Health care and pension benefits for construction workers: The role of prevailing wage laws

This article examines the affect of state prevailing wage laws (PWLs) on th e amount and mix of wages and benefits paid to construction workers. PWLs r equire contractors who win bids on state-financed construction projects to Day compensation rates equivalent to those prevailing in local construction markets. During 1982-1992, 6 states repealed their PWLs, 9 states who neve r had a PWL did not enact one, and 32 states kept their PWLs. Data from the Form 5500 series, the Census of Construction Industries, the Current Emplo yment Statistics, and the Current Population Survey are combined to evaluat e the effects of PWL repeals on compensation. When comparing the experience s of different states, PWLs enhance both wages and benefits, with the large st percentage increase going toward employer pension contributions. PWLs ap pear to create an incentive for both employers to pay and workers to accept a larger percentage of their total compensation in the form of benefits.