The following studies prove otherwise. Check out these amazing
studies that support training and skill as value, not costs. You will
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Prevailing Wage Studies
A Comparison of Public School Construction
Costs In Three Midwestern States that Have Changed Their Prevailing
Wage Laws in the 1990s, by Peter
Philips, University of Utah. 2/01 (16 pages)
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The report focuses upon the states of Ohio, Kentucky
and Michigan to examine whether or not the application of prevailing wage
regulations raises construction costs and, if so, by how much. Specifically,
the report analyzes new public school construction in the aforementioned
states over the period of 1991-2000 to assess statistically whether
or not changes in the prevailing wage policies as they applied to public
school construction raised or lowered the cost of building public schools.
The analysis of the school construction completed in the three states
during the periods when prevailing wage laws were in effect, suspended
or repealed found no statistically significant difference between those
schools built with or without prevailing wage regulations. In fact,
on a number of instances school construction costs actually rose, such
as in Ohio, subsequent to repeal of the state’s prevailing wage law.
The Effect of State Prevailing
Wage Laws on Total Construction Costs, Mark J. Prus, State University
of New York, Cortland, N.Y. 1/96 (15 pages)
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This is the first study to look at the actual
construction costs of prevailing wage projects on a variety of construction
projects since the flawed 1983 study of unrelated regional areas, "The
Effect of the Davis-Bacon Act on Construction Costs in Rural Areas," (Fraundorf,
1983). The Prus study analyzes the impact of prevailing wage legislation
on total construction costs using data on nonresidential construction
in the United States from the F.W. Dodge Company, an organization that
collects and disseminates data on construction projects to the construction
industry. These data give information on construction costs at the
start of the project, or bid price. The study also contains information
on detailed structure type, project location, project scale and technical
characteristics of the project such as the number of stories and type
of frame. The report also favorably compares the cost and related factors
between public, private and federal projects on a regional basis.
Losing Ground: Lessons from
the Repeal of Nine "Little
Davis-Bacon" Acts, Garth Mangum, Peter Philips, Norm Waitzman
and Anne Yeagle, University of Utah. 2/95 (98 pages)
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The study examines the impact of repealing state prevailing
wage laws in 9 states that repealed their statutes between 1979 to
1988. The report compares the 9 repeal states with the remaining 32 states
with prevailing wage laws and the 9 states that never enacted prevailing
wage laws. From this detailed comparative analysis the authors found several
clear and profound negative effects of repeal. While most closely
examining the impact of repeal in the state of Utah, the author emphasizes
the worsening level of worker wages, benefits and training, as well as
increased worker injuries and greater number of project change orders
and cost overruns, in all states reviewed.
Square Foot Construction
Costs for Newly Constructed State and Local Schools, Offices and Warehouses
in Nine Southwestern States,
by Peter Philips, University of Utah. 9/96 (48 pages)
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Prepared for the State of New Mexico Legislature, this
study compares actual public square foot construction costs in the five
Southwestern and Intermountain states that have state prevailing wage
laws with the four states in the same region that do not have state prevailing
wage laws. These five “have law” states are New Mexico, Texas,
Oklahoma, Wyoming and Nevada. The four “no-law” states are
Arizona, Utah, Idaho and Colorado. During the period of the study,
1992-94, elementary and middle schools cost less per square foot in the
five-state group with prevailing wage laws. The conservative conclusion
from the actual construction cost data is that cost differences found
between states does not provide support for the proposition that the elimination
of prevailing wage law saves on public construction.
Kansas and Prevailing Wage
Legislation, by Peter Philips,
University of Utah. 2/98 (56 pages)
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The report is a case-study comparison of new school
construction costs in Kansas compared to the surrounding Great Plains
states that have retained their prevailing wage laws. The conclusion finds
no difference in square foot construction costs between comparable states
with and without prevailing wage laws. Training and productivity levels
did drop, however, after repeal of the Kansas prevailing wage repeal. Especially noted
were drops in wages, minority apprenticeship-training and employer contributions
to pension, health and welfare programs. In addition to these negative
results, Kansas reaped a costly, higher injury rate in construction.
Kentucky’s Prevailing
Wage Law: Its History, Purpose and Effect, by Peter Philips,
University of Utah. 11/99 (91 pages)
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The comprehensive report on Kentucky’s prevailing
wage law analyzes actual construction cost data, historical information,
training, health and safety statistics to rebut the myths surrounding
prevailing wages. Beyond its focus on Kentucky, the author includes
a lengthy chapter on the history and economic impact of prevailing wage
laws on minorities in the national construction industry. The report
also examines the positive impact the Kentucky prevailing wage law has
had in improving worker benefits, training and job safety. The study concludes
that not only are prevailing wage jobs not more expensive, but they
achieve solid benefits in the form of lower injuries, greater minority
employment, a larger pool of skilled workers, and increased health and
welfare benefits.
Prevailing Wage Regulations
and School Constructions Costs: Evidence From British Columbia,
by Cihan Bilginsoy and Peter Philips, University of Utah. Journal of
Education Finance, Winter 2000. (22 pages)
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The report examines the proposition that eliminating
prevailing wages reduces school construction costs by analyzing the unique
final construction cost data from the United States and British Columbia. Specifically focusing on the prevailing wage law in British Columbia
(BC) where public construction wages must reflect 90 percent of the collectively
bargained wage rate for each construction occupation, the report utilized
final cost data from new elementary and secondary public school construction
projects from six school districts in BC tendered between 1989 and
1995. The conclusion of the study rebuts the proposition that BC’s
prevailing wage law was the sole or main factor in school construction
costs in the period examined.
Prevailing Wage Laws and
School Construction Costs, Mark
J. Prus, Ph.D., Economics Department, State University of New York.
1/99 (34 pages)
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This comprehensive study was commissioned at the request
of the Council of Prince George's County, Maryland to analyze the impact
of prevailing wages on actual costs for public school construction
projects in Maryland and the Mid-Atlantic States. The County was embarking
on a major six year capital program for the construction and renovation
of public schools and wanted four areas reviewed:
1. A comparison of school construction costs in states
with prevailing wage laws to those in states without prevailing wage
laws in the mid-Atlantic region.
2. A comparison of school construction costs within Maryland for those local
jurisdictions that pay prevailing wages to costs in those areas where prevailing
wage rates are not required.
3. An analysis of the extent to which local contractors have been harmed by
unfair competition from outside contractors due to the absence of prevailing
wage requirements on school construction projects.
4. An examination of the extent to which the absence of prevailing wage rates
in school construction impacts construction wages across the construction industry.
Based upon a statistical analysis of actual construction
cost data on individual school construction projects provided by the
F. W. Dodge Corporation, the study found conclusive evidence of the positive impact
of prevailing wage laws on construction quality, labor markets, worker
wages and construction costs.
Prevailing Wages and Government Contracting Costs: A review of the research, Nooshin Mahalia, Economic Policy Institute, Briefing Paper #215. 07/08 (20 pages)
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This report analyzes major research studies on the relationship between the cost of projects covered by prevailing wage laws and those that are not. The report finds that the studies cited by prevailing wage opponents are typically flawed; such studies often rely on hypothetical models which assume that higher wages lead to higher contract costs, without testing whether other factors eliminate the assumed costs. In fact, most modern studies find no cost impact on public construction projects associated with implementation of prevailing wage regulations. The report identifies possible reasons why the costs to the public body may be the same regardless of a wage difference, for example: contractors might pay the wages required under prevailing wage laws even if the law does not require it; labor costs are not the dominant costs in public construction projects; and costs may be offset by a rise in productivity.
