If it were more efficient and cost effective to pay workers more, wouldn't the contractors already do so? It would certainly be in the contractors' financial interest, and they probably understand their industry better than anyone.

City contracts are put out for bidding. If prevailing wage requirements were more efficient, wouldn't the winning bidders be those that already meet this criterion?

Furthermore, don't contractors already pay prevailing wage, as determined by the market? Wouldn't an employee paid less than the prevailing wage switch jobs to receive higher pay? An employer and employee negotiating salary should know the value and alternative employment prospects of a worker better than anyone else.

I would support the city if it wished to mandate a minimum wage or minimum benefits package that would ensure workers the level of security and prosperity that everyone deserves; however, demanding that workers are paid a fallacious "prevailing wage" is merely inefficient interference.

Skeptical reader,

Don't you think it's about time we looked at Europe and a more (oh my god) socialist way of doing business. That way our middle class might grow to a respectable level, as opposed to shrinking into a disgraceful and embarrassing level.

The capitalism that's been rammed down our throats for far too long has failed. Deal with it.

Alex,

"The capitalism that's been rammed down our throats for far too long has failed. Deal with it."

Actually, its the consumerism and "easy" money expectations that have been advertised down our throats for far too long that has failed. The root of the current problem is excessive debt... people taking on debt to buy things immediately that they couldn't/shouldn't afford and businesses over-leveraging. All this drives prices of everything up. The answer is not to artificially inflate wages. Your "middle class" that you want to sustain in this manner won't be able to keep up with the resulting inflation and anything that can be out-sourced will be, for lower wages in more efficient settings. People need to return to a work and savings ethic that promotes building wealth over time on increased productivity, ingenuity, investment and savings. To hold up Europe as a model indicates that you might prefer the higher unemployment rates that European countries have traditionally suffered from.

The U.S. unemployment rate stood at 6.5 percent in October. At 6.7 percent now, unemployment is at a 15-year high.

source: Web Link


Meanwhile, at the end of November in Germany (one of the stronger European economies):

Germany's November s.a. jobless total dropped 10 K over the month, better than the estimation of -5K and leaving the adjusted jobless rate unchanged at a 16 year low of 7.5%. However, labor office head Weise said the labor market is still stable and demand high, but warned that there are mounting signs that the recession will hit the labor market soon. Indeed some companies have already announced prolonged production suspension over the Christmas period and it is only a matter of time until they start laying off staff, with unemployment likely to rise markedly next year.

source: Web Link

Be careful what you wish for...

Finally some good news for working people and not just frantic efforts to bolster the stock market!

Oh boo hoo, if only we could outsource it all to some sweatshop in Thailand!

I know people are trying to blame the recession on "those minorities that got loans they couldn't afford". But it is really like a poker game in which the wealth is concentrated in one player. In a consumer driven economy the game can only then go on as long as the other players can borrow money. When that music stops the game is over, now like musical chairs and not enough.

Dan,

Right, consumerism is part of capitalism.

It's OUR money that the Council is throwing around like so much confetti - on one pet project or another, and on grandstanding over some "moral" issue like climate change, and now this.

Prevailing wage laws are a sop to politically powerful (and often corrupt) unions. THey have nothing to do with fairness. Palo Alto has been fortunate to have been exempt from the state prevailing wage mandates. It is the height of stupidity for the Council to voluntarily put our city under this burden.

The council has the primary responsibility of managing the taxpayer's money. They're failing miserably.

I remember inspecting on one sewer job here a while back. When the workers found out they weren't getting prevailing wage, they actually started working faster. Their rational was to get done here quicker so they could get assigned to another City's prevailing wage job.

So, we pay them less and they work faster. Hmmm.

Alex,

I think I may have been unclear in my comment. I don't object to the city mandating higher wages and increasing benefits.

I had only wanted to make two points:

1. the suggestion by some supporters that a prevailing wage law would be cost neutral for the city seems unlikely to me.

2. a prevailing wage law would be an inefficient method for mandating wage increases.

Some of my rhetoric was overwrought and thus misleading. Apologies.

People.......what Diana Diamond fails to mention in her article is that many Capital Improvement Projects in Palo Alto have been requiring prevailing wages for decades. It is not a new concept in the City.

All basic research will indicate that any CIP that obligates Federal and or State funding, must by law use prevailing wages in the Contract. It has been this way for years and this info has been open to the public for years. Ms. Diamonds article wants you to believe that this has been hidden from you.

Non prevailing wage earners have no benefits, no insurance, usually no training in their prospected field of work,nothing usually except a wage that they pay tax on. Employer reaps all the profit leaving workers with little.

a prevailing wage requires employers to submit a monthly statement outlining who, and how much each makes. Prevailing wage earners typically get health benefits, possible retirement plans, may belong to a union and receive fair compensation for the work they do just as you all would like to recive from your employers.

For some reason this page keeps deleting my comment that, usually, Prevailing wage is set at union scale. Sacramento found out a few years ago that scale and prevailing were not the same. I have been involved with construction for over 40 years and prefer union workers on those jobs I am involved with, since I was a journeyman electrician, IBEW 614, but I believe union workers can compete on merit rather than by a floor wage that pays the less competent the same as a journeyman.

for "skeptical reader"...your qoute "City contracts are put out for bidding. If prevailing wage requirements were more efficient, wouldn't the winning bidders be those that already meet this criterion?" well gues what? 87% of low bidders in Palo Alto over the last 2 years have been union contractors who pay a prevailing wage even though it is not required in Palo Alto (which by the way is the only city in N. California other than Modesto that doesn't require the payment of prevailing wages on its public projects).
Peter Philips a Stanford Ph.d and the economist referenced in the story above has collected 2 years worth of data that compared Palo Alto, and 4 other surronding cities. Based on empirical data in this study there is no indication that a prevailing wage requirement would impact cost in Palo Alto...only quality (in a positive way).

"...well gues what? 87% of low bidders in Palo Alto over the last 2 years have been union contractors who pay a prevailing wage even though it is not required in Palo Alto ..."

Then what's the big deal. If it is true that bidders who pay prevailing wages are so efficient that they are the low bidder almost 90% of the time, it seems like we have a solution searching for a problem that doesn't exist here.

If prevailing wage bidders are winning all the time anyway, then it seems likely that the only effect of requiring ALL bidders to pay prevailing wages would be to take away the bidders who don't pay such wages, but don't often win the bidding. This would reduce the number of bidders and at the margin would take the pressure off prevailing wage bidders to beat the non prevailing wage bidders, and win the contract.

It seems likely that we'll be paying more for our contracts without substantially increasing the number of workers not receiving prevailing wages (since according to Neil, prevailing wage bidders already get almost 90% of the contracts.) Doesn't seem like a good move to me.

The unions, and the contractors who employ them must be happy with the squelching of competition.

We must never slam the door on new entrants to the field, and many minority contractors got their first break underbidding established union contractors. Some learned, some lost, but they at least had a chance. A prevailing wage determination cannot just default to union scale, because even union workers sometimes agree to lower pay during
slow times.