(The Center Square) – The Washington Supreme Court has reversed a lower court to find the state’s latest prevailing wage law constitutional.
The statute “requires the industrial statistician” at the Washington Department of Labor and Industries “to adopt the prevailing wage from whichever collective bargaining agreement (CBA) covering work in a particular county has the highest wages, if such a CBA exists,” said the court in its decision Thursday.
Several groups of builders and contractors had brought suit, claiming the law, passed in 2018 by the Washington Legislature, was “an unconstitutional delegation of legislative authority.” The trial court found for the government, the appeals court for the builders, and now the state’s highest court has reversed that decision.
Previously, L&I could look at several different metrics to calculate the prevailing wage, which is the hourly wage the government requires contractors to pay their workers. The new law changed that and likely increased costs in the process.
Andrew Villeneuve, founder of the Northwest Progressive Institute, cheered the ruling.
“This welcome decision confirms that the Legislature followed the Constitution in its efforts to shore up our prevailing wage system, which has been beneficial to Washington workers,” he told The Center Square in an email. “We thank the Court for its thoughtful resolution of the case.”
He explained, “The purpose of SSB 5493, which passed with bipartisan support in the 2018 session, was to improve our prevailing wage system. The law directs the Department of Labor & Industries to establish prevailing wage rates, and provides that if there are no applicable collective bargaining agreements to base those rates off of, the department’s industrial statistician shall establish the prevailing rate either by conducting wage and hour surveys or other appropriate methods.”
The Association of General Contractors had “challenged the constitutionality of SSB 5493, contending the Legislature overstepped its authority when it adopted this law. But as the Supreme Court has made clear, the Legislature did not overstep,” Villeneuve said.
Washington state constitutional questions aside, Competitive Enterprise Institute research fellow Sean Higgins doesn’t believe the law is an improvement.
“‘Prevailing wage laws’ are literally designed to drive up the labor costs of public works projects so that there is no advantage for a company that bids on the contracts to be non-union,” Higgins told The Center Square via email. “These laws say the company accepting the government contract must pay their workers the ‘prevailing wage’ in that region for the type of work involved in the contract. Precisely how this ‘prevailing wage’ is determined can vary but the law usually sets it up so that it is about what unionized companies pay their workers.”
Higgins explained there is nothing in the Washington law “that establishes any minimum number of businesses that have to be surveyed. It’s just ‘whatever the unionized ones pay.’ If there is just one unionized company in this field, then what it negotiated in its collective bargaining agreement automatically becomes the ‘prevailing wage’ for the type of work involved.”
Under that situation, “The non-union contractor loses any advantage they have to use their lower labor costs to win the contract by putting in a low bid,” he said. “It also means that if your business is government contracting you might as well accept a union at your company because you have to pay your workers union wages regardless.”
It also means that public works projects will cost more, “with taxpayers ultimately footing the bill,” he said.