Report: Prevailing wage repeal hurts skilled workforce, construction economy

A new study of Indiana’s prevailing wage repeal shows the repeal hurt state’s economy, workforce

LANSING – A recent, in-depth and non-partisan impact study found Indiana’s 2015 repeal of the prevailing wage reduced worker pay and didn’t save taxpayers money on public works projects.

“This study reinforces what we in Michigan know from our 1990s experiment with repealing the prevailing wage—it fails to save taxpayers money, and hurts Michigan’s economy and middle class,” said Mike Jackson, Executive Secretary-Treasurer for the Michigan Regional Council of Carpenters and Millwrights. “Repealing the prevailing wage is bad public policy that hurts hardworking Michiganders and hinders economic growth.”

Jackson was the special guest of Sen. Gary Peters at Tuesday night’s State of the Union address. Peters said he chose Jackson as his guest, “to highlight the importance of protecting prevailing wage laws that ensure skilled workers get a fair wage and taxpayers get their money’s worth when infrastructure projects are completed on budget and on time.”

The study–conducted by the Midwest Economic Policy Institute and authored by Frank Manzo and Dr. Kevin Duncan–comes at a time when Michigan is considering a ballot proposal to repeal the state’s prevailing wage law.

Major findings of the study include:

Wages dropped by as much as 15 percent across Indiana’s construction industry and growth in the state’s skilled workforce slowed.
The drop in wages forced contractors to turn to individuals with fewer skills to fill positions that previously would have been held by skilled workers with training beyond a high school education.
Workforce changes across Indiana’s construction industry resulted in a drastic loss in productivity, which negated any cost-savings on publicly-funded construction projects.

“We got rid of prevailing wage and so far it hasn’t saved a penny,” said House Assistant Majority Leader Ed Soliday (R-Valparaiso) during a forum in May of 2017. Soliday, who voted against the repeal in 2015, said claims that Indiana would save 22 percent on labor costs were “exaggerations.”

“So far, I haven’t seen a dime of savings out of it,” Soliday said.

Read the full study here: https://midwestepi.files.wordpress.com/2018/01/mepi-csu-effects-of-repealing-common-construction-wage-in-indiana-final.pdf

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