Inflation Is Affecting Us All. Here’s How Prevailing Wage Can Soften The Sting.

Prices everywhere are increasing.

We see it in grocery stores, at the gas pumps and even on our utility bills. A few cents here and a couple percentage points there can add up quickly.

In June and July of 2022, prices were up 8.3 percent compared to a year ago, which is the highest rate of increase in 40 years, according to NBC News.

Whether it’s a gallon of gas or milk, inflation is causing our hard-earned dollars to be worth less than they once were.

Inflation Is Deflating The Construction Industry Nationwide

The construction industry in particular is feeling the effects of inflation; it has been one of the hardest hit sectors in our economy. The industry is facing unprecedented inflation that is driven by the increasing costs of materials, supply chain disruptions and a lack of skilled laborers.

According to actual surveys of construction contractors conducted by the Illinois Economic Policy Institute (ILEPI), the skilled labor shortage is much less severe in the union segment of the industry.

• Union contractors are 21 percent less likely to experience delays in project completion times due to shortages of workers compared to nonunion contractors.

• Union contractors are 14 percent less likely to experience difficulty in filling craft worker positions.

• Union contractors have been 8 percent more likely to add workers over the past year, indicating a stronger ability to staff up and recruit new workers even in a tight labor market.

• Meanwhile, supply-chain issues have affected the entire industry, with materials shortages and delivery delays affecting both union and nonunion contractors at statistically equal rates.

• Pre-pandemic survey results provide clues on the labor market competitiveness of union and nonunion contractors.

• Nonunion firms’ greater difficulty in filling craft worker positions has been a persistent problem that preceded the COVID-19 pandemic.

• Nonunion contractors were 27 percent more likely to report that their local pipeline for supplying well-trained craft workers was “poor” compared to their union peers.

• Union contractors were 13 percent less likely to be losing their workers to other industries.

• Union contractors were more diverse—as examples, they were 10 percent more likely to employ Black and African American workers and 8 percent more likely to employ military veterans. Research has shown that, because they invest in job quality and apprenticeship programs, union contractors are better able to attract, develop, and retain skilled construction workers.

That is why the federal infrastructure bill invests in highly-skilled, high-quality construction by requiring a federal prevailing wage rate on projects funded by this historic legislation.

West Virginia has an opportunity to head off some of these concerns, though. We still need better roads, safe bridges and infrastructure to support communities – and a prevailing wage law can help us accomplish that.

Prevailing wage is the minimum hourly wage employers must pay local workers for government-funded infrastructure projects. Prevailing wage law ensures that local workers are paid fairly – based on a regional survey of rates for their particular level of skill and experience.

Prevailing Wage Can Help Curb Inflation Rates

By paying local construction workers a fair wage, it is more likely that the industry will attract more young people and develop a skilled labor force who can contribute to the Mountain State’s economy.

West Virginia Needs Prevailing Wage.

Prevailing wage can mitigate construction projects that are unfinished, delayed or over budget simply by increasing the workforce available to carry out such projects.

Frequently Asked Questions

The need is palpable. According to a report by Associated Builders and Contractors, an industry trade group, there are about 400,000 unfilled construction positions nationwide – a number that has doubled since before the pandemic.

Filling those open construction positions through prevailing wage will help projects move along and ultimately contribute to lowering the inflation rate.

Decreased Inflation Is Just One Benefit Of Prevailing Wage

There are a number of other benefits West Virginia can enjoy from prevailing wage that 28 other states have for years – like delivering both job quality and strong contractor competition.

“Prevailing wages not only produce higher wages and better benefits for workers, but they dramatically increase participation in apprenticeship programs that function as labor supply pipelines. Equally important and contrary to long-standing conservative rhetoric, research has concluded that these laws do not increase total project costs, because they attract higher levels of skill and productivity to the job site, result in fewer safety and performance problems, and improve workforce retention,” according to The American Prospect, a nonprofit focused on public policy.

Prevailing wage creates a number of benefits to taxpayers in various areas, many of which can create a ripple effect of positive changes – for all. Studies have shown that prevailing wage can help close racial pay gaps.

“One statistical analysis found that the income gap between white and Black construction workers would be roughly 7 percentage points smaller if a state without a prevailing wage law instituted such a law … Finally, prevailing wage can also help ensure that government spending does not erode standards in the service sector, where many jobs are held by Black, Latinx, and immigrant workers,” according to The Center for American Progress, an independent nonpartisan policy institute.

A Better Future For West Virginia

Prevailing wage can help with current inflation issues and as well as move West Virginia in the right direction – for roads, for hospitals, for jobs, for opportunity and for integrity.

The effects will benefit communities and position the state to prosper by increasing the workforce, decreasing inflation, improving infrastructure and leading to better quality of life.

These improvements add up to create a better future for West Virginians both in the public and private sectors. It is time for West Virginia to thrive. It is time for prevailing wage.

Learn more about prevailing wage law and how it can improve jobs, hospitals, roads, opportunity and integrity here: restorewv.com/news/