Agenda - Council Work Session - 07/28/2026

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GET THE FACTS: PREVAILING WAGE Research overwhelmingly shows that prevailing wage requirements have little to no impact on project costs 4 Three in four peer -reviewed studies conducted between 2000-2018 found that prevailing wage laws have no effect on the cost of public con- struction projects.28 A 2018 analysis by the Midwest Economic Policy Institute of 640 contractor bids on school construction projects in Minnesota found that winning bids based on the payment of prevailing wages are no more costly than bids that do not require prevailing wages.29 4 Prevailing wage laws increase apprenticeship training, boost worker productivity, and reduce injury rates - helping to address the skilled labor shortage in construction.30This may help explain why the cost of prevailing wage construction is comparable to non -prevailing wage construction: increased reliance on highly trained workers leads to fewer costly mistakes and greater efficiencies. Prevailing wage policies support the development of a skilled construction workforce and provide path- ways into the middle class and boost job opportuni- ties for local workers 4 Economic research finds that prevailing wage laws foster middle class careers that attract tal- ented young workers to the construction trades.31 4 Minnesota's prevailing wage law increases blue-collar construction worker incomes by 5.2 percent, expands health insurance coverage by 5.0 percentage points and increases the share of construction workers with pension plans by 5.3 percentage points.32 28 Frank Manzo and Kevin Duncan. "An Examination of Minnesota's Prevailing Wage Law Effects on Costs, Training, and Economic Development," Midwest Economic Policy Institute, July 2018, https://midwestepi.files.wordpress.com/2oi8/o7/me- pi-csu-examination-of-minnesotas-prevailing-wage-law-final.pdf, 29 Ibid. 3o Ibid. 31 Ibid. 32 Ibid. 4 Minnesota's prevailing wage law reduces the share of construction workers who receive food stamp assistance by 2.1 percentage points.33 4 Compared to Indiana, which recently repealed its prevailing wage law, per -worker productivity has grown 7.7 percentage -points faster and worker turnover rates have fallen further in Minnesota.34 Prevailing wage policies ensure work opportunities for local workers and contractors 4 Prevailing wage laws set the wage and benefit floor based on local survey data of the going rate for particular crafts. This ensures that work on government financed projects do not undercut area standards. It levels the playing field for local workers and local contractors. 4 For example, "when school districts in the Twin Cities area include prevailing wages on projects, local contractors account for a 10 percent higher market share- with tax dollars staying in the local economy."35 Prevailing wage policies boost the positive impacts of infrastructure investments 4 "By protecting work for in -state contractors and their employees, Minnesota's prevailing wage law creates 7,200 jobs in Minnesota, improves the state economy by $981 million, and generates $37 million in state and local tax revenue everyyear."36 4 By leveling the playing field for local contractors, prevailing wage policies increase opportunities for local workers. Local workers spend 3-4times more in a local economy creating positive so- cio-economic ripple effects throughout regional economies.J7 33 Ibid. 34 Ibid. 35 Ibid. 36 Ibid. 37 Katie Hatt and Lucas Franco, "Catching the Wind: The impact of local vs. non -local hiring practices on construction of Minnesota wind farms," North StarPolicy Institute, June 2018, https://north- starpolicy. org/catching-the-wind-the-impac t-of-local-vs-non-lo- cal-hiring-prac tice s-on-construe tion-of-minnesota-wind-farms. 8 North Star Policy Action