Benefits of Prevailing Wage
GOOD FOR WORKERS, BUSINESSES AND THE COMMUNITY
Prevailing wage is a local market-based minimum wage and workmanship standard on publicly funded construction projects.
Research consistently shows that prevailing wage laws benefit workers, businesses and the entire community by producing more local jobs, a stronger economy and higher quality public works—with no increase in total project costs, and often at a savings to taxpayers.
How Prevailing Wage Helps Workers
- Increases hiring of skilled, local workers on public construction projects.
- Raises incomes by as much as 17% and grows the middle class.
- Reduces the number of construction workers living in poverty by 30%.
- Increases the number of workers with health insurance by 8%.
- Expands middle class career pathways—particularly for veterans and people of color.
- Reduces worksite injuries and fatalities by as much as 18%.
- Expands apprenticeship training by 40%. Apprenticeship training increases a worker’s lifetime earnings by over $240,000.
How Prevailing Wage Helps Businesses
- Increases hiring of local firms to build local public works.
- Directly supports apprenticeship programs, preventing skilled labor shortages and ensuring a stable supply of well-trained local construction workers.
- Prevents unfair competition from unscrupulous contractors who cheat their employees, offshore local construction jobs, and/or cut corners on safety and quality.
- Reduces employee turnover.
- Supports nearly 8,000 veteran owned construction businesses.
- Increases productivity on the job site by as much as 20%.
How Prevailing Wage Protects Taxpayers
- Projects built with Prevailing Wage standards are more likely to come in on time and on budget.
- The use of skilled local workers helps controls construction costs by increasing project efficiency. Prevailing wage projects spend LESS on fuels, materials, and equipment.
- Reduces reliance on public assistance programs—saving taxpayers hundreds of millions of dollars each year.
- More local spending and higher wages boosts local, state and federal tax revenues by billions of dollars each year—preventing tax increases and protecting vital public services.
How Prevailing Wage Strengthens The Economy as a Whole
- Because prevailing wage produces more local hiring, it means millions more of the tax dollars that are spent on construction are put to work in the local economy—not shipped out of state.
- Supports middle class incomes that boost consumer spending—which creates hundreds of thousands of additional jobs across all sectors of the economy.
- Increases state and national economic output by billions of dollars each year.
- Each dollar paid in Prevailing Wages produces $1.50 in economic activity.
Prevailing Wage is Good for the Community
- Market wage rates are set based on geography, craft and experience—reducing pay disparities based on gender and race.
- Disproportionately benefits military veterans, who face unique challenges transitioning to civilian careers and work in construction at higher rates than non-veterans.
- Reduces fuel consumption and materials waste, promoting environmental sustainability.
- Enables more workers to not only earn a livable wage in their community, but to contribute their skills and talents to building the schools, roads, and other public facilities on which their families and neighbors rely.