Labor

Maine’s prevailing wage law is expensive and outdated

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When Mainers pay their taxes, they fully expect their hard-earned dollars will be spent wisely and efficiently. However, outdated policies maintained by out-of-touch Augusta politicians prevent these wishes from being fulfilled. Each year, Maine recklessly spends its tax revenue by paying the inflated “prevailing wage” to workers on state-funded projects, a wage that exceeds the median wage determined by market forces.

Instead of choosing to award bids at the lowest cost and greatest value to Maine taxpayers, state government needlessly inflates the cost of government contracts through a self-imposed, burdensome prevailing wage policy. The prevailing wage serves as an artificial price floor that distorts competition and the free market.

Data from the Bureau of Labor Statistics and the Maine Department of Labor highlight a clear disparity between the median pay and the prevailing wage of many occupations. The median hourly wage of a carpenter in the Portland metropolitan area is $19.45 whereas the prevailing wage in Cumberland County is $23.00. Similarly, the median hourly wage for a light truck driver in Penobscot County is $13.16 while the prevailing wage is $17.00.

These clear and pronounced inequities are protected by special interests such as large labor unions who are determined to fill their own pockets at the expense of the broader public. Taxpayers are unfairly forced to spend excessive amounts on government construction projects in exchange for less output than they would have received at fair market rates.

Maine’s prevailing wage law is modeled on the federal prevailing wage established through the 1931 Davis-Bacon Act. The Davis-Bacon Act was passed at the depths of the Great Depression and seen as a way to increase the wages of workers who suffered during the economic crisis. However, the law has created perverse incentives in the labor market that inflate public spending on government contracts. 

The Davis-Bacon Act has been historically criticized for favoring white workers and discriminating against minority workers. According to a study on youth and minority employment published by the Congressional Joint Economic Committee on July 6, 1977, “Davis–Bacon wage requirements discourage nonunion contractors from bidding on Federal construction work, thus harming minority and young workers who are more likely to work in the nonunionized sector of the construction industry.”

The prevailing wage creates barriers to work on government contracts for many nonunionized workers. Many states across the nation, such as Kentucky and Michigan, have recognized the flaws of the prevailing wage and have repealed these antiquated laws from state statute. Kentucky Governor Matt Bevin made repealing the prevailing wage one of the core platforms of his campaign in 2015. As governor, he was able to withstand resistance from big labor and remove this onerous, discriminatory policy.

Maine must follow in the steps of states like Kentucky which have successfully repealed the prevailing wage. Augusta politicians should replicate these efforts and best represent the interests of Maine’s taxpayers instead of big labor special interests, who have for decades fought to keep the prevailing wage enshrined in state statue.

Maine should remove its prevailing wage to preserve the free market, reduce government spending and rein in the power and influence of special interests. Repealing the prevailing wage is in the interest of Maine taxpayers and will remove some of the red tape that stands in the way of good public policy and economic freedom.

About Niko Malhotra

Niko Malhotra is a high school senior and an intern at The Maine Heritage Policy Center. He is passionate about advocating for public policies that protect individual liberty and fundamental freedoms. He plans to major in political science in college and eventually go on to law school.

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