West Virginia’s Prevailing Wage: Good for Business, Good for Workers

Construction workers hired for public projects in West Virginia must be paid a minimum “prevailing” wage and benefits level. This prevailing wage level must equal the market wage rates as determined by the West Virginia Division of Labor, and varies by geographical area within the state and by occupation. West Virginia’s prevailing wage law was first enacted in 1933, two years after the federal Davis-Bacon Act, which established a prevailing wage for federal construction projects. Read PDF of report.

Thirty-two states, including West Virginia, have prevailing wage laws for state-funded construction projects, while there is also a federal prevailing wage law for federally funded construction projects. These prevailing wage laws help ensure that government-funded construction projects are done with highly skilled workers from the community, increasing productivity and strengthening the economy with good-paying local jobs.

Recently, lawmakers indicated that they intend to weaken or fully repeal West Virginia’s prevailing wage law this legislative session. This issue brief examines the impact of prevailing wage laws on public construction costs and addresses claims made about the West Virginia law by its opponents. It also considers the impact of prevailing wage laws on other aspects of the construction industry beyond costs, such as training, safety, health and pension benefits, and impacts on the economy as a whole.

Key Findings:

• Multiple academic studies have shown that prevailing wage laws do not raise public construction costs; instead the impact of higher wages on costs is compensated by the positive effect on productivity.
• West Virginia’s school construction costs are lower than its surrounding states, including Virginia, which does not have a prevailing wage law and Ohio, which exempts school construction from its prevailing wage law.
• Claims by opponents about the costs of West Virginia’s prevailing wage law are implausible and based on hypothetical assumptions, ignoring actual experience, evidence and data.
• Construction workers in West Virginia work an average of 1,760 hours per year. Using wage rates from the Occupational and Employment Statistics data rather than the current prevailing wage rates would result in poverty-level incomes for many construction occupations.
• The repeal of prevailing wage laws leads to less workforce training, less experience in the workforce, higher injury rates, lower health and pension coverage, and lower wages.