State and local governments spend billions of dollars each year on goods and services that are provided by private companies. Yet, all too often, this spending undermines the labor standards of high-road companies that pay good wages and benefits, delivers jobs that pay poverty wages, and provides poor value to taxpayers. Policymakers can help ensure that government dollars uphold local market wages, support high-quality jobs, and deliver value to taxpayers by enacting prevailing wage laws, which require recipients of government funding to provide workers with wages and fringe benefits that are comparable to those paid to other similarly placed workers in the region.
While prevailing wage laws most commonly apply to construction jobs, they also frequently cover service contracts. Policymakers have applied prevailing wage requirements to most types of government funding, including direct contracts, grants, loans, and tax incentives. These laws help level the playing field for high-road employers that pay decent wages and benefits and provide good value for taxpayers and law-abiding business owners.
The above excerpt was originally published in Center for American Progress.
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