Building Trades, Features, Labor News Briefs, Law and Politics, National

Study Says Indiana Prevailing-Wage Repeal Cut Pay, Didn’t Save Money

February 6, 2018

By Steve Wishnia and Neal Tepel

INDIANAPOLIS, Ind.—Indiana’s 2015 repeal of its “common construction wage” law cut building-trades workers’ pay while failing to reduce public-works

Loss of prevailing wage is a lose-lose in Indiana.

projects’ costs, according to a study done by the Midwest Economic Policy Institute for the Times of Northwest Indiana. The study, published Jan. 29, found that average construction wages in Indiana fell by 8.5% after the repeal, with a 15% loss for the lowest-paid workers. In contrast, building-trades wages in the neighboring prevailing-wage states of Illinois, Michigan, and Ohio went up by 2.8%. While the cost of public-works projects in Indiana after the law was 2.1% less per hour of labor, the study found, that was offset by contractors hiring less-skilled workers who were 5.3% less productive per hour. In the three nearby states, it said, workers’ productivity increased more than twice as much from 2014 to 2016 as it did in Indiana. “Repeal of prevailing-wage laws does not save taxpayer dollars, but it shrinks middle-class paychecks, hurts the economy, and causes problems ranging from lower productivity to higher turnover for the construction industry,” coauthor Kevin Duncan told the Times. Then-governor Mike Pence pushed hard for the repeal, saying it would be “putting hardworking taxpayers first.”

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February 6, 2018

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