Saturday, April 5, 2008

Prevailing Wages Yield Beneficial Results

Studies indicate that higher wages have minimal impact on construction cost

The issue of paying prevailing wages to construction workers on publicly funded projects was the center point of public dialogue recently as a result of a Feb. 7 article in the Star-Gazette. I feel that equally pertinent information regarding prevailing wages was not reflected in the article.

As defined by the New York State Department of Labor, "Public Work Prevailing Wage is the pay rate that is required to be paid to all private workers (non government) on all public work projects." Also, as a point of reference for this guest view, many if not all publicly funded work projects come through the facilitation of a local Industrial Development Agency. Tax abatements and other incentives are provided to a business entering the local economy with assistance from an IDA.

Those who oppose paying workers prevailing wages on publicly funded projects point to a recent report produced for the New York State Economic Development Council by the Center for Governmental Research from Rochester. This report indicates that paying prevailing wages significantly drives up project costs.

In order to better understand this important issue, we should take into consideration what other studies conducted across the United States have determined. It is never beneficial to have one-sided information presented on any issue, particularly on this important issue of wages and jobs.

In 2001, a study that spanned 14 years conducted jointly by the Construction Labor Research Council and the Federal Highway Administration provided the following conclusive summary: "Skills and productivity, not differences in wage rates, are the critical determiner of bottom line labor costs. There is no basis to the claim that lower wage rates result in lower construction costs".

Another study from 2001 by the University of Utah assessed 391 public school construction projects across three states. The study concluded that implementing prevailing wages raised school construction costs by less than 1 percent, a statistically insignificant result. This study also determined that young, less-trained workers have an injury rate 15 percent higher than highly trained, experienced workers.

Paying prevailing wages assures that those construction workers selected for publicly funded projects have participated in trade apprenticeships, continuous safety training programs and ongoing skill development coursework. An emphasis on career education and self-improvement is beneficial for the individual worker, the trade she/he works in and the community.

Solid and consistent training also means that highly skilled workers are more productive and in many instances complete projects under budget and ahead of schedule. This is a plus for taxpayers, as waste is minimized and quality end-products are constructed.

This debate will certainly continue, but I believe paying prevailing wages can bring positive results for individuals and our community.

1 comment:

  1. We in the building trades know he value of Prevailing Wages.

    Now we have to keep the pressure on the civil servants and the elected officals to


    It should be a true crime with jail time for companies for robbing workers.

    Work Safe.


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