There's a simple step the government can take to raise pay and solve labor shortages — it's called prevailing wage law
, which is essentially a minimum wage set for workers on government contracts. The laws are meant to create a level playing field for businesses bidding on government contracts, according to study co-author Frank Manzo, executive director of the Illinois Economic Policy Institute. They make sure labor costs are equal across the board and that taxpayer dollars go towards projects that maintain local standards of pay, workforce skill, and quality.
"The idea is that to combat these labor shortages that we're seeing, the service sector would benefit from wider utilization of state policy instruments that improve job quality for workers, and ensure that employers are competitive in any type of labor market," Manzo said."And the data shows that prevailing wage laws can deliver on that front.
They found that in states with prevailing wage laws, wages were higher and benefits were more plentiful, both things that have. By creating a higher wage standard, the laws could lift all boats, forcing companies to raise pay and therefore making low-paid jobs more middle-class. It would help ease the labor shortages Bruno calls a"Great Refusal," where workers are on the hunt for higher quality jobs.
"What our study finds is that because of the way prevailing wage laws boost worker incomes, improve health insurance coverage rates, and promote job stability, is that those prevailing wage laws can address this labor shortage," Manzo said. The laws"improve the labor market competitiveness of these custodial service jobs by making them more attractive."
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