Should NH have a prevailing wage law?

On Thursday, February 11 the state House of Representatives voted against a bill that would have required prevailing wages for state-funded public works projects.

Prevailing wages, which can be calculated different ways, are supposed to reflect the average regional pay for workers in similar jobs.

There is a federal law requiring prevailing wages on federally-funded projects.  Thirty-two states also require prevailing wages for state-funded projects.   

HB 1641, voted down on Thursday, would have added New Hampshire to that group. 

Supporters of prevailing wage laws argue that they prevent out-of-state companies from undercutting state businesses during bidding for government projects.  Supporters also point to evidence that prevailing wages do not increase government costs, because well-paid workers are healthier and more productive. 

Opponents of prevailing wage laws argue that they interfere with the free market and price out small companies.  Opponents of HB 1641 also noted that the Department of Administrative Services would need approximately $2.6 million annually to enforce a prevailing wage law. 

Was the House right to reject a prevailing wage law?  Share your opinion in the comments.