Study Shows Indiana’s Repeal of Prevailing Wage did not Save Money

According to a recently released report, the repeal of Prevailing Wage laws in Indiana has not saved the state money.

Since the Hoosier state’s Prevailing Wage law was repealed in 2015, construction wages fell by an average of 8.5 percent according to a study by the Midwest Economic Policy Institute.

Once the legislation was repealed, the study showed construction workers were 5.3 percent less productive per hour, which more than offset the benefits of paying workers lower wages. The lowest paid construction workers in Indiana saw their paychecks decrease by an average of 15.1 percent, while wages for tradesmen and tradeswomen in neighboring states rose 2.8 percent.

Indiana State Rep. Ed Soliday (R-Valparaiso), who voted against the repeal of Prevailing Wage, told The Times of Northwest Indiana the study confirms the repeal hurt the state’s economy.

“When you go out-of-state and so forth, and just chase price instead of the overall macroeconomic contribution, you wind up weakening your own community,” he said.

Among the groups hurt by the repeal were veterans, who saw a 1.2 percent drop in construction industry employment.

Researchers also found the claim that repealing Prevailing Wage would increase construction project bid competition to be false. Records showed an average of three bids per school project prior to the repeal, but after the law went into effect, projects received an average of 2.9 bids per project.

Executive Director of Affiliated Construction Trades (ACT) Ohio, Matt Szollosi, said in a prepared statement said he was not surprised by the Midwest Economic Policy Institute research results.

“The new numbers out of Indiana support the findings of the 2017 study conducted in Ohio by researchers from Bowling Green State University, Kent State University, and Colorado State University,” Szollosi said.

“Both studies reveal that repeal of prevailing wage would result in lower wages for skilled construction craftsmen and women. The lower wages and loss of healthcare coverage for those middle class workers would force many onto public assistance,” said Szollosi.

The Northwest Ohio Building and Construction Trades Council strongly believes that Prevailing Wage laws are a benefit to the state economy and in the best interest of Ohio.

Click here to learn more about Ohio’s Prevailing Wage law.

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