COMMON CONSTRUCTION WAGE

RESPONSIBLE GOVERNMENT,
SMART FOR BUSINESS
Common Construction Wage
Protects Market Share and
Labor Supply

Common Construction Wage

Protects Businesses from
Corporate Tax Increases

Common construction wage is a de-facto local

preference law. It keeps out-of-state contractors
from coming in and underbidding local contractors
that contribute to their communities.
Having a ready, local, highly-skilled workforce for
projects is critical to finishing projects on time,
on budget while keeping the work site safe. Its
much more effective to have a pool of high-skilled
workers who do the job right the first time than to
pay lower wages for workers who dont have the
right skills and cant do the job at hand.
Skilled workers on common construction wage
jobs are 15% more productive than less-skilled
workers and are key to contractors business
models. This productivity enables contractors to
do high-quality work quickly and move on to the
next project, keeping them competitive.

Construction workers in common construction wage

states contribute 36% more in federal income taxes
than workers in states without the law.
In Indiana, common construction wage earners
contribute $21 million to the state and local tax base.
Better wages means a stronger and more fairly
distributed tax base, helping policy makers balance
budgets without raising taxes on businesses.

buildingstrongcommunities.org |

Common Construction Wage

Drives Economic Development
Every dollar spent on a common construction wage
project generates $1.50 in local economic activity.
Thats money spent at local businesses such as
restaurants, shopping malls, and grocery stores
spurring additional job creation that keeps local
communities and businesses strong.
Common construction wage jobs support 2,000
non-construction jobs in Indiana.
Without common construction wage, Hoosier
construction workers would see their wages
reduced by $246 million. Businesses wont locate to
communities where the population cant financially
support them.

$1.75 IBJMEDIA 2013

CENTRAL INDIANAS BUSINESS AUTHORITY

VOL. 34 NO. 15 OCTOBER 24-30, 2013

OVER 4000

HOOSIER CONTRACTORS SUPPORT COMMON CONSTRUCTION WAGE

COMMON CONSTRUCTION WAGE. GOOD FOR BUSINESS. GOOD FOR TAXPAYERS.

When we put local, experienced construction professionals
to work and pay them fairly, we get higher-quality projects, a
stronger middle class and vibrant local economies. Without
common construction wage, not only does the local economy
suffer, but so do state taxpayers when millions of state tax

dollars are shipped out of state. Risks of contractor nonperformance and degraded quality increase, and depressed
wages mean more full-time workers on public assistance a
tax increase on everyone else.

COMMON CONSTRUCTION WAGE

A COMMON SENSE APPROACH TO
PROTECTING HOOSIER CONTRACTORS
AND LOCAL JOBS WHILE PROVIDING
SAVINGS TO TAXPAYERS
Common construction wage was implemented by the
Indiana Legislature at the request of contractors to keep
jobs local. They were being undercut by out-of-state
contractors bringing in low-wage, low-skilled workers
from outside our communities.
Common construction wage protects communities from
unnecessary costs over the lifetime of a project. Allowing
out-of-state contractors to lower local standards for
construction wages attracts a lower skilled, out-ofarea workforce resulting in large productivity losses on
the construction project. These workers require more
supervision and their work often needs additional review
and repair before it can be deemed safe and secure.
This is at the expense of taxpayers.
Typical workers not paid the common construction
wage are eligible for thousands of dollars in public
assistance, which costs taxpayers for additional reliance
on cash assistance, food stamps, and health care tax
payers dont save, they subsidize.

When Indiana-based contractors like us pay fair, middle-class

wages to our workers, we can retain skilled talent and keep tax
dollars circulating in our own communities. Weakening or eliminating
the common construction wage law encourages unscrupulous
contractors, many from out of state, to enter our market and drive
down standards that we have worked many years to establish.

Douglas P. Harrison, President

Gibson-Lewis of Indianapolis, LLC

We support current common construction wage laws because of the

impact those wages have on our communities. It establishes a more
level playing field for contractors such as ourselves to bid fairly on
construction work. With established wages, the skilled trade employees
earn stronger, more consistent wages to support their families.

COMMON
CONSTRUCTION
WAGE FACTS
Why Common
Construction Wage?

What is Common
Construction Wage?
The common construction wage is the wage paid to
construction workers on Indianas publicly financed
projects that cost over $350,000.
These market rate wages are determined by a fivemember panel in each county that includes two
taxpayers as well as a representative from the business
sector, workforce, and the awarding agency.
The panel votes on the wages to be paid on the public
project based on the wages paid to construction workers
in that countys private sector.

It gives taxpayers a voice and vote on how their tax dollars

are spent to finance community projects.
Common construction wage stops big government with
big money from undercutting the wages common in local
communities, which disrupts the local economy and the
communitys standard of living.
It controls costs while producing a quality product. Labor
only makes up 23% of total building construction costs
in Indiana. Reducing wages doesnt produce any savings
without paying workers illegally below minimum wage.
However, productivity does drive the cost of construction.
Skilled workers on common construction wage jobs are
15% more productive than less-skilled workers.

Barbara Kidwell, Corporate Secretary Treasurer, Avon, IN

American Floor Covering, Inc.

Labor costs do not represent a big enough portion of total

construction costs to generate savings.
The 4,000 Hoosier contractors that support common construction wage
spend $42 million a year on training Hoosiers for middle class careers.

16%
43%

7%
9%

12%

1% 8%
2%
2%

Construction Labor
Fringe Benets
Admin Labor
Power, Fuel, etc.
Depreciation
Materials, Components
Purchased Services
Rental Costs
Prots
Source: Census on Construction