Impact of Prevailing Wages on the Cost Along the Different Construction Trade

Impact of Prevailing Wages on the Cost Along the Different Construction Trade In 1997, the Ohio senate passed Senate Bill 102 which established the Ohio School Facilities Commission as a separate agency to oversee the rebuilding projects of the public schools in Ohio. To lower the construction cost, the bill exempted construction contractors from paying prevailing wages on these projects. The purpose of this research was to investigate this hypothesis through the statistical analysis of 8093 bids received for the schools’ construction from the year 2000 to 2007. Union contractors who paid their workers union wages and non-union contractors who did not pay prevailing wages bid these projects. The hypothesis that prevailing wage laws (PWL) increased the construction cost was tested by comparing the bids/SF from both groups (union and non-union) along the different construction trades. The research indicates that there was statistical significant difference between the bids/SF for union contractors and the bids/SF for non-union contractors for only the following trades: electrical, equipment, existing conditions, exterior improvements, wood, plastics and composites, and furnishings. There was no statistical significant difference in trades’ bids. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Economics and Management Engineering World Academic Publishing Co.

Impact of Prevailing Wages on the Cost Along the Different Construction Trade

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Publisher
THE WORLD ACADEMIC PUBLISHING CO. LIMITED
Copyright
Copyright © 2014, THE WORLD ACADEMIC PUBLISHING CO. LIMITED
ISSN
2225-742X
eISSN
2226-7344

Abstract

In 1997, the Ohio senate passed Senate Bill 102 which established the Ohio School Facilities Commission as a separate agency to oversee the rebuilding projects of the public schools in Ohio. To lower the construction cost, the bill exempted construction contractors from paying prevailing wages on these projects. The purpose of this research was to investigate this hypothesis through the statistical analysis of 8093 bids received for the schools’ construction from the year 2000 to 2007. Union contractors who paid their workers union wages and non-union contractors who did not pay prevailing wages bid these projects. The hypothesis that prevailing wage laws (PWL) increased the construction cost was tested by comparing the bids/SF from both groups (union and non-union) along the different construction trades. The research indicates that there was statistical significant difference between the bids/SF for union contractors and the bids/SF for non-union contractors for only the following trades: electrical, equipment, existing conditions, exterior improvements, wood, plastics and composites, and furnishings. There was no statistical significant difference in trades’ bids.

Journal

International Journal of Economics and Management EngineeringWorld Academic Publishing Co.

Published: Dec 23, 2013

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