Five cities, including several in San Diego County, recently filed a lawsuit to stop the implementation of a bipartisan state law, SB 7, that was designed to encourage more cities to pay prevailing wage on local construction projects in order to increase quality, create more middle class jobs and provide the best possible value to local taxpayers.
Study after study has shown that prevailing wage boosts productivity, produces projects that are more often completed on time and on budget, increases safety, encourages local hiring, and even lessens dependence on social welfare programs because workers are earning a decent wage and benefits.
That is why prevailing wage is supported by leaders as diverse as President Bill Clinton and Rep. Paul Ryan.
You would think these facts would be of interest to El Centro, for example, which does not pay prevailing wage, boasts the second-highest unemployment rate in the nation, and is spending hard-earned tax dollars on lawsuits instead of middle-class job creation.
Similarly, in Carlsbad — another party to the lawsuit — public officials are on record detailing the costly change orders, project delays and other problems that non-prevailing wage projects can invite.
The message from the cities filing this lawsuit is that when you hire more out-of-town contractors who are poorly trained, less qualified and not invested in the community, you are likely to end up with less cost-efficient projects, higher local unemployment and more headaches for local government.
That’s hardly a ringing endorsement.
Nowhere has this been clearer than in Palo Alto and Gilroy, where each decided to build libraries about the same size at about the same time.
In Gilroy, they decided to go with prevailing wage, and the result was a project that was completed on time and on budget, with a library that has been open for more than a year. Almost three-quarters of Gilroy’s contractors were from the local area — meaning that local tax dollars paid local workers to build the project, and in turn, they reinvested their paychecks in the local economy.
Palo Alto went without prevailing wage, and the result was far less appealing. Their project has suffered years of delays and still isn’t complete; it’s millions of dollars over budget, and may even face a legal battle with the primary contractor who has now been dismissed.
To make matters worse, that project was estimated to use local contractors only 11 percent of the time. That means tax dollars were being exported to some other region to complete work that wasn’t done right — or at all.
Time after time, in charter cities that eliminate prevailing wage, we hear these stories. And that’s just the tip of the iceberg. The reality is that a successful legal challenge to SB 7 would only increase the likelihood of similar problems affecting other communities.
That’s probably why even a majority of charter cities in California pay prevailing wage on local projects. They know it is sound policy that provides the best value for taxpayers, builds the middle class and strengthens the local economy by generating $1.50 in local economic activity for every dollar spent on a project.
SB 7 only incentivizes more charter cities to reap these benefits so taxpayers don't end up with more economic disasters as in El Centro, and more taxpayer-financed boondoggles as we see in Palo Alto.