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From Inside the ABC:
Opponents argue that prevailing wage rates drive up construction costs, a simplistic view that equates higher wages with higher overall construction costs. Wages and benefits are only about one-third of overall construction costs – and that percentage has been falling. Prevailing wage requirements help ensure that competition among contractors in the bidding process is focused on areas of overall cost efficiency, high productivity and innovative methods. The most qualified and responsible contractors will find other cost-saving measures before reducing wages and benefits of his or her work force. A contractor who has a good safety record will save on insurance costs, workers compensation rates, and legal fees. A contractor who pays his vendors and suppliers on time has better rates on material, supplies and equipment rentals.