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Should prevailing wages prevail? Re‐examining the effect of prevailing wage laws on affordable housing construction costs

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  • Matthew Hinkel
  • Dale Belman

Abstract

The United States faces two parallel crises: one with affordable housing supply, and one with maintaining residential construction labour standards. Historically, issues with labour standards have been addressed on public works through prevailing wage requirements. Labor standards—while good for workers—may increase construction costs; higher costs, in turn, negatively impact low‐income families by reducing supplies of affordable housing. In this article, we re‐examine whether this trade‐off exists and, if so, its implications. We estimate that prevailing wage requirements add, at most, 6 per cent to the costs of affordable housing construction.

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  • Matthew Hinkel & Dale Belman, 2022. "Should prevailing wages prevail? Re‐examining the effect of prevailing wage laws on affordable housing construction costs," British Journal of Industrial Relations, London School of Economics, vol. 60(4), pages 761-783, December.
    • Handle: RePEc:bla:brjirl:v:60:y:2022:i:4:p:761-783
    DOI: 10.1111/bjir.12663
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