Drawn from projects across the country, these studies show that prevailing wage benefits taxpayers, cities, businesses, and workers. For example:
- For cash-strapped cities, prevailing wage controls construction costs. Public works prevailing wage projects average $6 per square foot less expensive than non-prevailing wage public works projects (Phillips 1999). Prevailing wage attracts skilled, experienced workers who produce superior projects that last longer and incur much lower repair and maintenance costs. Workers on prevailing wage projects produce 13-15% more value added per worker than non-prevailng wage projects (Phillips 2006). Skilled construction workers on prevailing wage projects are 20% more productive than less skilled workers on non-prevailing wage projects (Fiscal Policy Institute 2006).
- Prevailng wage jobs build the tax base. Families that earn prevailing wages often own their own homes, which provide local businesses with a stable, long-term property tax base. This builds the general fund. By contrast, through low-wage, temporary, short-term work employers often evade taxes and keep workers dependent on government services.
- Prevailing wage jobs grow local economies. Families with more disposable income also spend more in local businesses. Their earnings multiply throughout the local economy (the multiplier effect). Each dollar paid in prevailing wages produces $1.50 in economic activity (Zandi 2010).
- Prevailing wage provides pathways to middle class careers. The schools, fire stations and community centers a city builds benefit the community, and it only makes sense that its jobs should too. Rather than offer low-wage, unstable work opportunities, prevailing wage projects build on apprenticeship programs that train skilled workers for lifelong careers.
- Phillips, Peter, Ph.D., Presentation on Prevailing Wage Laws, Michigan Prevailing Wage Symposium, March, 1999.
- Phillips, Peter, Ph.D., Quality Construction-Strong Communities: The Effect of Prevailing Wage Regulations on the Construction Industry in Iowa, University of Utah, 2006.
- The Fiscal Policy Institute, The Economic Development Benefits of Prevailing Wage, May, 2006.
- Zandi, Mark. “Using Unemployment Insurance to Help Americans Get Back to Work: Creating Opportunities and Overcoming Challenges,” Chief Economist, Moody’s Analytics. Testimony before the State Finance Committee. April 14, 2010.
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