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Prevailing Wage Myths Busted

Prevailing Wage laws have been a centerpiece of Minnesota’s excellent construction industry.  In brief, these surveys of prevailing wages paid in various parts of the state allow local contractors to pay fair wages on local jobs without out-of-town fly-by-night shysters who don’t care about our communities undercutting contractor bids by slashing wages (a practice which naturally also tends to attract less-qualified workers.)Minnesota’s prevailing wage laws protect our local business owners and their workers.

There are some contractors that are unhappy their business mode (paying workers less) just doesn’t fly in Minnesota. They place similar sized bids, of course, but to compete for projects covered by prevailing wage agreements (not all construction projects are) they’d have to pay employees more fairly rather than the owner getting a big bonus. When such cut-rate business owners aren’t allowed to lowball their competitors on how little they can pay their workers, or pass along cost over-runs from slow or shoddy work — in other words when they’re forced instead to compete on skill, efficiency, and work quality — they whine, and try to change the rules.

MN prevailing age laws have protected and helped working familiesSo instead of investing in training, paying their people more or getting better at what they do – they are trying to drive wages down to their level.

This is a big issue for Minnesota’s construction workers. There is a group of people that are trying to devalue the highly-skilled, highly-trained labor that sets Minnesota well-above the average just to line the owners pockets.

Here are some of the issues that frequently are discussed regarding Prevailing Wage – it’s important to correct the myths and half-truths.
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Prevailing Wage rollbacks actually undermine outcomes

Hard Facts:

  • Comparing school construction costs before and after Michigan’s suspension of its prevailing wage law revealed no difference in costs.
  • National analysis of data on school construction costs reveals that prevailing wage laws do not have a statistically significant impact on cost.
  • In Pennsylvania, when prevailing wage levels were lowered substantially in rural areas during the second half of the 1990s (a period of declining unemployment and rising prices), school construction costs went up more in areas where prevailing wage levels fell the most.

The gap between “in theory” and what actually happens:

The authors of a recent survey (linked below) discovered that opponents of “Prevailing Wage” are often ignoring real-world cases and research – so opponents are perpetuating the myth that prevailing wage laws raise costs by using flawed “hypothetical” situations, assuming nothing else changes when wages and benefits on projects are slashed sharply.

But the study, as detailed in a press release late last year, makes it clear that assuming nothing else changes is – well – just a bad, unfounded assumption.
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Union Dues?

Union Life, courtesy of BCTD

One of the things often thrown up as a reason to avoid union membership is “dues.” They vary from place to place, but in general terms $1/day or so is not a huge burden when you understand what it buys you.

A brief video from the Building and Construction Trades Department (BCTD) helps put it all into perspective.

Soundbite: Life in the Trades

featured image
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