essays and articles by david g allen


Roadwork Orange—Your Highway Taxes at Work!

 

This is orange season. As you travel the highways, you’ll see orange barrels, orange signs, and orange-clad people waving orange flags.

You will be interested to know that all of this roadwork orange can sometime cost more than it does to resurface the pavement and replace the guardrails. Maintaining Traffic, as it’s called in the trade, is a very expensive component of the cost of renovating roadways.

One reason for this exorbitant cost is the fact that construction laborers—the people who move the orange barrels and wave those orange flags—are paid $30.01 per hour. When the contracting company adds its margins for overhead, taxes and profit, the cost to you, the taxpayer, can grow to over $60.00 per hour.

Most paved roads in West Virginia qualify for some degree of federal aid and on federal aid construction projects, the Davis-Bacon Act requires that workers be paid not less than the local prevailing wage rates for similar work. In 52 of our 55 counties, the US Department of Labor (USDoL) has determined that the prevailing wage rate for a laborer who works as a Flag Person is $30.01 per hour.

Prevailing wage rates for flag persons:

Morgan County, WV $30.01 per hr.
Berkley County, WV $21.71 per hr.
Jefferson County, WV $21.71 per hr.
Frederick County, VA $6.75 per hr.
Clarke County, VA $9.25 per hr.
Loudoun County, VA $9.25 per hr.

The average hourly wage of all American non-farm workers is something over $15.00 per hour. So it is fair to ask how the USDoL came up with a prevailing wage of $30.01 per hour for the most common of labor in the nation’s second-poorest state.

The Davis-Bacon Act was passed in 1931, a time when every third man was looking for work. The law’s purpose was to protect organized labor’s wage pacts. This purpose has not changed in 73 years. Guess where the $30.01 comes from?

Libertarian economists have long argued that market forces need to be employed throughout the economy in order to accurately and fairly price goods and resources. On the other side, Liberals have thrown up the argument that only government can do certain tasks, such as road building in this example. By arguing from this vantage, they then expand the venue to justify the central planners’ role in determining local wage rates, prevailing or otherwise.

If you are an advocate of Labor, then you would view the Davis-Bacon Act as a victory for the common laborer. And victory it is, if you are prone to declare victory when day laborers are paid more than nurses. You would also argue that the Davis-Bacon Act prevents unscrupulous, out-of-state contractors from coming here with truckloads of Mexicans and taking jobs away from our local workforce. (This continues to be the preferred sound bite because it resonates so well.)

A student of history would disagree with these conclusions. Davis-Bacon has often been called the last of the Jim Crow laws. In 1931, the jobs of white union men weren’t threatened by Mexicans and NAFTA. Back then, the unions feared that black men would take their jobs. Davis-Bacon served Jim Crow well.

The Davis-Bacon Act has been both cruel and inept as social legislation. But rather than reverse it, seven decades of congressmen, senators and presidents have allowed it to stand so as not to alienate Labor.

What is the cost of a Flag Person? You can read highway project bid tabulations at the Contractors Association of WV website (www.cawv.org). And once there, you will find bid prices ranging from $45.00 per hour and up. To put this in perspective, you now pay about 45¢ per gallon in gasoline taxes that fund road construction. You will have to buy 100 gallons of gasoline to pay enough tax to cover one hour of the Flag Person’s time. To pay this laborer for one regular 40-hour week, then plan on pumping 4,000 gallons. For most of you, this works out to six years of driving.

In its latest wage determination ruling, the USDoL decreed that the local prevailing wage for a Flag Person in Berkeley, Jefferson and Mineral counties is $21.71 per hour. Given all of the population growth and the construction boom going on in Berkeley and Jefferson counties, I would have thought that the central planners had applied their wage formula incorrectly. Especially so, since the unemployment rates there are negligible.

But, hey, I was never cut out to be a central planner. They are all-knowing gods and I am just a writer waving a red flag.

 

David G. Allen, Clarksburg, WV

"Roadwork orange" is Part 8 of a continuing series based on "The Road to Serfdom" by F. A. Hayek and appeared in the May 28, 2004 issue of the WV State Journal.

 

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Copyright 1990-2005  David G. Allen