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Assessing the Impact of Prevailing Wage Benefits on Workers, Contractors, and the New York City Economy

Extant literature on prevailing wage (PW) laws notes that such laws generate societal benefits in the form of upward pressure on wages and benefits for non-union workers, as well as protection of local construction industries (workers, workers’ families, and employers alike) from the wage and benefit erosion that could happen if external competition entered the local market from lower-wage geographies and persistently undercut local firms. This research report illustrates how, beyond these and related benefits, PW laws might make union construction labor more cost effective than non-union construction labor for PW jobs. Such an outcome could have significant upsides. Among other things, supporting union firms: increases those firms’ ability to take on, train, and pay new apprentices, thereby paving the way for a future experienced, high-quality workforce; gives those firms more capacity to hire additional qualified workers at journey and provisional levels, thereby putting upward pressure on union density in the industry; and, arguably, puts pressure on non-union firms to raise wages and benefits to levels that are more competitive with their union counterparts. In other words, insofar as PW laws contribute to stronger unions and better compensated workers, they are “high road” policies that can lead to greater shared prosperity in local economies over time. 

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