Workplace

Prevailing Wage Opponents Fail the Laugh Test

Part One of a Three-part Series on Prevailing Wage by Mark Price and originally published at Third and State.

Prevailing wage laws have long operated nationally and in states as a check against the tendency of the construction industry to degenerate into destructive wage and price competition. Such competition can drive skilled and experienced workers from the industry, reduce productivity and quality, and lead to poverty-level jobs, all without saving construction customers any money.

In an exhaustive review of the research on the impact of prevailing wages on contracting costs, Nooshin Mahalia concluded:

At this point in the evolution of the literature on the effect of prevailing wage regulations on government contract costs, the weight of the evidence is strongly on the side that there is no adverse impact. Almost all of the studies that have found otherwise use hypothetical models that fail to empirically address the question at hand. Moreover, the studies that have incorporated the full benefits of higher wages in public construction suggest that there are, in fact, substantial, calculable, positive benefits of prevailing wage laws.

Although the weight of evidence suggests prevailing wage laws do not raise costs, advocates for repealing the law in Pennsylvania continue to repeat some version of the following:

How About A Sitdown Strike Across Hershey’s Supply Chain?

A blog post by Stephen Herzenberg, originally published at Third and State.

By now most of you have heard about the recent Hershey incident in which foreign students, having paid for the privilege of participating in a “cultural exchange” visit to the United States, found themselves packaging the candy company’s chocolate for about $8 per hour (not counting the upfront fee for the program and before you subtract the living costs taken out of the students’ paychecks). 

As Pennsylvania AFL-CIO President Rick Bloomingdale and I pointed out in a recent Philadelphia Inquirer op-ed , the implications of this incident go far beyond the advantage taken of the 400 students. It’s a case that demonstrates the irresistible urge of global corporations to fragment workers in their production chains so that the most vulnerable can be paid very low wages. Hershey, after all, has a stronger motivation than most corporations to resist this impulse: it’s in a capital-intensive industry, it has a cherished consumer brand placed at risk by the relentless pursuit of low wages, and the company is held in trust on behalf of a school for underprivileged children. The Hershey case demonstrates the need for constraints on companies’ freedom to pursue low-wage strategies.

Our suggestion in the Inquirer was a union that cuts across the entire company supply chain (within the U.S. for starters). This type of “network” unionism would generate long-term economic benefits for the U.S. because companies would be able to pursue productivity enhancing strategies with all their workers and also through cooperation among plants at different points in the production chain.

Since the legislative route to such multi-plant unionism could take a while, what about taking a tactic out of the students’ playbook — and out of the 1930s — a sitdown strike, this one including all workers in the entire Hershey production chain?

More than any other single step that I can think of, broad-based unionism that restores industrywide private-sector wage and benefit standards — in local service industries as well as within manufacturing — could fix the economic inequality threatening the United States and restore the middle class.

The Middle Class ‘Under Attack’

A blog post from Mark Price, originally published on Third and State.

At the Keystone Research Center, we have been chronicling for years the forces that are putting a tighter and tighter squeeze on middle-class Pennsylvanians.

Last week, we released a new report in partnership with the national policy center Demos that takes the temperature of the state's middle class in the wake of the Great Recession. I'm sorry to say, once again, the patient is not well.

The state's annual unemployment rate is the highest it has been in nearly three decades and the cost of going to college is on the rise.

According to the report, times are particularly tough for Pennsylvania's young people, with state budget cuts to 18% of public university funding and a 7.5% tuition hike in Pennsylvania's State System of Higher Education. Pennsylvania's young people already bear the seventh highest rate of student debt in the nation — at approximately $28,000 on average.

Third and State Recap: Marcellus Jobs, Pa.'s Budget, Paid Sick Days & a Misleading Health Care Study

Over the past two weeks, we blogged at Third and State about Pennsylvania's state budget, Marcellus Shale job creation, paid sick days legislation in Philadelphia, and a thorough debunking of a misleading study on the Affordable Care Act.

IN CASE YOU MISSED IT

Philadelphia Mayor Vetoes Paid Sick Leave Bill

A blog post from Stephen Herzenberg, originally published on Third and State.

Some bad news out of Philadelphia Tuesday — Mayor Michael Nutter vetoed legislation that would have allowed every worker in the city to earn paid sick days.

As Lonnie Golden, a professor of economics and labor studies at Penn State Abington, and I wrote in an op-ed earlier this month, a paid sick days law would be good for business, good for the economy and good for public health in Philadelphia.

The public seems to agree. Seven in 10 Philadelphians supported the bill, according to a recent poll.

As we wrote in our op-ed:


Paid sick days are good for business and the community, as well as for families. Businesses save because worker turnover declines, lowering hiring costs and eliminating lost productivity as new workers get up to speed.

The cost of hiring is high compared to paying for sick days because managers and human-resource professionals who recruit earn more than lower-wage workers. Businesses also save because paid sick days reduce worker resentment and improve worker-manager relations.

The community benefits because, when sick workers stay home, disease doesn't spread to other workers or to customers. Workers also obtain more timely medical care and recover faster, reducing lost productivity and holding down health-care costs.

Hopefully, City Council will agree and override the Mayor's veto when it reconvenes in September.

Third and State This Week: Preserving Tobacco Funds for Health Care, Fasting for PA's Vulnerable and the May Jobs Report

This week, we blogged about the latest job numbers, efforts to preserve tobacco settlement dollars for health care services, paid sick days legislation and more.

IN CASE YOU MISSED IT

Third and State This Week: Teacher Salaries, Legislative Updates & Paid Sick Leave in Philadelphia

This week at Third and State, we blogged about teacher salaries and a paid sick leave bill in Philadelphia City Council, along with providing legislative updates on efforts to cut unemployment benefits in Pennsylvania and advance a state budget with deep cuts to education and human services.

IN CASE YOU MISSED IT:

Using NFIB Economist’s Estimates on Paid Sick Days: It’s Not Cricket

A blog post from Stephen Herzenberg, originally published on Third and State.

As a kid living near Manchester in the north of England, my first love was cricket. The sport (it is a sport) comes up nowadays when I use the phrase “it’s not cricket” — as in, it’s not acceptable, it’s not done.

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