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Prevailing Wage Controls Costs

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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?

  • Labor only makes up 21% of total building construction costs in Kentucky. Reducing wages doesn’t produce any savings without paying workers illegally below minimum wage. However, productivity does drive the cost of construction. Skilled workers on prevailing wage jobs are 15% more productive than less-skilled workers.
  • Kentucky taxpayers get better project quality and self-sustaining jobs at no additional cost to the taxpayer. Lowering local standards for construction wages attracts a lower skilled, out-of-area workforce which results in large productivity losses, costly errors on the construction project, inefficient use of expensive materials and fewer jobs for Kentuckians.

*Kentucky’s Prevailing Wage Law, Phillips, P., 2014.

‘Hybrid’ police merit rules pass council

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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.

Read the full article

Who are my elected officials in Indiana?

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The Indiana Secretary of State’s office provides a great website for you to check out your elected officials. You can enter address in top left corner, and narrow results on right hand side all the way to school district! With contact information provided, we encourage everyone to reach out to your elected officials regarding issues of concern.

Prevailing Wage Protects Kentucky’s Taxpayers

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Construction workers in Kentucky contribute $20 million to state and local taxes. This allows policy makers to balance budgets and fund infrastructure and public safety without raising taxes on everyone else.

However, workers NOT paid prevailing wage are eligible for up to $8,000 in public assistance, which costs taxpayers for additional reliance on cash assistance, food stamps and unpaid visits to the emergency room. Taxpayers don’t save without prevailing wage, they SUBSIDIZE low-wage jobs.

Prevailing wage is the wage paid to skilled construction workers on publicly funded projects estimated to cost more than $250,000. The wages are set by Kentucky’s Labor Cabinet based on what construction workers in the area make on private sector projects. This forces big government to abide by local private sector economies.

[i]  Kentucky’s Prevailing Wage Law, an Economic Impact Analysis, Peter Philips, Ph.D., 2014.
[ii]  Economic Policy Brief, Working Partnerships USA, 2011.

Prevailing Wage Drives Kentucky’s Economic Development

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Every dollar spent on a prevailing wage project generates $1.50 in economic activity – that’s money spent at local businesses such as restaurants, shops and grocery stores – spurring additional job creation that keeps local businesses and economies strong.

In fact, the economic activity generated by prevailing wage projects supports 2,643 non-construction jobs in Kentucky!

Prevailing wage is the wage paid to skilled construction workers on publicly funded projects estimated to cost more than $250,000. The wages are set by Kentucky’s Labor Cabinet based on what construction workers in the area make on private sector projects. This forces big government to abide by local private sector economies.