Repeal of Idaho's Prevailing Wage Law: An Economic Evaluation

Authors

  • Steven Peterson Research Economist, Center for Business Development and Entrepreneurship, College of Business and Economics, University ofldaho, Moscow, Idaho, 83844-3178
  • Mike DiNoto Professor of Economics, University of ldaho, 83844-3178
  • Ismail H. Gene Assistant Professor of Economics & Adjunct Professor of Statistics University ofidaho,83844-3178

Keywords:

prevailing wage laws, efficiency wage theory, unions, average wages, construction

Abstract

We studied the effects of repealing Idaho's prevailing wage law, particularly on Idaho's construction trades employees, county and state economies, and state public works expenditures. We used trend and regression analyses as well as IMPLAN input-output modeling using data from a wide range of sources. We found a strong downward trend in average construction wages in Idaho for both union and nonunion jobs. Salary losses have since dramatically increased that lowered Idaho's national ranking for average earnings/construction worker. These trends implied that (1) construction wages in Idaho fell sharply since repeal of the prevailing wage law and relative to the rest of the nation, and (2) despite Idaho's rapid population and economic growth, repeal of the prevailing wage law may have exerted downward pressure on all wages in Idaho.

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Published

2003-03-31

Issue

Vol. 9 No. 1 March (2003)

Section

Independent Refereed Articles