Prevailing Wage repeal hurt labor, businesses and communities

Frank Manzo, Executive Director of Illinois Economic Policy Institute, joined the America’s Work Force Union Podcast and discussed the results of a study that focused on six states that repealed their Prevailing Wage laws and the impact it had on construction workers, businesses and communities. 

Between 2015 and 2018, six states - Indiana, West Virginia, Kentucky, Wisconsin, Michigan and Arkansas - repealled their Prevailing Wage laws under the guise of saving taxpayer money. None of the six states realized a savings from the repeal of Prevailing Wage. Instead, they placed more financial burdens on taxpayers, Manzo said.

According to the study, the repeal of Prevailing Wage created a multitude of unforeseen consequences that centered around the wages of construction workers, jobsite productivity, on-the-job fatalities and a newfound reliance on government assistance. The study found that wages for construction workers decreased, which directly correlated to a decrease in jobsite productivity. Furthermore, on-the-job fatalities drastically increased as lesser-skilled construction workers were utilzed. This lead to a 2 percent increase in the number of construction workers who became reliant on food stamps, he said.

Construction workers were not the only people affected, as the study found the repeal resulted in negative consequences for local communities and businesses. This was a result of in-state contractors losing bids to out-of-state contractors, who used a less skilled, out-of-state construction workforce. These transient workers did not spend money in the local communities to support local businesses like the local construction workforce did, Manzo added.

Learn more about the results of the study by listening to the full episode.