Repealing IL’s prevailing wage law would boost construction sector employment by 14,000 jobs

December 6, 2017

New report looks into economic impact of Illinois’ prevailing wage law on jobs growth, public construction costs

CHICAGO (Dec. 6, 2017) – In a state lagging behind the rest of the nation in jobs growth, repealing an outdated state law could provide hope for struggling Illinoisans and overburdened taxpayers, according to a new report by the Illinois Policy Institute. 
“Building fairness and opportunity: The effects of repealing Illinois’ prevailing wage law” is an economic impact report that looks into the effect of the Prevailing Wage Act on Illinois’ modern economy.
Illinois’ prevailing wage law sets wages for work on government projects for workers such as carpenters, electricians and operating engineers, based largely on union rates. 
While prevailing wages differ from county to county, the report found that the average prevailing wage in Illinois is 40 percent higher than the average wage for private construction jobs in the same area.
Highlights from the report include:
  • 21 states do not have a prevailing wage. The nine states that have repealed their prevailing wage laws saw an 8 percent average increase in construction sector employment. In Illinois, repealing the prevailing wage law would translate to 14,000 new construction jobs over the next 10 years.
  • Data from the Bureau of Labor Statistics indicate construction jobs in Illinois are slow to recover from the Great-Recession, still down nearly 30 percent over the last decade. 
  • If Illinois repealed its prevailing wage law, it could see average taxpayer savings of 10 percent on public construction projects.
Quote from the expert, Chief Economist Dr. Orphe Divounguy:
“Illinois’ prevailing wage law is an unfair policy that benefits a few at the expense of the many. Given the sluggish construction sector recovery from the Great Recession and the state’s weak labor market, it’s unreasonable for the government to artificially raise labor costs.
“By repealing Illinois’ prevailing wage law, not only can we save hard-earned tax dollars, but we can boost construction employment, which struggling Illinoisans need desperately. Faster job creation will lower the unemployment rate and lead to wage growth.”
The full report “Building fairness and opportunity: The effects of repealing Illinois’ prevailing wage law” is available at http://illin.is/prevwage.
For bookings or interviews, contact Kayla Weems at media@illinoispolicy.com or (312) 346-5700.