Study Defends Prevailing Wage Practice For Public Construction Projects

A new study, commissioned by one of Connecticut’s construction unions, defends the practice of paying prevailing wages on public construction projects. The Connecticut Construction Labor Management Council contends that lowering wage rates would be counterproductive. WNPR’s Harriet Jones reports.

Since the 1930s, it’s been mandated that public sector construction jobs pay what’s known as prevailing wage – wages that are comparable to those in the local area. The system is designed to prevent low bid requirements from slashing labor costs to a level that would disrupt the local economy. But as belts tighten, some policy makers are looking for ways to save taxpayer dollars, and help ease the state’s budget crisis by driving down wages. The Connecticut Conference of Municipalities has called prevailing wage an unfunded mandate, and says the wages it supports are exorbitant and unnecessary. State senate Republicans have twice introduced legislation that would reform the system. Some critics contend that the state could save as much as 30% on public sector construction by making changes. But Benedict Cozzi of the Connecticut Construction Labor Management Council believes that’s nonsense.

"How far can you cut people’s wages? The labor portion of a construction project is typically approximately 30%, so consequently if you’re going to save 30% you’re going to have people working for free. I don’t know that that does any of us any good."

The union commissioned a study looking at the economic impact of prevailing wage legislation. It was conducted by Dr. Peter Philips, Chair of the Economics Department at the University of Utah. He concludes that repealing prevailing wage could cost the state more than $400 million annually in lost income because of lower earnings and lower demand for local products and services. The state could also lose up to $30 million in reduced income and sales tax.

For WNPR, I'm Harriet Jones.