Repeal of prevailing wage law would result in a weakened economy, University researchers say

Posted by National Alliance for Fair Contracting on

Pressure from increasing state budget deficits, as well as debt from underfunded pensions, have caused critics to call for the repeal of Illinois’ prevailing wage law for government construction projects.

However, according to new research co-authored by a University labor expert, Illinois’ prevailing wage law creates many positive economic and social impacts, and repealing it would not result in any considerable savings for taxpayers or the state.

“We have a strong prevailing wage law in Illinois,” said Robert Bruno, professor of labor and employment relations. “It’s better than most states in that it assures public projects are done efficiently and on time with the best results possible.”

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(Full PDF Copy of Study)

Income inequality is fixable in construction

Posted by National Alliance for Fair Contracting on

Across the country, states and localities can respond to the President’s call to action and grow wages, create jobs, and reduce income inequality in at least one sector: the construction industry. Today, the Illinois Economic Policy Institute (ILEPI) is pleased to release a new study co-authored with Professor Robert Bruno, a labor expert at the University of Illinois at Urbana-Champaign, on labor market institutions in the construction industry.

The study, Which Labor Market Institutions Reduce Income Inequality? Labor Unions, Prevailing Wage Laws, and Right-to-Work Laws in the Construction Industry, finds that prevailing wage laws did a good job matching common construction rates with the actual market price of labor, increasing worker incomes by just 1.2 percent. On the other hand, they have no negative effect on the total incomes of contractor CEOs. Prevailing wage laws, the data show, reduce income inequality between the highest earners and the lowest earners of the construction industry by 45.1 percent.