Now more than one month past the July 1 deadline for a comprehensive state budget, Illinois Senate President John Cullerton said he’d be willing to compromise on, among other things, prevailing wage laws to deliver a long-awaited agreement.

Speaking to the Chicago Tribune last week, Cullerton listed prevailing wage laws, which require that construction workers on state-funded construction projects be paid a wage comparable to a set county average, as one of the first budget items he’d concede to Gov. Bruce Rauner’s pro-business, anti-union “turnaround agenda.”

But while Cullerton’s hypothetical concession might seem small, some across the state warn a full repeal would have drastic, if not dangerous, consequences, driving down wages, endangering worker lives and hurting local tax bases, despite having no real effect on construction costs or worker efficiency.

Frank Manzo, policy director for the Illinois Economic Policy Institute, called prevailing wage laws the “best deal for taxpayers.”

“A prevailing wage law keeps construction costs down by promoting a high-skilled, high-quality construction workforce that completes jobs on time, the first time,” Manzo wrote in a 2014 study of prevailing wage laws in Illinois, Indiana and Ohio.

Manzo argued that prevailing wages, which vary across the state and depend partially on costs of living, bolster local economies by increasing tax revenues and local purchasing. “A prevailing wage law also supports in-state contractors and builds local middle class jobs while driving economic development,” he said. “Ultimately, prevailing wage laws protect worker incomes and raise tax revenues while reducing reliance on government assistance.”

A full repeal of the policy, Manzo said, would have severe economic effects. Between McClean, Tazewell, Peoria, Woodford and Stark counties, he said repeal would cost roughly 107 jobs, $4 million in tax revenues, and about $39 million in local economic output.

Statewide, the effects would be even direr. In Illinois, where in-state workers completed 93 percent of all construction work last year, a full repeal would cost 3,300 jobs, roughly $1 billion in economic output and $44 million in tax revenue, he said.

Bob Schroeder, business manager for the Pekin-based Local 231 chapter of the Laborers’ International Union of North America (LIUNA), said prevailing wage laws are vital to maintaining a skilled workforce.

“There’s no doubt that the prevailing wage sets a standard for the area,” Schroeder said. “If you don’t have a standard, then it’s basically a race to the bottom for wages.”

Schroeder said the policy has a tremendous effect on the Pekin economy as well, and argued that, absent the policy, the area might see an influx of out-of-state workers getting paid on state-financed projects. Those workers, he said, will contribute only a small amount of their paychecks to the local economy, sending their money instead to their home states and giving little back to Pekin.

Conversely, he argued skilled Illinois workers would also be more likely to move to states with prevailing wage laws, which would have residual effects for industries across Tazewell County.

“Our wage standard sets the benchmark for industry, for retail, for everybody,” he said. “If our prevailing wage package was lower, everybody else’s would be lower too.”

Sean Stott, director of governmental affairs for LIUNA, echoed those claims, adding that the migration of skilled laborers to prevailing wage states would also result in more dangerous work zones. “Prevailing wage creates an incentive to make the contractors more efficient and productive,” Stott said. “If you have people who stick around in the industry and make it a career, you’re obviously going to be gaining skill. You’re going to be gaining experience, and in the case of unions, you’re going to be getting extensive training.”

That combination of skill and experience, Stott said, means more efficient and timely construction projects — a claim backed by Manzo’s research, which shows that without a prevailing wage, worker productivity decreases between 11 and 14 percent, while wages drop by up to 13 percent.

The reason is simple: “Workers are paid higher because they are more productive.”

Additionally, his work found no “discernible effect” on project efficiency between states with and without prevailing wage laws. He did, however, find large disparities in other areas, including a 15 percent increase in workplace injuries and a 53 percent increase in health and pension benefits for workers in prevailing wage states. The last part, he said, is critical to keeping workers off tax-subsidized welfare programs, including government healthcare, and thus saving states more money.

In non-prevailing wage states, Manzo also noted a spike in construction fatalities. Should Illinois repeal the policy, he estimated the state would see at least seven more deaths annually.

So why the governor’s focus on prevailing wage laws?

Bad math, Manzo says.

In his most recent study of the governor’s economic policy, Manzo rated Rauner’s claims on prevailing wages as “utterly false.” Rauner has repeatedly called for striking the prevailing wage, claiming the law increases the cost of statewide construction by 20 percent and raises school construction costs by upwards of $160 million per year.

Manzo, however, argues that the math on which the governor’s claims are based is inherently flawed. He said the Anderson Economic Group, oft-touted by the governor, fails to account for many variables in its research— namely, the direct correlation between incentives and worker efficiency.

“By assuming there is no relationship between wages paid and work performed, the Anderson Economic Group ignores the efficiency wage principle, where higher wages can actually raise the productivity of workers by creating incentives for construction workers to work harder and more responsibly, and for contractors to invest in apprenticeship training programs,” he said.

Rauner’s claim that repeal would cut some 25 percent of construction costs is mathematically impossible, Manzo said. Wages account for roughly 20 to 25 percent of public construction projects, he said. For Rauner’s math to work, workers would essentially have to work for free.

And while Manzo is unsure of what Cullerton’s concessions on the prevailing wage law would be — he called the senate president's claims “vague” — he said repeal would only hurt Illinois workers while manifesting no significant cost-savings or increases in construction efficiency.

Follow Robert Downen on Twitter at @Robert_Downen