Mass. Prevailing Wage Will Cause "Affordable" Housing Project Costs to Rise
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FOR IMMEDIATE RELEASE CONTACT: John Kartch
18 APRIL 2008
202-785-0266
Mass. Prevailing Wage Will Cause “Affordable” Housing Project Costs to Rise
Washington, D.C. — Today, the Alliance for Worker Freedom (AWF), a Washington, DC based group that advocates for the protection of workers rights, opposed a recent bill to implement prevailing wage laws in the construction of affordable housing projects in Beacon Hill, Massachusetts.
The concern is a little known amendment in a current Massachusetts’ housing bill. Developers would have to pay workers a prevailing wage on any development consisting of more than 75 units. Massachusetts already requires the payment of a prevailing wage on government construction projects, which according to a Beacon Hill Institute study inflate national construction costs by 22% annually.
AWF Policy Director Brian Johnson contests the method by which these prevailing wages are calculated. “The surveys create a market bias and distort true market wages. Moreover, inaccurate and out of date self-reported surveys, with an error rate of 100 percent, hardly reflect true prevailing wages. With overwhelming evidence for prevailing wage reform, in expanding these distorting practices, prevailing wages continue to skew the labor market directly in favor of Big Labor unions and against the average American worker and business owner.”
The wide-sweeping nature of this amendment would cause construction costs in Massachusetts to skyrocket. The measure would increase cost by an estimated 34 percent per unit built, which translates into approximately $60,000 more per unit.
“The notion that workers who are paid a prevailing wage are better workers is predicated on a false premise. In fact, prevailing wages offer little incentive to workers to increase their production,” says Johnson. “The state cannot dish out higher wages and build more units simultaneously, all while expecting the Massachusetts tax payer to foot the bill.”
The Alliance for Worker Freedom contends that the prevailing wage calculation system must be fixed before it is expanded upon by state or federal legislation.
