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There are some very obvious administrative issues that come up when the wage rates for the same job appear in an irregular manner. The complexity of keeping up with these wage rates considerable raises the administrative costs and allow for the possibilities of fraud and abuse.

Empirical Evidence:

According to the theory, prevailing wages laws should cause unemployment in the areas in which it is implemented in, “since at the above-market “prevailing” wage, some workers are not hired compared with the number that might be when employers and workers are free to negotiate wages themselves” (Vedder 1997). It is easy for us to test this hypothesis. It has been noted that the construction industry is one that is most affected by prevailing wages laws. It has also been noted that in an average year, about twenty five percent of all the construction in US takes place in the public sector. This public sector is one that sees the implementation of the prevailing wages laws in many states, including Michigan. In 1996, for example, public construction in the US was over $141.1 billion, almost precisely one-fourth the total new construction of $568.9 billion (U. S. Bureau of the Census 1997). For the purpose of this example, we shall divide the states into two basic categories: one that would include the eighteen states who do not have prevailing wages laws, and the other would include the thirty-three states that have such laws in effect. Michigan (and 12 others) can be categorized as being ‘strong’ prevailing wage laws (Thieblot 1996, 317). By comparing the number of construction workers per thousand jobs in these states, it was found that those states that were strong in prevailing wage laws had the highest percentage of unemployment.

Another way to approach this problem is to observe and analyze the experience that Michigan underwent when the prevailing wages laws was repealed for the duration of 30 months from December 1994 to June 1997. According to various studies that were conducted, it was found that the job growth in the construction industry was small in Michigan’s prevailing wages period (about 4,000 jobs per year). This was comparable to the 17,600 per year that were created once the prevailing wages laws was abolished for the brief period of 30 months. This suggests a sluggish rate of job growth during the era of wage restraints was followed by a marked expansion in the job market when those restraints were removed (Vedder 1997). Some people might argue that this can be related to the economic boom of the early 1990s or for seasonal patterns. However, seasonally adjusted figures also show the same results that there were more jobs created in the period of 30 month in which the prevailing wages law was repealed.

It was also found that the employment grew during the period in which the prevailing wages laws were not app本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。