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What is Prevailing Wage?

Prevailing wage policies provide the best value for California taxpayers on public works projects. They strengthen the economy and the middle class with good paying local jobs, while helping to ensure that projects are completed on time, on budget, and with the highest quality of workmanship.

Prevailing wage is the standard pay rate based on a survey of all employers in a region - for a construction worker in a given trade in a given geographic area. Often, these workers have completed years of training in an apprenticeship program that ensures that they know how to get the job done - on time and on budget.

These laws were enacted in the 1930s during a time when government-funded construction projects had become a race to the bottom. Contractors would bring in low-wage, low-skilled workers from outside the community to do local public works jobs, and then leave when the project was completed - taking local tax dollars with them.

Prevailing wage laws changed all this, creating more California jobs, more ladders into the middle class for California families, and top quality highways, bridges, water systems and municipal facilities for California taxpayers. But in today's tough economy, prevailing wage laws are more important than ever.

Studies have shown that for every dollar spent on a prevailing wage project $1.50 in economic activity is generated locally. This supports local small businesses and builds thriving communities. 

Studies have also shown that without prevailing wage, not only does the local economy suffer, but so do local taxpayers. Millions of local tax dollars are shipped out of town—or worse, out of state. Risks of contractor non-performance and degraded quality  increase. And depressed wages mean more full-time workers on public assistance—effectively a tax increase on everyone else.


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