PERPETUAL STATE BUDGET DEFICITS and mounting debt have re-ignited claims that repeal of Illinois’ prevailing wage provisions will cut public construction costs and save taxpayers money. Critics of prevailing wage laws (PWLs) assert they inflate the costs of government contracts by compensating labor at levels higher than market wages. Contrary to opponents’ claims, findings from this study indicate that Illinois’ PWL is associated with a number of positive labor market outcomes for construction workers at costs that are either negligible or fully offset. Additional labor costs associated with the statewide PWL are outweighed by other substantial positive impacts for the state economy and Illinois taxpayers.
This study, conducted by researchers at the University of Illinois at Urbana-Champaign and Michigan State University, serves as the first comprehensive examination of the economic and social impacts of the statewide PWL for public construction projects in Illinois.