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A study of 3 states – including Kentucky – found no meaningful cost difference on school construction comparing states with and without prevailing wage.*
Why do the costs not go up with prevailing wage?
*Kentucky’s Prevailing Wage Law, Phillips, P., 2014.
Source: BuildingStrongCommunities
High skilled workers finish projects on time and build quality roads and buildings meant to last – leaving tax payers with no cost overruns and lower maintenance costs over time. Projects built with common construction wage protect the taxpayers’ investment for several reasons. Productivity is the driving force behind the cost of construction. The high level of training and efficiency among common construction wage workers save taxpayers costly delays and errors. Skilled construction workers on prevailing wage projects are on average 15% more productive than less skilled workers on non-common construction wage projects. Workers are more productive while building a higher quality product that saves taxpayers in maintenance costs. Without prevailing wage policies, taxes would increase for residents.
Common construction wage jobs directly support privately funded training programs that prepare folks for successful middle class careers. In Indiana alone, the total support is about $42 million a year of private funds. Without prevailing wage, this support would disappear and taxpayers would be on the hook to pay to train the labor force. In addition, typical workers not paid the common construction wage are eligible for thousands of dollars in public assistance, which costs taxpayers for additional reliance on cash assistance, food stamps, and healthcare – taxpayers don’t save, they subsidize.
Source: BuildingStrongCommunities
Prevailing wage protects communities from unnecessary costs over the lifetime of a project. Research shows that lowering local standards for construction wages tends to attract a lower skilled, out-of-area workforce which results in large productivity losses on the construction project. These workers require more supervision and their work often needs additional review and repair before it can be deemed safe and secure.
Communities also may lose revenue through lower tax income that’s a result of local worker wages, which will also force taxpayers to subsidize the social services costs for low-wage workers eligible for government assistance.
Projects paying the prevailing wage create local jobs because they are more likely to employ local residents. States that maintain prevailing wages ensure that local contractors and local residents can compete for the work their hard-earned tax dollars fund. Local contractors bid on quality and productivity and out-of-state contractors don’t bring in a low-wage workforce that take jobs from local construction workers.
Common construction wage projects also directly support local training programs. These programs give local residents an entry point into a career in the building trades, and the people who benefit the most often come from communities surrounding prevailing wage projects. Others who benefit are our veterans, many returning from active duty in Iraq and Afghanistan. Through the Helmets to Hardhats program, these men and women receive the necessary training to successfully re-enter the civilian workforce. They learn skills that pay a wage such that they can support themselves and their family after serving their country. As government money for the Helmets to Hardhats continues to become less reliable, it’s more important than ever to maintain common construction wage jobs that support these programs.
Training programs also offer opportunities to young people, especially those unable or uninterested in pursuing a college degree. These training programs are open to anyone willing to learn a skilled trade and work hard. On-the-job training prepares them for a productive career, one that allows them to learn while they earn. The training programs also team with colleges to offer college credits for apprenticeship training. Once they graduate, these young people work to receive a wage adequate for supporting a family and contributing to their home community.
Prevailing wage is directly linked to job creation by generating jobs for local construction professionals, giving people an opportunity to learn a skill, earn a living, and support a community.
The benefits of paying prevailing wage extend far beyond workers’ paychecks. Those paychecks set in motion an economic ripple effect that quickly lifts the bottom lines of local businesses, shops and service providers. When working families have money to spend, they do so at local restaurants, shopping malls, and grocery stores– spurring additional job creation that keeps communities and businesses strong. In fact, studies show that every dollar spent on a prevailing wage project generates $1.50 in economic activity in the community.
Businesses looking to establish themselves in new cities look for this type of environment where a solid community and workforce will help their business grow. Contractors who pay workers as little as possible on public projects create high turnover in a workforce that has little or no consumer spending power to support local businesses. Businesses do not move into areas where low wages are the predominant means of income.
The concept of paying minimal or subsistence wages to save money is an illusion created by D.C. lobbyists interested only in increasing profits for their big business clients, and hurts our communities in the long run. With labor costs typically amounting to about 23 percent of public works construction project costs, a wage decrease of 10 percent would only affect overall project costs by 2.2 percent. That marginal savings evaporates long before a project is completed in errors and missing deadlines. Lower wages means lower-skilled workers, so projects go over time and over budget.
As for the city and local government, they are often left with substandard quality roads, bridges, and buildings that just don’t last. Taxpayers must pay for ongoing maintenance and repairs. Many of the low-wage workers are pushed into relying on government subsidies for healthcare, housing and other social services — all at taxpayer expense.
HAMMOND, Ind. -Carpenters from the Indiana/Kentucky/Ohio Regional Council of Carpenters (IKORCC) finished work on the new Commercialization and Manufacturing Excellence Center in Hammond. The Center, created as a collaboration between Purdue University and WJOB, is state-of-the-art and will be used specifically for workforce development in advanced manufacturing for achieving technological solutions and entrepreneurship.
Jim Slagle, IKORCC Representative and member of Local 599, said, “It was great to be part of this project. As union carpenters we are highly trained, and with such a cutting-edge facility, we definitely got to put that training to great use.”
Owner of WJOB, Jim Dedlow, was thrilled with the work the carpenters provided. “The quality of the work and efficiency of the workers was amazing,” said Dedelow. “They took great pride in their work.”
Slagle added, “This was also a great project for the entire region, and this building will be an asset to the local economy. As our community members utilize the facility and receive top-notch training, they will be able to better their careers, their families and ultimately our community and economy.”
The council approved changes to Terre Haute’s “responsible bidder ordinance,” which proponents say would help ensure city public works projects use the best qualified workers and that contracts that bid are “using the same level playing field.”
The council first adopted a responsible bidder ordinance in 2010 Under the changes, bidders on city public works projects “shall provide evidence of participation in apprenticeship and training programs … which are approved by and registered with the U.S. Department of Labor’s Office of Apprenticeship, or its successor organization.”
The changes would apply to any general contractor bidding on a city public works project, as well as subcontractors, he said.
The tougher language also should help ensure local bidders are awarded the contracts, Joe Bolk, business manager for Laborers Local 204, said previously.
While the changes mean contractors would have to have registered apprenticeship programs, the changes don’t require that union labor be used, advocates say.
A relentless drizzle and temperatures in the low 40s weren’t enough to knock the Christmas spirit out of about 3,000 parade-goers Saturday morning in downtown Akron.
Spectators lined both sides of Main Street, three or four deep in some places, as more than 75 units slogged through the rain in the city’s annual Welcome Santa Holiday Parade.
Although the event is a longstanding local tradition, there was nothing remotely provincial about it. Among the spectators was a woman from Cleveland Heights who said she makes the trip often because nothing in Cleveland matches up.
“We come here because it’s a very nice family occasion for the Christmas holidays,” said Kathie Demetz. “We have a lot of nice Christmas activities in Cleveland, but we don’t have a nice parade like this.”
She was sitting in a folding chair between her grandchildren, Sammy Grace, 4, and Bear Grace, 2. All three wore Santa caps. Bear wasn’t quite as enthusiastic as the other two, occasionally nodding off in his stroller.
Older kids along the route scampered around in the rain, fishing candy out of puddles.
Parade announcer Jasen Sokol of WAKR (1590-AM) noted early on that the day coincided with the big Ohio State-Michigan football game. His call of “O-H” elicited a boisterous “I-O” response from those near the main stage, located in front of KeyBank, directly across from Lock 3.
Someone else suggested adding a cheer for another hometown favorite. “What about the Zips?” yelled out a woman across the street.
Sokol immediately jumped onboard, pointing out that the University of Akron is bowl-bound after Friday’s win over archival Kent State. The enthusiastic Zip fan also was an out-of-towner — the mother of redshirt freshman Hayden Grover, a long snapper from upstate New York.
Grover’s mother, Kim, and father, Jeff, made the 5½-hour drive not only to watch Friday’s game but also to watch their son sing with Nuance, UA’s all-male a capella group, which took the stage at the close of the parade.
The Grovers have become huge fans of the school and the city.
“We’re thrilled,” said Jeff. “Coach [Terry] Bowden’s done a great job. We’ve fallen in love with the city of Akron and the whole Akron community. It’s been an overall positive experience for our son here.”
Nuance performed briefly before hiking across the street with Santa. Yes, Santa arrived on schedule despite the absence of snow.
Although no reindeer were visible, the hourlong parade included horses and dogs and elves, oh my.
The units spanned the spectrum, from unicyclists to police and fire to private contractors to classic automobiles to public officials to dancers and marching bands of all ages.
