West Virginia Prevailing Wage Repeal Increases Construction Costs
The repeal also slowed wage growth and caused an increase in on the job injuries
In May of 2016, West Virginia repealed the state’s prevailing wage law. This law, known at the federal level as Davis-Bacon, requires that construction projects that are paid for with state money pay a “prevailing wage” or an average of the wages for that industry in the area. Prevailing wage laws prevent construction projects from becoming a race to the bottom and provide good-paying, middle-class jobs.
When West Virginia abolished the law, state officials claimed that without a prevailing wage, costs would go down. They specifically claimed that school construction costs would be significantly decreased. However, three years later this has not been the case. The study found that after the repeal, the price of school construction actually increased from $252 per square foot to $255 per square foot, a 1.4% increase.
A new study from the Midwest Economic Policy Institute found that in the past three years there have been no savings in construction. Instead, the wages for construction workers have stagnated growing at just .8% between 2016 and 2018. Carpenters, Operating Engineers, and Electricians all saw pay decreases of between 1.3% and 5.5%. In comparison, construction workers in three surrounding states with a prevailing wage, Ohio, Maryland and Pennsylvania, saw their wages increase by 1.2%.
An important aspect of prevailing wage laws is that they allow unions to compete for jobs. This means that more construction workers are skilled, having gone through an apprenticeship program. Since the prevailing wage repeal, new apprentice enrollment has dropped by 19.5%, while neighboring states saw an 8.1% increase in apprentice enrollment. This means that not only will future West Virginia construction workers make less money, but they will not be as well trained as their neighbors. There is also a safety concern, as union job sites have stronger safety rules and all of their workers are trained in proper safety procedures. Sadly, the Midwest EPI study also found that on the job injuries have increased by nearly 17% since 2016 while falling by 9.5% in neighboring states.
The numbers are clear, West Virginia’s decision to eliminate prevailing wage laws have not only cost construction workers money, but it is also putting their lives and their safety at risk and unlike the politician's promises, school construction increased. Prevailing wage supporters are hoping that to use this new information to pressure state officials to consider reinstating the prevailing wage.