Prevailing Wage laws require contractors who work on certain public projects to pay construction workers the region’s standards for hourly wages, benefits, and overtime, as calculated by the U.S. Department of Labor and Ohio Department of Commerce. These market wages are established by local standards and competitive practices.
A recent study by completed by Bowling Green State University, Kent State University, Colorado State University, and the Midwest Economic Policy Institute confirms that Ohio’s Prevailing Wage law is helping to rebuild Ohio’s middle class and strengthen the state’s economy.
According to this study, Prevailing Wage laws promote a skilled, highly-trained construction workforce. Download the study here.
Key findings of the study:
• Construction workers in states with Prevailing Wage laws are up to 30% more productive that their counterparts in states without the law.
• States without Prevailing Wage law have higher worksite fatality rates.
• Prevailing Wage repeal reduces registration in apprenticeship programs by 40%.
• Prevailing Wage prevents the use of cheap outside labor, promoting the use of skilled local craftspeople.
The study also concludes that labor amounts to just 23% of construction costs across the country.
To our west, Indiana Assistant Majority Leader Rep. Ed Soliday (R) told attendees at the 2017 TDA Economic Forum “We got rid of Prevailing Wage and so far it hasn’t saved us a penny… There is NOT a 22% cost savings when the total cost of labor is 22%.”
In neighboring West Virginia, the School Building Authority (SBA) is not seeing a reduction in construction costs that was promised with the repeal of Prevailing Wage. According to their March 2017 report, “The overall cost of school construction does not reflect a reduction of overall construction costs on SBA projects…At this time, the SBA is not realizing an overall savings.”
The report also notes that “The wages paid to an employee post-repeal are lower than those paid prior to the repeal,” giving an example of the “race to the bottom” that occurs when workers’ wages are not protected.
ACT Ohio works to defend and protect the State of Ohio’s Prevailing Wage Law, which has been in place since 1931. Through its support of the law, ACT Ohio is working to ensure the sustainability of a construction workforce that delivers quality projects on time and on budget and supports local economies.