We Did Not Buy Cheaper Roads.
We Did Not Buy Cheaper Roads. We Bought Cheaper Bids.
A Republican ran a construction wage bill this year. More than seventy percent of Utah voters supported the idea. It lost on the House floor by twenty-one votes. Here is the arithmetic nobody did out loud.
Rod Moser
Candidate, Utah House District 45
September 3, 2026
The bill almost nobody heard about
On February 20 of this year, the Utah House voted down H.B. 245, the Construction Wage Standard Act. The vote was 25 yes, 46 no, with four members absent.
It was not a Democratic bill. The chief sponsor was Representative Tyler Clancy, a Republican from Provo. It cleared the House Business, Labor and Commerce Committee eleven days earlier on a favorable recommendation of 6 to 5. A master plumber who owns a mechanical contracting company stood up at the press conference to support it.
Then it died, and almost nothing was written about it.
I want to walk through what that bill actually said, what the objection to it was, and whether the objection holds up. I am going to show my arithmetic, name who paid for every study I cite, and tell you where I think the other side has a real point. Then you can decide.
What it actually did
Three things.
One. Before the state spends your money on a public construction project, the Labor Commission looks up what that trade already earns in that county. Not the highest wage. The median. The middle.
Two. On projects of $100,000 or more, contractors have to pay at least that. Everybody still competes for the job. Nobody wins it by paying the crew less. The wage is a floor under the worker, not a cap on the bid, so contractors still compete on efficiency, crew skill, scheduling, materials and overhead.
Three. Apprentices in federally approved programs stay on their program schedule, with a floor of half the standard.
That is the whole bill. It covers public projects only. It never touched a private home or a private jobsite.
The objection, and what it would have to mean
The objection to a wage standard is always the same. It costs too much.
So let us do that arithmetic together, because it is not hard and almost nobody does it.
Labor is roughly 23 to 25 percent of what a construction project costs. That figure comes from two separate research reviews, and they agree. The other three quarters is materials, land, equipment, financing, design, permits and overhead. Steel and copper and interest rates are set somewhere far from Utah. The wage line is the only piece a bidder really controls, which is exactly why it is the piece that gets cut.
Now hold that next to the claim. When someone tells you a wage standard raises a project's total cost by fifteen or twenty percent, run it backward. To move a total by twenty points when labor is only twenty-four percent of it, you would have to raise the labor line by roughly eighty-seven percent. You would have to nearly double what every single person on that site earns.
Nobody proposed that. Nobody has ever proposed that.
Four dollars and eighty cents
Let me put a real number on it, and let me deliberately use the number that hurts my own argument the most.
For every hundred dollars the state spends on a road, about twenty-four of it is labor.
Now take the full gap between union and nonunion pay. The Bureau of Labor Statistics puts union median weekly earnings at $1,404 against $1,174 for nonunion workers in 2025. That is a gap of about twenty percent. Hand every worker on that site the entire gap.
Twenty percent of twenty-four dollars is four dollars and eighty cents.
So the honest, worst-case, everything-stacked-against-me number is this: $4.80 on a hundred dollars.
My question is simple. Would you pay four eighty on a hundred to make sure the people building your roads and your kids' schools earn what their own county already pays for that trade?
I would.
And H.B. 245 never even asked for that. It set the county median, not a union rate. A contractor already paying the middle wage in his own county owed nothing new. The real number is smaller than $4.80. I used the big one on purpose, because if the argument survives the worst case, it survives.
What happens when you pay the going rate
Here is where it gets interesting, and where I would ask people who assume they disagree with me to keep reading.
Independent Project Analysis is a benchmarking firm. Its clients are the corporations building refineries, chemical plants and pharmaceutical facilities. Owners hire IPA to tell them why their capital projects blew the budget. In December 2022 IPA published a study of 1,550 U.S. projects executed over twenty years, ranging from $200,000 to more than $6 billion, comparing union, open shop and mixed labor.
What it found:
- Union crews were 14 percent more productive
- Projects needed about 10 percent fewer craft workers
- Union wage rates ran 9.7 percent higher
- Schedules slipped 8 percent less
- Monthly turnover in the pipefitting trade was one third lower
- Projects were 40 percent less likely to hit a skilled labor shortage
- And total project cost came in 4 percent lower
Read the mechanism, because the mechanism is the whole point. You pay 9.7 percent more per hour. You need ten percent fewer hours. The people doing the work quit at a third the rate, so you are not constantly retraining. You finish closer to schedule. Net, the building costs less.
That study was commissioned by a joint labor-management fund, and I will say so every time I cite it. The dataset underneath it is IPA's own owner-side project database, built for the companies writing the checks.
It is not the only finding like that. Steven Allen, working through the National Bureau of Economic Research in 1984, found square footage per worker-hour was 38 percent higher in union-built office buildings after controlling for capital, labor quality, region and building characteristics.
Utah already ran the other experiment
We do not have to speculate about the alternative. Utah repealed its own state prevailing wage law in 1981, one of nine states that did so between 1979 and 1988.
The Utah Department of Transportation keeps records called "Final Estimates Processed for Payments." Researchers at the University of Utah pulled them and compared road contracts from 1970 to 1981 against 1982 to 1994. Here is what happened.
| 1970 to 1981, before repeal | 1982 to 1994, after repeal | |
|---|---|---|
| Winning bid, as a share of the state engineer's estimate | 91% | 89% |
| Final cost, as a share of that same estimate | 93% | 95% |
| Average overrun above the accepted bid | 2.0% | 7.3% |
Look at what moved. After repeal, contractors bid lower. The winning bid dropped from 91 percent of the engineer's estimate to 89. And then the gap between what was bid and what was finally paid more than tripled, from two percent to 7.3.
Let me be precise about what that does and does not prove, because precision matters more than a good line. Final costs stayed below the engineer's estimate in both periods. I am not telling you Utah roads got more expensive in absolute dollars, because that is not what was measured. What was measured is that the low bid stopped meaning what it used to mean.
We did not buy cheaper roads. We bought cheaper bids.
The same body of research found that in the repeal states, construction training fell about 40 percent and injuries rose about 15 percent. In Utah specifically, construction earnings went from 125 percent of the average state wage down to 103 percent. That research was funded by building trades unions, and I will say that every time too. The road contract numbers come from UDOT's own files, and you can ask for them.
Where I could be wrong
I am not going to pretend this evidence runs one direction, because it does not, and you should not trust anyone who tells you it does.
Allen, the same economist who found the 38 percent productivity gap in office buildings, published a paper in 1987 titled "Can Union Labor Ever Cost Less?" He found the union advantage holds in large commercial office buildings because of economies of scale, but that nonunion contractors had lower costs at every output level in school and hospital construction. The advantage is sector specific. It is not a law of nature.
A 2009 meta-analysis of 45 econometric studies found that unions have a significant negative effect on firm profits, and that the effect is larger in the United States than elsewhere. So it is entirely possible for union labor to raise productivity and lower the owner's total cost while still compressing the contractor's own margin. Both things can be true at once, and if you are the contractor, the second one is the one you feel.
And a 2018 study out of the University of Kentucky, commissioned by Associated Builders and Contractors, found West Virginia school construction costs per square foot fell 7.3 percent after that state repealed its wage standard. The report itself conceded it did not control for other cost factors and had very few post-repeal schools to compare against, and the savings promised at the time had been 25 percent. But it is on the record, and I am putting it here.
What I will defend is narrower than "union labor is always cheaper," because that claim is not true. What I will defend is this: the cost objection to a public wage standard does not survive the arithmetic. There is no version of the labor share of construction cost that lets a county median wage move a project budget by fifteen or twenty percent.
One more objection worth answering, because it is the one I get most. People say a wage standard reduces competition and shrinks the bidder pool. The evidence says otherwise. After Indiana repealed its wage standard, public projects still averaged three bidders, unchanged. A 2021 peer-reviewed study of 263 California community college projects found no statistically significant effect on the number of bidders.
Why this keeps happening here
Some of the pressure toward the lowest possible wage is structural and I do not blame anyone for it. On a competitive hard bid, labor is the line you control. Utah's construction workforce is 3.8 percent unionized, so in a lot of this state there is no union contractor to call anyway. Data center owners are in a land grab and whoever can staff a site next month wins.
Some of it is not structural.
Nothing requires a contractor's labor savings to become the public's savings. Utah's own 1981 experience is that bids fell and the gap to final payment tripled. Meanwhile the Economic Policy Institute estimates a misclassified construction worker, called a 1099 subcontractor when he is really an employee, loses between $12,441 and $19,527 a year, and that social insurance systems lose $1,790 to $3,070 per worker per year in contributions. A contractor who does that underbids an honest contractor without being one bit better at building anything. That is not a labor issue. That is a cheating issue, and it should bother conservatives more than it bothers anybody.
It is also worth knowing who was working which bills. Associated Builders and Contractors of Utah publishes its own legislative review. In the 2026 session it lists opposition to H.B. 245, the wage standard; H.B. 294, an E-Verify requirement for companies with 125 or more employees; S.B. 178, a right-to-work repeal; and S.B. 179, a $20 minimum wage. All four failed. I am not claiming to know what any individual member was thinking on the floor that day. I am telling you what is in the public record.
The part that connects to everything else I write about
Most of what I have spent two years on is quasi-governmental development authorities and public infrastructure districts. There are roughly 221 PIDs in Utah now. Seventy-one have issued debt, up to $4 billion of it, against a total state debt of about $1.1 billion. Our State Auditor's description of the arrangement is direct: "For a developer, this is a gift."
Here is the connection. PID bonds pay for horizontal infrastructure. Roads, sewer, water, dry utilities. That is public infrastructure, built with tax-exempt public debt, repaid by future residents through a public assessment, on land that becomes a public street grid.
If a developer finances a road out of his own pocket, what he pays his crew is his business. Once he finances it with municipal debt that homeowners pay back for thirty years, it is a public project, and it should carry public standards.
Public money, public standards. That is a conservative sentence, not a liberal one.
I will be careful about how far I push it. Those savings are financing and rate-of-return savings, not a pile of cash sitting somewhere marked for wages. And PID bonds fund the horizontal work, not the framing crews on the lots. So the honest version of this ask is narrow: it reaches the excavation, paving and utility contracts. That is enough.
The definition in H.B. 245 said "public entity" means the state or any other governmental entity within the state that expends public funds. On its face that reaches special districts. It contained no carve-out for PIDs and no explicit inclusion either. That ambiguity is worth fixing on purpose, in daylight, in the next version of this bill.
What I would do
Bring H.B. 245 back, and be honest about what it costs. Four eighty on a hundred, at the very worst, and less than that in practice.
Write the PID question into it, so that infrastructure financed with public debt carries the same standards as infrastructure financed with public appropriations.
And go after misclassification with real enforcement, because the honest contractor in this state is currently competing against people who are not playing by the rules, and he is losing.
Seventy percent of Utah supports the idea. A Republican wrote the bill. It still lost by twenty-one votes. Whatever else that gap means, it is not a partisan disagreement. It is a gap between what people here want and what happens on the floor.
Ask whoever represents you how they voted on House Bill 245. It ought to be back in January.
Go check me
Every number above, and who paid for it.
- H.B. 245, Construction Wage Standard Act (2026), chief sponsor Rep. Tyler Clancy, R-Provo. Bill text, first substitute and action history at le.utah.gov, 2026 General Session. Committee favorable 6-5 on February 9. House third reading failed 25-46 on February 20. Enacting clause struck March 6.
- Polling. Y2 Analytics, an independent Utah pollster, reported by KSL and the Deseret News on November 20, 2025, and by Fox 13 on November 19, 2025. More than 70 percent support area standard wages on public construction. 78 percent prefer a bid that pays a fair local wage over simply the cheapest bid. 79 percent prefer higher quality over lower cost.
- Labor as a share of construction cost. Economic Policy Institute, "Prevailing wages and government contracting costs: A review of the research." ICERES, "Project Labor Agreements: A Research Review." Both place labor at 23 to 25 percent of total construction cost. Both organizations are labor aligned, and they are reviewing a literature that includes work funded by both sides.
- The 1,550 project study. Independent Project Analysis, "Quantifying the Value of Union Labor in Construction Projects," December 2022. Commissioned by the Mechanical Industry Advancement Fund, a joint labor-management committee. The underlying data is IPA's proprietary owner-side benchmarking database.
- Productivity in office and school construction. Steven G. Allen, "Unionization and Productivity in Office Building and School Construction," NBER Working Paper 1139 (1984). And "Can Union Labor Ever Cost Less?", NBER Working Paper 2019, published in the Quarterly Journal of Economics (1987).
- Utah's 1981 repeal. Peter Philips, Garth Mangum, Norman Waitzman and Anne Yeagle, "Losing Ground: Lessons from the Repeal of Nine Little Davis-Bacon Acts," University of Utah Department of Economics, February 1995. Funded by building trades unions. The road contract figures come from Utah DOT, "Final Estimates Processed for Payments," 1985 and 1994.
- Unions and firm profits. Hristos Doucouliagos and Patrice Laroche, "Unions and Profits: A Meta-Regression Analysis," Industrial Relations (2009). Meta-analysis of 45 econometric studies and 532 estimates.
- The West Virginia finding. University of Kentucky Center for Business and Economic Research (2018), commissioned by Associated Builders and Contractors.
- Bidder counts. Frank Manzo IV and Kevin Duncan, "The Effects of Repealing Common Construction Wage in Indiana," Illinois Economic Policy Institute (2018), labor aligned. Peter Philips and Norman Waitzman (2021), peer reviewed, 263 California community college projects.
- Wages and benefits. U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, March 2026, and Union Members, 2025. Union median weekly earnings $1,404 against $1,174 nonunion. Utah union membership 3.8 percent.
- Misclassification. Economic Policy Institute, "Misclassifying workers as independent contractors is costly for workers and states," 2025 update. Labor aligned.
- Trade association positions. Associated Builders and Contractors of Utah, 2026 Legislative Review, published by ABC Utah.
- Public infrastructure districts. Utah State Auditor Tina Cannon, quoted by KSL, April 26, 2026, and KPCW, August 25, 2026. Approximately 221 districts, 71 having issued debt, up to $4 billion.
Four of the sources above were paid for by labor and I named every one. Four more are federal statistics or peer reviewed work. One was paid for by a contractors association and I put its finding in anyway, in the section where I say where I might be wrong. The rest is the Legislature's own website and the State Auditor's own words.
If I have something wrong, write me and show me. I will correct it here.
Rod Moser is a candidate for Utah House District 45 and a licensed real estate agent in Salt Lake County. Reach him at Rod@utahgrit.com.
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