An Ovtober, 2013, study from the University of Illinois concludes that repealing the Prevailing Wage Law would not cut the cost of building taxpayerr-funded buildings. (This came to my attention on Capitol Fax Blog.)
You can read the summary below:
1. Prevailing wages do not lead to increases in costs of public construction projects.
In all likelihood, total construction costs would not be greatly affected by repeal of Illinois’ PWL due to potential changes in workforce, productivity, and management practices associated with the policy change. Indeed, repeal of Illinois’ PWL would likely cost the state money, result in job losses, and reduce construction sector effi ciency.
2. Repeal of Illinois’ PWL would result in job losses throughout the state, decreased GDP, and millions of dollars in lost tax revenue.
This study forecasts that employment in the construction industry would likely increase should the statewide PWL be repealed. However, any new jobs linked to repeal would be significantly offset by job losses experienced throughout the rest of the economy. These indirect effects of repeal would result in about 3,300 net jobs lost, in a total GDP contraction of more than $1 billion annually for Illinois, more than $44 million in lost state and local taxes, and roughly $116 million in lost federal tax revenue. Within the state, the negative results are comparable for each of the eight regions studied.
3. More construction workers would suffer fatal work-related injuries if Illinois’ PWL is repealed and construction workers would lose many of their work-related benefits.
If the prevailing wage were to be repealed in Illinois, it is estimated that an additional seven Illinois construction workers would lose their lives on an annual basis. Extrapolated over the span of a decade, approximately 70 additional Illinois workers would suffer fatal work-related injuries in the construction industry due to the repeal of the state’s PWL. It can also be anticipated that employer contributions to both legally-required and fringe benefi ts for construction workers would dramatically decline.
4. PWLs encourage apprenticeship training in the construction industry.
The data examined in this study strongly affi rms the claim that state PWLs are supportive of construction apprenticeship programs. Study findings suggest that state PWLs support the construction training system, a critical component for an industry continually concerned about the availability of sufficiently skilled workers.
5. PWLs do not reduce participation of African-American workers in construction trades.
Finally, this study finds no substantial evidence that state PWLs are harmful to African-American participation in the construction industry. Claims that states with PWLs have reduced African-American participation in construction are based on simplistic analyses which are, at best, descriptive and unconvincing. More advanced work finds no evidence that PWLs act to the detriment of African-American workers. In summary, prevailing wages for public construction projects in Illinois provide numerous positive economic and social impacts for both construction workers and the state on the whole. This study predicts that repeal of Illinois’ PWL would not result in savings for taxpayers or the state or lead to increased employment of African-American construction workers. Rather, repeal of Illinois’ PWL would result in job losses throughout the state’s economy, increased construction worker fatalities, and declines in valuable social impacts such as construction worker benefi ts and training opportunities.
I’ve gone to various meetings at the city, township, and county levels.
Every single governing body I’ve encountered said it increases costs and have the numbers to prove it.
And what the hell do work related deaths have to do with compensation?
If a beam falls on your head, it doesn’t ask you what kind of insurance you have.
These wages shouldn’t be set by the state, they should be set by municipalities who manage their own budgets, have some sense of local market rates for wages, and in general can manage their affairs better than the state can.
This is another form of unfunded mandates and part of the reason why we have some of the highest property taxes in the nation.
The lost revenue point is a sham argument, because it’s lost money for the taxpayers when they overpay workers.
Prevailing wage is a government set wage with the government state laws deciding the rules for setting that wage.
Sort of like Wage Fixing instead of Price Fixing.
People could argue for weeks about all the points they listed above.
Union labor should be able to stand on its own feet without prevailing wage.
When Wal-Mart constructs or remodels retail stores in the Chicago area, they are not subject to prevailing wage, yet use union labor.
Not sure how much of that has to do with the threat of strike has Illinois has union friendly strike rules.
In the St. Louis area, most residential homes are built with union labor, in the Chicago area that is not the case.
The union can sell the benefits of its training centers, trained workforce, the productivity of its workforce, and the quality of their output.
Rich Miller is very pro union and so are most of his loyal blog followers.
Not surprising as his blog is targeted to state politics and Illinois has the most heavily unionized state workforce in the United States, and its been said he began his career working for Michael Madigan.
The University of Illinois in Champaign has a very heavily unionized workforce, there are a lot of union locals, to a lesser extent also UIC and the Springfield campus.
The full time professors at University of Illinois Champaign are one of the few employee groups at the campus that are not unionized.
The laws in Illinois have been changed over the years to heavily favor union labor in exchange for campaign contributions, votes, and electioneering assistance.
The construction trades are very heavily unionized and networked in Illinois.
Every trade has its own union local with state and national affiliates.
The trades under the AFL-CIO umbrella are then connected with regional building and construction trade councils (BCTC).
In McHenry County it’s the McHenry County Building and Construction Trades Council, AFL-CIO, located at 765 Munshaw Lane, Crystal Lake.
http://www.mchenrycountybuildingtrades.com
The AFL-CIO also has Central Labor Councils (CLC).
The CLC for McHenry County is the Northeastern Illinois Federation of Labor whose office is in Gurnee, and there are other CLCs in the area: Elgin Trade Council, Rockford United Labor, and the very powerful Chicago Federation of Labor.
http://www.chicagolabor.org
There are statewide AFL-CIO offices in Burr Ridge and Springfield.
There are 19 AFL-CIO Committee on Political Education (COPE) Districts in Illinois.
Here are some of the AFL-CIO union locals networked with just the Northeastern Illinois Federation of Labor (CLC’s are not limited to building and construction):
AFSCME #785
APWU #97
ATU #900
Brick & Stone Masons #20
CWA #4202
IAFF #3271
IAFF #473
IBEW #15
IBEW #150
IBEW #336
Ironworkers #1
IATSE #110
Laborers #152
Lake County Federation of Teachers (LCFT) # 504
NALC #409
Newspaper Guild #71
OP&CMIA #362
OPEIU #277
Pipefitters #597
SEIU #1
SEIU #73
SEIU #109
UBJC #250
UFCW #881
UFCW #1540
UFCW #60c.
Then there are associations such as the Construction Industry Service Corporation (CISCO).
CISCO describes themselves as a non-profit labor management association founded in 1988 to bring union construction labor and management representatives together. Represents over 8,000 union contractors and 140,000 workers in Cook, DuPage, Lake, Kane, Kendall and McHenry Counties.
Some of the AFL-CIO locals with offices in McHenry County or covering McHenry County are:
Carpenters Local 2087 (United Brotherhood of Carpenters & Joiners of America aka UBC), 769 Heartland Drive, Unit D, Sugar Grove
http://www.ubclocal2087.com
IBEW Local 117, 765 Munshaw Lane, Crystal Lake
http://www.ibew117.com
Also the labor unions have health, welfare, and pension funds, and hiked prevailing wages results in hiked revenue available for those funds.
Laborers Local 1035 (LiUNA), 110 N State St, Marengo.
Plasterers & Cement Masons Local 11, (Operative Plasterers’ and Cement Masons’ International Association aka OPCMIA), 1102 Rail Drive, Woodstock.
http://www.opcmialocal11.com
Plumbers & Pipefitters Local 93, (United Association of Plumbers & Pipefitters aka UA), 31855 North U.S. Highway 12, Volo.
http://www.plumberslu93.org
There are plenty of additional trade unions.
Construction unions can offer a great product that can be cost effective but they should play by the same rules as everyone else.
Maybe there’s a place for prevailing wage but it shouldn’t be so widespread as it is today.
The unions were largely able to conspire with legislators and Governors to set union friendly laws.
There needs to be a counter.
Jack Roeser formerly of Champion News and Family Taxpayers, talked numerous times how the cost to do a roofing job on a public school building was ridiculously high.
If mosts taxing districts don’t have a watchdog, do you think anyone is checking to be sure if the construction costs are reasonably priced?
Working in the private sector for a Fortune 100 company I have learned that figures can lie and liars can figure.
When requested to do any kind of study or analysis I always inquire as to WHAT the requestor would like the study to show.
Just like Lakewood wanted the TIF study to justify the development of a certain part of the County and the President of MCC wanted her study to show that the Community College needed more land / buildings, I can do a study relative to the impact of a Prevailing wage or a Project Labor Agreement (as required now for most federal projects) and put a positive spin or a negative spin on the report.
What I cannot distort is the following:
You can go to this link to obtain what ‘they’ post as the typical wage in McHenry County for working in the field of “Construction and Extraction”:
http://livingwage.mit.edu/counties/17111
The published number is $26.24 per hour.
From the description of what is contained on the site let’s say for arguments sake that the data is from 2013. .
Now, let’s just look at the hourly cost of the PREVAILING WAGE for a Laborer In McHenry County and the history:
YEAR BASE HEALTH PENSION TRNING TOTAL 40 Hours
WELFARE
2015 38.00 13.42 10.48 0.50 62.40 $2,496
2014 37.00 12.97 9.93 0.50 60.40 $2,416
2013 36.20 12.52 9.28 0.50 58.50 $2,340
2012 35.20 11.97 9.03 0.45 56.65 $2,266
2011 35.20 9.37 8.13 0.40 53.10 $2,124
2010 35.20 9.37 8.13 0.40 53.10 $2,124
2009 34.75 8.87 6.13 0.27 50.02 $2,001
2008 33.15 8.05 5.60 0.22 47.02 $1,881
2007 31.55 7.20 5.10 0.17 44.02 $1,761
2006 30.15 6.60 4.20 0.17 41.12 $1,645
Increase in total since 2006 $851
Increase in percent since 2006 51.75%
http://www.illinois.gov/idol/Laws-Rules/CONMED/Pages/Rates.aspx
You may find it interesting that during this time the sale price of our homes dropped 32 %.
Our average ‘take home’ pay has dropped at least ten percent.
The price of groceries have risen so high that the meat sections in the grocery store have shrunk in size because we cannot afford to buy it, not because we have all become vegans or all now eat out!
Stores have closed.
Our population is shrinking in this state with the exception of the illegal alien population which continues to increase.
Now, some PROFESSORS attempt to tell me that Prevailing Wage does not negatively impact me?
The Prevailing Wage law is written so ONLY union controlled businesses can meet the requirements. Those requirements include ongoing training.
What training does a laborer require that on-the-job-training cannot provide?
Is the above study attempting to prove that we need to pay union scale salaries for safety reasons? Do the taxpayers not already fund OSHA?
Prevailing wage serves one purpose: Eliminate the non-union, market based competition! Without competition unions can continue to collect exorbitant dues to fund the campaigns to elect the people in Springfield who pass the laws on behalf of the unions! Anyone wonder why union membership is dropping off in the private sector?
http://www.bls.gov/news.release/union2.nr0.htm
Want to see what Unions and irresponsible management which bows to union pressure can do?
Go to Detroit!
Did you ever think the Japanese would save what is left of the auto industry in the U.S. by opening NON-UNION assembly plants in the U.S.?
Is the Training Component of Prevailing Wage what is the justification for the County spending a million tax dollars to purchase a building for Workforce Training?
I thought this was the job of Community Colleges.
I do not see any reference to this study in the one performed by U of I.:
http://www.abc.org/EducationTraining/AcademyPages/tabid/340/entryid/417/-Study-Finds-West-Virginia-State-Prevailing-Wage-Law-Inflates-Construction-Wages-and-Eliminates-as-many-as-1-500-Construction-Jobs.aspx
Politicians bought and paid for by unions have not stopped with the Prevailing Wage Laws in States, we now have PLAs (Project Labor Agreements) required for federal construction jobs.
I wonder what long range impact this will have on the McHenry County Housing Commission? Habitat for Humanity?
Here is an actual study of PLA impact:
http://www.faircontracting.org/wp-content/uploads/2014/05/The-Effect-of-Project-Labor-Agreements-on-the-Cost-of-School-Construction-in-MA.pdf
The workplace safety issue is nonsense.
Legislated safety regulations apply to all workers, union or non-union.
A shame that they focussed only only the construction industry, which is, in the Midwest, is fairly unionized.
A shame they didn’t didn’t address the costs of employing prevailing wage lawnmower operators.
I FOIAed the supporting data the State used to determined Mchenry County’s prevailing wage rates for the last three years, and the State could only provide 3 examples, the most noteworthy one being the crew that does the lawn mowing and landscaping at Crystal Lake’s Main Beach.
The lowest paid employee(not contractor), of the Spring Grove landscaping firm’s crew earned $58/hour BEFORE BENEFITS.
It’s a five man crew, and they are Teamsters, if you are curious.
If you are doubting the data, I am quoting from the scanned W-2s sent to the state.
The other two examples provided to me from the state are equally offensive; businesses that do no work with the private sector, and are unionized.
“Prevailing wage” = we will talk to a tiny cross section of businesses who can only do business with public entities because of their astronomically high labor rates(what percentage of the private sector can afford to pay for a 5 man crew at $58/hour/person?), then we will develop a labor rate table that excludes every labor source except those that we surveyed, whose labor rates are too high to be competitive in the private sector.
Ourobouros, or autofellatio?
Was lol John, until I came to your fourth paragraph.
Now I am steamed!
I work for a union construction contractor.
The union is an anchor around the necks of the owners.
We constantly compete with non union companies for the same work.
The margins on some of these projects are 1%.
The non union companies, many of them, do not comply with PW laws.
For that reason I don’t think costs would be lowered on bigger projects.
I would like to see what some states do, exempt jobs under a certain dollar amount from PW.
This will reduce the costs on maintenance work and smaller jobs.
One word of caution, prevailing wage was used to protect jobs in each area for the workers there.
In this day of government job websites it would be easy for companies to come here from states with lower wages and cost of living and do the work for less, taking jobs away from Illinois residents.
If my taxes are being used to pay for the job I would like it to employ local people union or not
Let’s continue the race to the bottom.
That is why by 2016 the top 1% of the world will have assets equal to the bottom 99%.
Unions didn’t cause the pension problems, politicians who did not pay the tax dollars appropriated for pensions did cause this mess.
A company will cut down to the bare minimum.
We need better contracts too.
Gerstad Builders and others in McHenry have sidewalks that are pitted and water down when they were poured.
Why aren’t contracts written to make these contractors responsible for their work for a certain period of time.
We need to get the corruption out not fight amongst ourselves.
Before Reagan when unions were more plentiful the middle class was doing great.
Now we are not making it.
Wages haven’t gone up for most people but rents, food, housing have.
But, Karma! The guy in the White House is saving the Middle Class!!
If wages have not gone up, why has the prevailing wage package gone up 52 PERCENT since 2006 as posted above?
I’m uninformed on this topic.
What is prevailing wage?
Does that mean union scale?
No jokes, please.
Prevailing wage laws as much as some might disagree PROTECT THE TAXPAYERS.
Now one makes the argument that it is Union wages driving up the cost and that is false claim.
Let’s take the recent work performed in Crystal Lake with PEDCOR.
90% of the job was performed from contractors outside Illinois.
Most came from Indiana and a couple from Ohio and one from Wisconsin.
Now local contractors could bid against them Union or Non Union fairly under PWL.
PEDCOR did not take any bids but had to do it under the PWL because it received YOUR TAX DOLLARS.
Explain how local contractors would compete with those contractors who pay the workers less from the states they come from with your Tax Dollars.
PWL protects Tax Payers by making all pay wages equally ensuring that local companies can compete with out of state contractors.
The training money aspect of the law is also to protect Tax Payers trying to ensure the people who work on Tax Payer funded projects are actually trained to do the job.
If company X doesn’t train the people who work for them that means they hire from want adds and who knows what kind of worker you’ll get.
When you hire a lawyer are you looking for cheapest or best ?
When you go to a Doctors office are looking for Cheapest or Best ?
You may have a complaint by the comparision but think about it, You can die if Electric is wired incorrectly, You could die if Gas Pipe is vented correctly… ECT.
Remember you get what you pay for and Cheap isn’t better Quality is !!!!!
It means exactly what the words imply. (prevailing = generally current. I think you know what wage means.)
CU it is equivalent to the union wage for each job description. Laborers currently $38 plus $24 benefits per hr and that’s no where near the top
CU There: Click on this link: http://www.illinois.gov/idol/Laws-Rules/CONMED/Pages/Rates.aspx
Karma/anonymous coward- why on earth would you believe that nonsensical Oxfam “analysis” of wealth disparity?
Here we are, in 2015, and Oxfam says the world’s richest 1% “controls” 50% of the the “wealth” in the world- and through some magical Bilderberg-Illuminati conspiracy, will have 99% of the “wealth” by next year.
Critical thinking skills are in short supply- that’s for sure.
Oxfam’s “analysis” is based on- well it isn’t based on anything.
The Forbes list they use ranks the richest peo
…ranks the richest people in the world, based on public data.
Their “richest” people, are, almost exclusively, significant shareholders of large amounts of publicly trade stock.
Stock is only worth what someone might pay for it, which means a trade- and if the founders of Google and descendants of Sam Walton dump all their shares, they’ve simply traded their stock “wealth” for cash “wealth”.
And dumping their shares would cause a drop in the value of their stock- so they’d end up with less “wealth” than they started with.
If unions were at 50% in the 1950’s and are only at 11% now how can we blame everything on the unions?
The truth is every tax break is for the upper class and jobs have gone overseas to the cheapest wage.
I am against the new trade agreement.
How can US workers compete against South Korea where their wages are 56 cents an hour?
Also our rents, food, utilities don’t account for the fact that 50% of the people make $20 or less.
Also public unions are different from private unions.
Most construction people don’t work the entire year, they have layoffs while teachers, police and fire work year round for good wages.
Busineeses have been cheating the laborer for years.
That is why in the 1970’s you could get an office job after high school for $7.00 per hour in Chicago and now so many years later you can start out at about the same rate if you are lucky enough to find a job.
On t cnbc today they said there are 600,000 manufacturing jobs open in US and they are high tech jobs paying more than the average job but teachers etc always push 4 year colleges.
We should honor all workers.
Also if America honors work ethic why do we tax workers at 34% but people who inherit their money or do stocks at 17% or lower?
John Lovaas take whatever study you like or just look at the people in this country.
I am not saying there are people who are doing good who are not part of the 1% but when the companies pollute, cheat on paying their taxes etc, they are not paying their share and we have to pay it.
If McHenry County is so republican and saving money and low taxes why do we pay some of the highest property taxes in the US?
Is it because they only want power like in the townships which I hope Rauner and Jack Franks get rid of.
These are families who work generationally in local governments, cry about government but have their hands out for all the benefits.
Maybe you should look at them.
White people take more welfare than minorities.
There are help wanted signs and people don’t apply except for the minorities.
People caused their own problems because they are so jealous of others and only are small minded and care about themselves that they can’t see how they enable the rich to get richer.
I’m tired of paying everyones taxes
Where are you getting the figures of white people take more welfare?
Well poor people pay taxes too.
They pay sales tax, gas tax, etc.
Are you voter tired of paying more taxes than people who make their money from inheritances or on stock options?
Why should you pay a higher percentage of tax than Buffet, Gates, Romney, Bush, Clinton etc?
It is because stupid people think they will get rich one day. Good luck with that.
The latest statistics on welfare benefits show whites and blacks receive about the same amount of welfare.
http://www.statisticbrain.com/welfare-statistics/
Who do you think pay for all the unwed mothers and there are enough of them in McHenry County although the southern states really receive the most welfare.
Also on wttw yesterday they said in blighted neighborhoods in Chicago 50% of black males are unemployed.
Where is anyone, government or businesses showing concern.
Republicans wanted cheap labor for years and brought in illegals and now that they have lived here 20-30 years they don’t want them to be citizens who would have to pay taxes.
They choose a lot of times to pay them under the table and that lowers wages also.
Repubs say they are family value but they started all this salaried positions where people don’t get paid for overtime even if they are a manger at McDonalds making $26,000 per year but are denied overtime and have to work 50 or more hours per week.
Family values but they don’t want the illegals working here for years, being employed by these businesses to be reunited with their children.
Family value except when it comes to bombing poor children in a war that they said Iraq was responsible for 9/11 but it was really Saudis that were responsible.
Family value but they speed and almost knock pedestrians down daily.
I see people with Jesus stickers or I love the military who act like morons everyday.
We are 99 1/2% alike with all other people of all races so why do we always separate and hate each other, for politicians to win power over us.
Get smart.
I agree with Karma, very good points and true
The Illinois kegislature (they act like they have had a few) passed a business agent privlege to allow them to conceal criminal acts.
That’s even worse than the prevailing wage.
PWA is used as a union tool to harass honest business men.
That’s why local 150 IUOE formed the IIIFFC.
Former cops to harass non-union companies doing state or municipal work.
The locals are the few with knowledge of prevailing wage.
Because of that the data is tainted with primarily union wages it’s not a prevailing wage its a union wage.
If U of I is right why a union run compliance office?
Why do you think the unions pad the rates?
Why should we pay to have a law if it does not change things?
The reality is its a wage fixing statute that costs all taxpayers money!