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 Illinois’ economy has lagged behind
the rest of the nation for 50 years, according to data from the Bureau of
Economic Analysis. This year alone, nearly 100,000 people have dropped out of
the workforce. Legions of Illinoisans have fled the state in search of better
job opportunities.
One reason jobs are scarce is that bad state policies make it too expensive to
do business here. Data from the Bureau of Labor Statistics, or BLS, indicate
construction jobs in Illinois were slow to recover from the Great Recession.
Construction employment in Illinois is down nearly 30 percent over the last
decade, one of the nation’s worst recoveries in that sector.
But repealing an outdated state law could provide hope for workers unable to
find a construction job, as well as overburdened taxpayers, according to new
research from the Illinois Policy Institute.
 Illinois’ Prevailing Wage Act is a law that sets inflated wages that employers
have to pay workers on public construction jobs.
While prevailing wages differ from county to county, the average prevailing wage
in Illinois is 40 percent higher than the average wage for private construction
jobs in the same area.
For example, the average carpenter in Cook County makes a wage of $31.04 per
hour, according to BLS data. But Illinois’ prevailing wage law mandates a wage
of $43.35 per hour for carpenters in Cook County on public construction
projects.
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These higher wages are a
windfall for some lucky workers. But this policy benefits the few at
the expense of the many – artificially inflated labor costs lead to
job rationing and higher unemployment.
In states that repealed their prevailing wage, construction sector
employment grew by almost 8 percent. Based on 2015 data, a repeal
could mean 14,000 new construction jobs for Illinoisans over the
next 10 years.
In addition to jobs growth, taxpayers would also save money if
lawmakers repealed the state’s prevailing wage law. Even the leading
economists in support of the prevailing wage concede that repealing
the prevailing wage yields cost savings for construction projects.
This is because labor costs make up 20 to 30 percent of construction
costs.
These estimates suggest that a repeal of the prevailing wage could
save taxpayers an average of 10 percent on public construction
projects across Illinois. This means millions of dollars in savings
for taxpayers struggling under one of the nation’s highest tax
burdens.
Lawmakers have the opportunity this coming year to set Illinois on a
better path forward.
For too long, Illinoisans have suffered under a high tax burden
while at the same time struggling to find jobs – especially
blue-collar jobs. Repealing the prevailing wage can play a major
part in changing both of those realities.
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