New Prevailing Wage Study is Extremely Useful for Explaining Falsehoods

March 10, 2015 - A new study from the West Virginia Center on Budget & Policy, “West Virginia’s Prevailing Wage: Good for Business, Good for Workers” by economist Sean O’Leary, should prove extremely useful for Building Trades unions seeking to disprove the claims of prevailing wage opponents that prevailing wage significantly increases the cost of public construction. The Center is a independent non-partisan, non-profit, statewide organization that is dedicated to efficiency in government.

Specifically, the study concludes that prevailing wage laws do not raise costs, and that any impact of higher wage is offset by the positive effect on productivity and quality. What makes this study especially useful is that the author analyzes the math behind opponents’ claims that prevailing wage increases cost, and uses that math to prove that their claims are obviously absurd. He demonstrates that labor constitutes far too small a percentage of overall construction costs to produce meaningful savings, proving that such savings would require wages to be slashed upwards of 70 percent, to subpoverty levels, without any loss of productivity, in order to occur. Therefore, he finds, those claims are “implausible and based on hypothetical assumptions, ignoring actual experience, evidence and data.”

You are encouraged to read the study, make copies, and share it with local government or school officials interested in the effect of prevailing wage on overall cost.

The study can be found here:

http://www.wvpolicy.org/wp-content/uploads/2015/01/prevailing-wage-brief3.pdf

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