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NewsFlash: July 8, 2008

New study punctures common prevailing wage myth

Critics of prevailing wage laws argue that they inflate government contract costs. But a growing body of economic studies finds that prevailing wage regulations do not increase costs. The Economic Policy Institute report, “ Prevailing Wages and Government Contracting Costs” [PDF] by economic analyst Nooshin Mahalia, finds that most researchers have found that prevailing wage regulations in practice do not increase government contracting costs. Mahalia’s analysis shows that the studies that prevailing wage opponents cite contain a critical flaw that makes their findings unreliable.

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