Prevailing Wage is Under Attack
The overwhelming consensus of peer-reviewed research by respected economists definitively proves that prevailing wage standards have no significant impact on public construction costs and produce better outcomes for the economy and community. Despite these facts, some financially-motivated special interests are pushing repeal of state prevailing wage laws and changes to the way that federal Davis Bacon rates are calculated.
Here’s what the “low road” agenda of weakening or repealing prevailing wage laws would accomplish:
- No Project Cost Savings: Wages and benefits are a small (less than 20% and declining) share of total public works project costs. Reductions in wages are almost entirely offset by increased spending on fuel, materials, equipment, and welfare for blue collar construction workers.
- Lower Wages and More poverty: Repeal of prevailing wage reduces construction worker income by 8% and drives more workers into poverty. Repeal also forces taxpayers to spend an average of $367 million MORE per year on food stamps and low income tax credits.
- More Offshoring of Jobs: Construction has more foreign born workers than any US industry except agriculture. Repeal of prevailing wage is NAFTA for construction workers. Non-PWL states export billions of dollars contractors and workers from outside the local community.
- More Injuries: Non-prevailing wage states have more worksite safety problems and construction fatalities.
- A Weaker Economy: Repealing state prevailing wage laws would shrink our national economy by at least $65 billion and eliminate 400,000 jobs.
- Skilled Worker Shortages: Elimination of prevailing wage reduces skilled trade apprenticeship programs by 40% and minority apprenticeship by 54%. Fewer trained workers not only leads to labor shortages, but reduces a worker’s lifetime earnings by $240,000.
- Strained Public Budgets: If all state prevailing wage laws were repealed, an $8 billion loss in local, state and federal tax revenue would necessitate cuts to vital services or tax increases.
- Lower Productivity: Repeal of prevailing wage produces a lower skilled construction workforce, which ultimately reduces labor productivity.
Learn More: Research Studies
Coming Soon: The Economic Impact of the Davis-Bacon Act