Unintended Consequences of Nevada’s Ninety-Percent Prevailing Wage Rule

Document Type

Article

Publication Date

1-20-2020

Publication Title

Labor Studies Journal

First page number:

1

Last page number:

20

Abstract

In 2015, the State of Nevada reduced prevailing wage rates on education-related construction to 90 percent of the applicable rate for other state-funded construction. The examination of projects built for Clark County School District between 2009 and 2108 indicates that Nevada’s wage policy has no statistically significant effect on school construction costs or bid competition, taking into consideration bids placed before and after the 2015 policy change. However, prevailing wage reductions on education projects motivated union contractors to pursue other opportunities as Nevada’s building industry expanded after 2015. Reduced participation in district bidding by union contractors contributed to a 25-percent overall decrease in bid competition and a 20-percent increase in bid costs following the 2015 policy change. While the goal of the 90-percent prevailing wage rule was to reduce the cost of building public schools, unforeseen consequences contributed to decreased bid competition and increased construction costs.

Keywords

Prevailing wage laws; Unions; Construction costs; Bid competition; Public policy

Disciplines

Income Distribution | Public Economics | Public Policy

Language

English

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