Prevailing wage, workers' comp said to raise costs, hurt minorities
Illinois' prevailing wage and workers’ compensation laws lead to drastically increased costs for public works projects and competitive disadvantages for minority workers, according to Michael Lucci, vice president of policy for the Illinois Policy Institute.
Lucci explains that prevailing wage, which sets a minimum wage requirement for workers on projects over a certain cost threshold, puts Illinois public works laborers’ wages well above national averages. The state mandates that laborers on public projects make $38 per hour – 40 percent above the Cook County average of $26.90. Additionally, Lucci writes, each laborer garners $13.78 per hour for health and wellness and $10.12 per hour for pensions, generating a total cost of $61.90 per hour.
While union workers support prevailing wage laws on the grounds that higher wages promote more productive work, Lucci says the free market would accomplish the same thing. He also points to research from Stanford economists suggesting that prevailing wage laws negatively affect the prospects of black construction workers, since minority workers are less likely to belong to trade unions, and minority contractors are more likely to pay lower wages.
Lucci also highlights the high costs of workers’ compensation in Illinois, which he attributes to special interests like trial lawyers and medical providers who benefit from higher settlements and payments.