Statistics: The Prevailing Wage Difference
HIGHER PRODUCTIVITY, BETTER WAGES AND MORE LOCAL HIRING
WITH NO INCREASE IN PROJECT COST
Most peer-reviewed research has definitively concluded that there is no significant cost difference between prevailing wage and non-prevailing wage projects.[i] This is largely due to differences in efficiency and productivity which trigger other changes in construction industry spending dynamics.
A 2015 comparison of the construction industries in the 25 US States with average or strong prevailing wage laws and the 25 with weak or no prevailing wage laws quantifies these and other important differences.
These include not only wages and productivity, but rates of local hiring, reliance on taxpayer funded welfare programs and public budgets—each of which are charted below. Above all else, these differences show that prevailing wage policies offer the best value for taxpayers, the economy and the construction industry as a whole
[i] Below is a partial list of peer-reviewed studies have concluded that there is no statistically significant cost difference between prevailing wage and non-prevailing wage public construction projects.
- “Do Responsible Contractor Policies Increase Construction Bid Costs?” C. Jeffrey Waddoups, Ph.D. and David C. May, MS. (May 2014)
- “An Analysis of Davis-Bacon Prevailing Wage Requirements: Evidence form Highway Resurfacing Projects in Colorado,” Kevin Duncan, Ph.D. (June 2011)
- “Prevailing Wages and Government Contracting Costs,” Economic Policy Institute (July 2008)
- “An Evaluation of Prevailing Wage in Minnesota: Implementation, Comparability and Outcomes, “Lisa M. Jordan, Ph.D. Lead Researcher Additional Contributors: Robert Bruno, Ph.D., Phil Schrader, Tony Sindone, Ph.D. (Oct. 2006)
- “Prevailing Wage Laws and Construction Costs: Evidence from British Columbia’s Skills Development and Fair Wage Policy,” Mark J. Prus, In The Economics of Prevailing Wage Laws, edited by Hamid Azari-Rad, Peter Philips and Mark J. Prus, pp. 123–48. Burlington, VT: Ashgate Publishing Limited (2005).
- “Wages, Productivity and Highway Construction Costs,” Construction Labor Research Council (Mar. 2004)
- Azari-Rad, Hamid, Peter Philips, and Mark J. Prus. 2003. “State Prevailing Wage Laws and School Construction Costs.” Industrial Relations 42(3): 445–57.
- “Analysis on Claimed Cost Savings from Exempting School Construction from Prevailing Wage Requirements,” Herbert Weisberg, Ph.D. (July 2002)
- “Philips, Peter. 2001. “A Comparison on Public School Construction Costs: In Three Midwestern States that Have Changed Their Prevailing Wage Laws in the 1990s,” Salt Lake City, UT: Department of Economics, University of Utah.
- Peter Philips. 2000. “Prevailing Wage Laws and School Construction Costs: Evidence from British Columbia.” Journal of Education Finance 25(3): 415–31.
- Prus, Mark J. 1996.”The Effect of State Prevailing Wage Laws on Total Construction Costs,” Cortland, NY: Department of Economics, SUNY, Cortland.
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