The Illinois Policy Institute Receives a Failing Grade on Prevailing Wage (IL)

Published by Frank Manzo, IV
December 7, 2017

A new report released by the Illinois Policy Institute on prevailing wage is factually inaccurate. Here’s why.

The Illinois Policy Institute is a libertarian policy organization with close financial and lobbying ties to Illinois Governor Bruce Rauner. None of their research has ever been subject to peer review. On December 6, 2017, the Illinois Policy Institute released a report calling for the repeal of the Illinois Prevailing Wage Act- a longstanding goal of Governor Rauner. This brief highlights the biggest problems and factual inaccuracies in their report.

Inaccurate Claim #1: “The empirical literature is still divided on the impact of prevailing wage on construction costs.”

Fact: Most peer-reviewed studies (over 75 percent) have concluded that prevailing wage laws have no impact on total public construction costs.

“We got rid of prevailing wage and so far it hasn’t saved a penny.” -Rep. Ed Soliday, Assistant Republican Floor Leader, Indiana House of Representatives, 2017

Inaccurate Claim #2: Prevailing wage laws “favor disproportionately white, unionized workers.”

Fact: By stabilizing the wage floor, prevailing wage reduces income inequality among construction workers of all backgrounds. Prevailing wage standards cover construction workers of all races- union and non-union alike. Peer-reviewed research has found no relationship between prevailing wage laws and the racial composition of the construction labor force. Over the past 10 years, the union membership rate was higher for African-American workers in Illinois’ construction and extraction occupations than for comparable white workers.

“Davis-Bacon has been instrumental in bridging the wage gap for historically disadvantaged sectors of our society. In the face of decaying social and economic opportunities, this measure provides women and minorities with an important tool to achieving greater parity with their mainstream counterparts.”
-Congressional Black Caucus, 1995.

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