DU Launches Study on How Wage Theft Occurs in Construction Industry

By: Anna Boiko-Weyrauch

March 4, 2015


A new study seeks to collect detailed information about how wage theft occurs in the construction industry in Colorado. The project, organized by the University of Denver will also extend legal services to research participants who have not received the wages they are owed.

DU students and law professor Raja Raghunath have already been answering legal questions at informal, street-side gatherings in Denver and Aurora where day-laborers assemble to find work.

Researchers expect to interview approximately 75 day-laborers by the time the project is completed next June, University of Denver anthropologist Rebecca Galemba said.

(Read More)

New Misclassification Study Shows Impact in California

By Jim Kollaer on Wed, 10/15/2014 – 10:30am 

In a September 2014 study entitled Sinking Underground: The Growing Informal Economy in California Construction, misclassification of more than 39,800 construction workers is a key reason that the underground economy in construction is contributing to the low wages, difficulty in recruiting qualified craft workers and loss of wages and taxes in the State of California.

According to the study, released by the Economic Roundtable, a non profit research organization based in Los Angeles, in 2011 more than 143,900 construction jobs in the state were “informal” – code for off the books, misclassified as independent contractors or unreported by employers.

The study looked at wages and construction jobs from 1972 to 2012 and found that the number of construction workers that were unreported or misclassified increased by 400% during that period.

The study cites that, “Specialty trades, such as drywall, have the highest level of informality with over 25% employed informally in 2012.  Building Construction was next, with 20% estimated to be informal.”The major impact on the industry is that those construction companies in California who are “doing it right” have costs that are 30% higher that the “off the books and misclass” contractors.  Imagine what that disparity does to the bidding process.  The report cites several personal stories to illustrate its points.

Repeal of prevailing wage law would result in a weakened economy, University researchers say

Pressure from increasing state budget deficits, as well as debt from underfunded pensions, have caused critics to call for the repeal of Illinois’ prevailing wage law for government construction projects.

However, according to new research co-authored by a University labor expert, Illinois’ prevailing wage law creates many positive economic and social impacts, and repealing it would not result in any considerable savings for taxpayers or the state.

“We have a strong prevailing wage law in Illinois,” said Robert Bruno, professor of labor and employment relations. “It’s better than most states in that it assures public projects are done efficiently and on time with the best results possible.”

(Read More)

(Full PDF Copy of Study)