Prevailing wage regulations and school construction costs: evidence from British Columbia

The stock of public school buildings constructed during the baby boom is aging along with that generation of Americans. Soon much of this building stock will have to be replaced.(FN1) The financing of this rebuilding of America's schools is an emergent political issue of considerable importance. Given these pressures on school construction financing, any proposal that promises to substantially lower the price tag for this reconstruction garners considerable public interest and potential support. One such proposal is the elimination of prevailing wage regulations that in 31 states and the District of Columbia govern the payment of wage rates on public school construction.(FN2) Prevailing wage laws require that state mandated wage rates be paid on public road and building construction. The purpose of these laws is to encourage collective bargaining in construction and to discourage the payment on public works of wages below those prevailing locally. Critics of prevailing wage laws assert that these laws raise public construction costs and discourage non-union contractors from bidding on public works.