law that requires construction contractors who are awarded county contracts to pay their workers the amount typically paid for similar work in the local labor market.
With this bill's passage, Montgomery County is upholding the longstanding Maryland tradition of leadership in recognizing that an honest day's work deserves a decent day's pay. Maryland has had a prevailing wage law for decades, and last year Gov. Martin O'Malley signed the first ever statewide living wage statute, requiring contractors that do business with the state to pay workers a decent, livable wage.
County officials should be applauded for seeing through the empty arguments that the law will drive up costs for public construction. They should be applauded for recognizing that opponents of prevailing wage laws, living wage laws and most other wage laws cry wolf — they consistently claim that such laws will drive up costs for governments, drive businesses out of the state or lead to increased unemployment. A Sept. 3 commentary, "Prevailing wages: Bridge to nowhere," argued that the prevailing wage would inflate construction costs for the county.
And yet study after study of prevailing wage laws, many that have been on the books for decades, finds that the prevailing wage does not increase costs, and actually has benefits for governments and taxpayers in the form of increased quality and productivity.
A recent paper by the Economic Policy Institute attributed the lack of a link between the prevailing wage and increased costs to various factors, including the fact that in many cases, workers already earn the prevailing wage, and the statute is simply a way to ensure employers who do right by their workers are not underbid by those who do not.
Governments are in the business of safeguarding their people, of ensuring decent services and of improving people's lives wherever possible. In fiscal 2008, investigators at the Maryland Department of Labor, Licensing and Regulation recovered nearly $500,000 in wages owed to workers who had been underpaid under the prevailing wage law.
For the workers on behalf of whom those wages were recovered, that $500,000 represents the fairness and basic respect they deserve in return for the work they do. It will promise those employers who do right by their workers that they will not be underbid by employers who pay as little as they can get away with.
Thomas E. Perez, a Democrat from Takoma Park, is secretary of the state Department of Labor, Licensing and Regulation.