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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.
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.
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.
