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The Effects of the Repeal of Utah's Prevailing Wage Law on the Construction Labor Market

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Master's thesis

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Government has always been a major purchaser of construction services. In 1987, federal, state and local governments jointly accounted for 20 percent of all construction purchases. As a primary customer to construction services, government holds the potential to use its bargaining power to reduce its costs by forcing down wages. As early as 1881, the AFL argued for the passage of prevailing wage laws which would prohibit government from using it market power to lower wages. Kansas passed the first state prevailing wage law in 1911 and by 1969 forty-one states and the District of Columbia had prevailing wage laws in effect. The Federal Government passed the Davis-Bacon prevailing wage law in 1932. These laws effectively took wages out of the competitive strategies of contractors preparing bids for government jobs. This paper is a case study of the effects of the repeal of Utahs prevailing wage law. We find that the Utah repeal accelerated the decline in the union share of the states construction labor market, drove down average construction wages in the state, and decreased union apprenticeship training for construction. no other public or private source has offset the decline in training. In response to the decline in union membership and training, contractors have reduced turnover to the firm in order to retain skilled workers and minimize screening and training costs. However, in response to not only the decline in construction waves but also the coincident decline in health and pension benefits, experienced construction workers are leaving their trades for careers in other industries. Thus, while construction firm turnover is on the decline, construction career turnover is on the rise. There is a looming crisis in training for construction workers in Utah.

Subject Categories:

  • Administration and Management
  • Economics and Cost Analysis
  • Sociology and Law
  • Humanities and History
  • Personnel Management and Labor Relations
  • Civil Engineering
  • Logistics, Military Facilities and Supplies

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