The citizens of Massachusetts have an important date coming up, the 20th anniversary of the good government Pacheco Law. Whether you’ve heard of it or not, the Pacheco Law has been a watchdog, charged with providing high quality public services at fair prices. Unfortunately, there is a lot of misinformation floating around about the Pacheco Law.
The point of the Pacheco Law is to protect the people of Massachusetts from contractor waste, fraud, and abuse and other actions that are harmful to the public. For example, the Pacheco Law forbids private contractors from winning contracts by cutting workers pay and important benefits, such as health insurance. Employers who pay low wages and provide low quality or no health insurance shift costs to the taxpayers in the forms of welfare, food supplements, health care, and wage supplements under the Earned Income Tax Credit.
In other words, that low-price, low-road strategy costs the public more because it shifts costs to the people of Massachusetts.
Groups like the conservative, Koch-funded Pioneer Institute seem to be calling for wholesale privatization with no protections for the public’s money or welfare. In other words, they are advocating privatizing work even if it costs more and provides poorer quality.
Other policies of the Pioneer Institute will also cost the people of Massachusetts more. For example, Pioneer applauds repealing a sales tax on computer and data services, while attacking the pay of construction workers. Both of these actions will mean a hit to revenues and skills Massachusetts needs to provide high quality public services and infrastructure.
Many people assume wrongly that construction work is low-skill. It may be that the Pioneer institute thinks construction workers are paid too much because it does not understand the high level of classroom and on-the-job training and skills required for construction work.
In fact, the training required for the construction trades can equal or exceed the years of education required for a bachelor’s degree. The lowest amount of training is two years for laborers, while the training for electricians and some other trades is 5 years or more. Electricians’ education includes 900 hours of classroom work and 8000 hours of hands-on training. Just to enter the program requires completion of high school work including Algebra and passing an entry test. Even more math is required along the way. A carpenters apprenticeship requires 4 years training with 640 hours of classroom instruction and 8000 hours of on-the-job training. Many construction workers earn at least an associates degree during their training.
The Pioneer Institute's attack on construction pay and benefits will encourage construction workers to take their skills elsewhere. In addition to training, construction work requires a unique pay and benefits structure to attract and hold a superior workforce.
Construction work tends to be episodic. An employer may need an electrician for a few days here and there as the job progresses. That employer wants an electrician on the job only for those days when electrician work is needed. At the same time, the electricians want steady work and good pay and benefits. That is not possible when a job may only be available from time to time.
That work, pay, and benefit structure is provided by provisions in construction employer and union collective bargaining agreements and the support of prevailing wage laws.
The solution reached by construction employers and unions is the union hiring hall. Contractors contact the hiring hall to send over the number of electricians needed. Once that job is done, the electricians report back to the hiring hall for their next assignment. Without that structure the cost and quality of construction work would suffer.
This is not just speculation.
A 1994 study by Hamid Azari-Rad, Anne Lucille Yeagle, and Peter Philips, "The Effect of the Repeal of Utah's Prevailing Wage Law on the Labor Market in Construction" found that the quality and availability of skilled workers crashed when Utah's prevailing wage law was repealed. That work has continued in more recent work in Hamid Azari-Rad, Peter Philips, Mark J. Prus, The Economics of Prevailing Wage Laws (2005).
Taking the low road of cutting wages hurts the public. It increases welfare costs, and those costs will have to be paid for by the taxpayers of Massachusetts along with subsidies from the federal government. Poverty and poverty wages have their own costs that will affect generations to come.
Given what is at stake, doesn't it make more sense for the people of Massachusetts to opt for a Sunshine Law like the Pacheco Law and keep it on a par with open meetings and freedom of information laws to ensure that money is being used wisely rather than a "just trust that if it's provided by the private sector all will be well" approach?