A recent study showed the repeal of Prevailing Wage laws in West Virginia negatively impacted the state’s construction workers and did not save taxpayers money.
The data in this study, conducted by researchers at the University of Missouri-Kansas City (UMKC) and the Midwest Economic Policy Institute (MEPI), validated the conclusion reached by the School Building Authority of West Virginia in 2017 that the “repeal of West Virginia’s Prevailing Wage law has had no statistically significant effect on school construction costs.”
This new UMKC-MEPI study showed the loss of Prevailing Wage resulted in minimal wage
savings on new-build school projects, which were outweighed by change orders and poor craftsmanship.
According to the report, three new-build school construction project bids (Shady Springs High, Williamstown Elementary and Chapmanville Intermediate) were awarded after repeal of the state’s Prevailing Wage law.
In each case, the projects were burdened with a significant amount of change orders, which cost taxpayers hundreds of thousands of dollars more than the original bid, along with construction delays and cost overruns.
The $7.97 million Shady Springs project only had one bidder, who needed 84 total change orders, which amounted to an additional $755,944 in expenses. Another project, the $12.91 million Williamstown Elementary project is still ongoing, but two large change orders have already been submitted totaling $806,699. The combined change order total exceeded $1.5 million for both projects and may increase as Williamstown Elementary was still under construction when the report was published.
Perhaps the biggest red flag came from the $9 million Chapmanville Intermediate school project, which was plagued by shoddy workmanship and construction delays that prevented the building from being ready for the first day of the school year. Instead of the project wrapping up in June, it finished at the end of November – six months after the original due date.
Among the numerous quality of work problems cited by the Clerk of Works Weekly Report were voids discovered in walls with steel columns, brick haunches and brick anchors incorrectly installed and stairwell walls built in the wrong dimensions.
A safety audit by Mountaineer Safety Consulting, LLC revealed the project had nine state and federal OSHA violations, among them were propane hoses placed in unsafe areas, workers not using personal protective equipment such as hard hats or safety glasses and ladders not tied off correctly.
Besides those three school construction projects, 19 other new-build projects were bid post repeal.
During this time, 15 of the total 22 projects were awarded to non-union contractors and 18 percent of the non-union subcontractor work went to out-of-state firms, who used out-of-state workers. Of the seven union projects, only one subcontractor was from out-of-state, which accounted for 8.3 percent of the work.
The study also showed the repeal of Prevailing Wage hurt construction workers.
The average hourly wages of construction workers grew slower in West Virginia than compared to neighboring states where Prevailing Wage laws exist.
In May 2016, the average inflation-adjusted wage for West Virginia construction and extraction workers (miners) was $23.12 per hour. By May 2018, the average wage grew by 0.8 percent to $23.31 per hour. (The report notes mining and construction is lumped into the same category by the Bureau of Labor Statistics. Since coal production has increased in the past two years, this has resulted in marginal wage increases for miners, which ultimately effects the average inflation-adjusted wage.)
During this same period, the average inflation adjusted hourly wage for construction and extraction workers in Ohio, Pennsylvania and Maryland grew by 1.2 percent, from $24.52 to $24.82.
When looking at specific trades, West Virginia operating engineers saw an 8.1 percent drop in
hourly pay, compared to their counterparts in neighboring states with Prevailing Wage. Hourly wages for carpenters grew 2.9 percent slower, laborers 1.2 percent slower and electricians 2.2 percent slower.
Besides taking a hit on wages, the construction industry also suffered a major blow in developing a future workforce, as fewer apprentices have started construction careers.
In 2016, there were 5,413 individuals in registered apprentice programs. By 2018, the number of apprentices dropped to 4,358, which is a loss of 1,055 apprentices. From 2016 to 2018, West Virginia witnessed a 19.5 percent decrease in apprentices, while neighboring states with Prevailing Wage laws realized an 8.1 percent increase in apprentices. This resulted in a net difference of -27.6 percent in apprenticeship growth.
Not surprisingly, the repeal of Prevailing Wage repeal also made the construction industry more dangerous.
According to the study’s findings, from 2016 to 2017, the construction and extraction worker injury rate in West Virginia jumped from 172.3 per 10,000 full-time workers to 201.5 per 10,000 full-time workers, a 16.9 percent increase.
The construction and extraction worker injury rate in Ohio, Pennsylvania and Maryland during this same time continued to decline, from 164.4 per 10,000 full-time workers to 148.8 per 10,000 full-time workers (a 9.5 percent drop).