The “High-Wage, High-Skill” Rationale

A second argument focuses on the difficulties of training a highly skilled construction work force. Construction work, the advocates of prevailing wage laws contend, tends to be transient: Jobs in the field are not stable, and construction workers are likely to move between several employers as they undertake and complete various projects. As a consequence, employers are unlikely to provide training, as employers cannot be certain they will capture any of the benefits from the new skills.[22] Prevailing wage advocates believe that by placing a floor beneath construction wages on government contracts, the prevailing wage law counteracts this flaw in the construction labor market. In particular, advocates of prevailing wage laws have stressed the value of union apprenticeship programs as a means of creating a highly skilled construction labor force that can command higher wages in the larger marketplace.

But markets can and will adjust to these sorts of difficulties, usually without government intervention. There is some evidence that strong prevailing wage laws are associated with greater participation in apprenticeship programs.[23] This, however, does not prove that these same workers are more productive than workers who receive other forms of training, including informal on-the-job training. For instance, participation in union apprenticeships may be associated with strong prevailing wage laws simply because there is a strong union presence that has successfully lobbied for strong prevailing wage laws. Prevailing wage critics have also argued that worker transience is mostly associated with unionized contractors, who utilize union hiring halls that dispatch workers to the contractors, while nonunion contractors are more likely to be able to maintain a stable work force, making it more practical for them to provide training themselves.[24]