A study released by the Minnesota Center for Fiscal Excellence found that the prevailing wage determination process utilized by the Minnesota Department of Labor and Industry leads to inaccurate wage rates on construction projects. A disproportionate 75 percent of prevailing wages reflected union rates in the period analyzed in the study, even though just 32 percent of private construction workers in Minnesota belong to a union. 

The authors studied survey data on nonresidential commercial construction from April 2015 through May 2016 reported to the Department of Labor and Industry. Examining that data led to several stunning findings, including that 72 percent of all prevailing wage rates were set using old rates, imported rates or a combination of both. Furthermore, in some areas, a small number of individuals played an outsized influence in determining prevailing wage rates for that area. These findings contradict the intent of prevailing wage laws, which is to provide local wages to local workers. 

The authors concluded the study with practical policy recommendations to reform Minnesota’s prevailing wage calculation process to achieve more accurate rates.