Prevailing Wage Laws

Protecting Workers for Nearly a Century

In effect since 1931, the State of Ohio’s Prevailing Wage Law prevents building contractors from undercutting workers’ wages and benefits, which benefits the local economy.

What is Prevailing Wage?

Prevailing Wage laws require construction contractors who work on publicly funded projects to pay construction workers at least the Prevailing Wages and benefits for the area where they are completing the work. Prevailing Wages are the actual hourly wages, benefits and overtime to be paid to workers, as calculated by the U.S. Department of Labor and Ohio Department of Labor for construction trades. Most projects funded by local, county and state governments are subject to Prevailing Wage laws.

Davis-Bacon Act

Many construction projects funded by the federal government are subject to the Davis-Bacon Act.

According to the U.S. Department of Labor, the Davis-Bacon Act applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Contractors and subcontractors working on projects covered by the Davis-Bacon Act must pay their laborers and mechanics employed under the contract no less than the locally Prevailing Wages and fringe benefits for corresponding work on similar projects in the area.

The Benefits of Prevailing Wage

Extensive research has consistently shown that Prevailing Wage laws benefit all building trades workers, construction project owners and the public in general. Data regularly demonstrates that these laws do not result in significant cost variations on construction projects and, in fact, result in savings due to better investment in the workforce and the resulting higher-quality construction. They also show that in most instances, it is the cost of the building materials that drives up the price of a project – not the workforce.

Prevailing Wage laws keep cost overruns low and quality high by utilizing a workforce that is paid properly to do the job right the first time.

Furthermore, Prevailing Wage jobs benefit the local economy by ensuring local contractors and local construction crews work on projects. These workers spend their wages locally, which benefits area businesses and keeps the local economy moving.

Prevailing Wage Studies

Still unsure about the benefits of Prevailing Wage? Here are a few of the many studies that show Prevailing Wage is good for all parties involved.

The Economic Impact of Prevailing Wage Law Repeals on Construction Market Outcomes

Evidence from Repeals Between 2015 and 2018

Frank Manzo IV, MPP Robert Bruno, PhD Larissa Petrucci, PhD

Released in 2023, this Illinois Economic Policy Institute and Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign study compares construction market outcomes in states that repealed their prevailing wage laws to those that maintained their Prevailing Wage laws. It found that the states that repealed their Prevailing Wage laws created negative consequences for construction workers, businesses and communities. Construction worker wages, benefits and productivity fell behind states with Prevailing Wage laws. Additionally, those who repealed the law had more on-the-job fatalities, a higher percentage of residents who rely on government assistance programs and fewer projects completed by local contractors – all without saving taxpayers money.

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The Effects of Repealing Prevailing Wage in Wisconsin

Impacts on Ten Construction Market Outcomes

Frank Manzo IV, MPP Jill Gigstad Kevin Duncan, Ph.D. Nathaniel Goodell

This Midwest Economic Policy Institute study from 2020 revealed that the repeal of Prevailing Wage laws hurt Wisconsin. Construction worker income growth did not keep up with neighboring states, construction worker health insurance coverage declined, the construction workforce became less diverse, and more construction workers needed government assistance programs. Additionally, the Wisconsin Department of Transportation had fewer bids on projects and more projects awarded to out-of-state contractors.

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What the Research Tells Us About the Costs and Benefits of Prevailing Wage Laws in Colorado

Kevin Duncan, Ph. D.

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Released in 2024, this study examined the results of past Prevailing Wage studies. It found that 91 percent of studies revealed that Prevailing Wage laws do not increase construction costs. Duncan also found that Prevailing Wage laws benefit local contractors, employers and the local economy. They help reduce injuries, discourage underground labor practices (paying workers in cash) and increase the amount of income tax collected.

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The Impact of Montana’s Prevailing Wage Law Effects on Costs, Training, and Economic Development

Kevin Duncan, Ph. D
Matthew Hinkel, Ph. D.
Frank Manzo IV, MPP

The 2023 Midwest Economic Policy Institute study showed that Montana’s Prevailing Wage law positively impacts the state’s economy and delivers great value for taxpayers. It levels the playing field, promotes job quality, boosts investment in apprenticeship training programs, improves worksite safety and stabilizes construction costs.

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