Editorial: Oregon continues to pay more

Published Mar 23, 2013 at 05:00AM

The Oregon House has found another way to ensure that the state of Oregon pays more and gets less for its university system.

The House voted 47-10 Thursday to clarify that university projects pay the “prevailing wage.” Local legislators, State Reps. Jason Conger, R-Bend, and Mike McLane, R-Powell Butte, voted against it.

Prevailing wage rates are set by the state after it does surveys of contractors. Oregon, like many other states and the federal government, requires that prevailing wages are paid on public projects.

Some states passed laws requiring the prevailing wage in the 1920s as a way of controlling out-of-state contractors from bringing in black workers from the South, paying them less and getting contracts. Under prevailing wage requirements, contractors bidding on a project have to pay, at least, the same wages.

The prevailing wage was popular with unions then. It is now. But the concern has always been that compelling governments to pay prevailing wages ensures projects cost more. And it does.

For instance, a few years ago California extended the prevailing wage to apply to workers building subsidized, low-income, residential projects. Guess what a study undertaken by researchers at the University of California at Berkeley found?

The prevailing wage increased costs from 9 percent to 37 percent, meaning the program couldn’t build as much housing. “The requirement would effectively transfer income from low-income housing consumers in California to workers in California’s construction industry,” the 2005 study said.

But back to Oregon. House Bill 2646 is, as we said, to clarify the law.

It’s pretty clear the intent of the law in Oregon is that the prevailing wage should apply to university construction projects. Nike co-founder Phil Knight has used some unconventional arrangements to make some of his big donations to the University of Oregon.

As reported by Eugene’s Register-Guard, Knight leased the land for the $40 million Jaqua Academic Center from the university for a nominal fee. He “built the structure and then handed it to the university as a gift. The same process is being followed for the” football operations center next to Autzen Stadium.

The law wasn’t clear that Knight had to pay the prevailing wage under that arrangement, though the Register-Guard has reported that the actual construction contracts required it. This bill would make it clear in the future that prevailing wage is required from the get-go.

We agree the law should be clear. But it’s also clear that Oregon’s prevailing wage law virtually guarantees the state gets fewer roads and schools for every precious dollar.