Wages, Productivity and Highway Construction Costs: Updated Analysis 1994-2002

Over the years there have been various pronouncements of the cost savings that would be realized if the Davis-Bacon Act was repealed. These assertions remain unsubstantiated. There is no documentation to support this position.

Little existed to back the proposition that wage rates and construction costs for highways have no direct correlation until the National Heavy and Highway Alliance, in 1995, commissioned an analysis of the costs to build a mile of highway. Data from the Federal Highway Administration (FHWA) was utilized to examine the relationship between wages, labor hours and highway construction costs. The conclusion was that hourly wage rates are a poor indicator of cost per mile to build highways. Lower wage states can have high total costs per mile and higher wage states can have lower total costs per mile.