Understanding the economic impact of prevailing wage

By Kevin Duncan

Wednesday, September 9, 2015

 

As a practicing economist for the last 30 years, I have spent much of that time studying the impact of prevailing-wage policies. And I was heartened to see that George Hawkins had looked at some of my recent work.

Mr. Hawkins rightly notes that too often, the debate over the merits of prevailing-wage policies has devolved into ideologically based arguments and conspiracy theories – neither of which is rooted in fact or data-driven analysis.

Peer-reviewed economists enjoy no such luxury, and that’s what has made a series of new impact analyses about prevailing wage – analyses that for the first time model the impact of these policies on broader economic factors such as job creation – so important, and so discomforting for those who oppose these standards.

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[PR Watch addresses forces behind prevailing wage repeal]

ALEC, NFIB Push Prevailing Wage Repeal

Posted by Jody Knauss on March 24, 2015

Lower Wages for Workers, No Savings to Taxpayers

Studies have consistently found that prevailing wage laws do not increase government contracting costs, and repeal of prevailing wage laws does not save taxpayer money, primarily because higher-wage construction workers are much more productive. An exhaustive study using a database of 150,000 construction projects over the period 2003-2010 compared the eight Midwestern states with prevailing wage laws to the four without and found per-square-foot construction costs to be equal or lower in prevailing wage states. Taxpayer savings associated with the absence of a prevailing wage law: zero.

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