Prevailing Wage a Costly Expense ; Analysis Shows Construction Costs Lower under Temporary Repeal

By Hoylman, Bryan | Charleston Gazette Mail, October 15, 2015 | Go to article overview

Prevailing Wage a Costly Expense ; Analysis Shows Construction Costs Lower under Temporary Repeal


Hoylman, Bryan, Charleston Gazette Mail


Prior to the Legislatures decision not to extend the requirement to pay prevailing wage on taxpayer funded projects until September 30 of this year, organized labor unions implored public officials to keep those wage rates in place. They claimed that without mandated, union-scale wage rates required on public projects, our state would become flooded with out-of-state workers taking the jobs of our men and women here while countless others were forced into poverty.

Over the course of three months without required prevailing wage rates on public improvements, there were countless projects let for bid. An analysis by the Associated Builders and Contractors of West Virginia, which compared projects bid before and during that period, revealed significant cost savings for a number of projects both big and small, without prevailing wage.

However, the group focused the bulk of its analysis on elementary school construction.

In both July and August two new elementary schools in West Virginia were let for bid the new Suncrest Elementary School in Monongalia County and the new Ceredo Kenova Elementary School in Wayne County, both of which allowed for the market to establish labor costs rather than government mandated wage rates.

We then compared the awarded bid costs of these two schools to that of two other elementary schools recently bid over the course of the past year. These two schools, Cedar Creek Elementary in Gilmer County and Ieager Panther Elementary School in McDowell County both required prevailing wage to be paid during the construction.

The two schools that required prevailing wage had an average cost of $224.50 per square foot to build. Each of these costs was based solely on building construction alone. Additional components such as site work, soft costs and contingencies were all removed in order to limit the amount of variables not directly associated with the building size.

Using the exact same standards when analyzing the two elementary schools that did not require prevailing wage to be paid, the average cost per square foot was only $190, creating a difference of $34.50 in cost for each square foot of construction.

When you apply that difference in cost to the 75,000 square foot facility in Monongalia County and the 63,000 square foot facility in Wayne County, taxpayers ended up with breaks totaling an estimated $2.6 million and $2.1 million respectively.

The architects estimate, which assumed prevailing wage on the labor portion of the Wayne County school build, was nearly $3 million over the final winning bid cost for building construction.

Although comparing architectural estimations to awarded bid costs arent always spot-on, labor unions and their supporters have used them to bunk other claims of cost savings during the temporary repeal.

Surprisingly, theyve yet to announce their findings on Ceredo Kenova Elementary.

These arent marginal savings, theyre massive and the primary difference between the two sets of data being looked at here was the requirement to pay prevailing wage. …

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