Prevailing wage is the hourly wage, overtime and certain benefits paid to workers on public projects. The federal government and the Ohio Department of Commerce set prevailing wage standards to avoid situations where non-union employers or contractors could offer the lowest bid on a project by undercutting employee compensation, thus compromising or neglecting safe working conditions. This also prevents contractors from areas with lower wages from coming into a community, underbidding the project and hurting the local construction industry. With wages taken out of the bidding process, the playing field is leveled and contractors can be evaluated on the quality, efficiency and safety of their work.
Prevailing wage is good for the economy. It keeps wages at a livable middle-class rate, results in less employee turnover, higher productivity and fewer safety issues. States such as Michigan and Indiana which have repealed prevailing wage have seen plummeting construction salaries and productivity. Prevailing wage does not result in increased project costs. A 2017 study conducted by Bowling Green State University found that, “Seventy-six percent of peer-reviewed research conducted since 2000 fails to find evidence that federal, state, and municipal prevailing wage policies increase the cost of public construction.” Why? Because labor accounts for only 23% of building costs in the United States. The study adds that weakening or repealing prevailing wage “would increase taxpayer burdens as construction worker incomes decrease and their reliance on public assistance increases.
You can read the Bowling Green study in its entirety here.
Prevailing wage rates vary by county and craft. You can find a complete listing of Ohio’s prevailing wage rates on ACT Ohio’s website.
To determine if a project qualifies for Prevailing Wage, click here for the current threshold levels.