Public construction policies play a crucial role in shaping labor standards and project costs. Prevailing wage laws are designed to ensure that workers on public construction projects receive fair compensation. However, oftentimes these policies create unintended consequences. By setting pre-determined wage rates, state-level prevailing wage laws reduce competition and increase administrative burden, contributing to higher construction and compliance costs. In response, many states have revisited these policies. Fourteen states have fully repealed their prevailing wage laws, while ten states have never had an active state-level prevailing wage law.

This article explains how prevailing wage laws operate, uses data-driven research to outline consequences, and highlights solutions that other states have adopted when modifying or repealing these laws.

Capitol Leaders Prevailing Wage One-Pager