Estimated effect of New York's state prevailing wage law on state income and sales tax revenues from blue-collar construction workers, 2016
| Assumptions and estimates (from Table 2) | ||
|---|---|---|
| Percent change in hourly wage | 2% | 4% |
| Net change in annual earnings, blue-collar construction workers (in millions) | $326.4 | $652.7 |
| Sales tax | ||
| Average ratio of state sales tax to aggregate personal income, 2011–2016 | 1.06% | 1.06% |
| Estimated change in state sales tax, 2016 (in millions) | $3.5 | $6.9 |
| Income tax | ||
| Average ratio of after-credits state tax liability to family income, blue-collar construction workers, 2000–2016 | 1.70% | 1.70% |
| Estimated change in state income tax, 2016 (in millions) | $5.6 | $11.1 |
| Total tax | ||
| Estimated change in state sales and income tax, 2016 (in millions) | $9.0 | $18.0 |
Notes: The two data columns in the table represent the impact associated with the Kessler and Katz (2001) estimate that the repeal of a state’s prevailing wage law results in a 2 percent to 4 percent decline in the average hourly wage for its blue-collar construction workers on all projects, both public and private.
Sources: Aggregate annual state sales tax data from the New York State Department of Taxation and Finance. Aggregate personal income for New York state from the Bureau of Economic Analysis. Ratio of after-credits state tax liability and family income for 2000–16 estimated from variables provided by the Annual Social and Economic Supplement (ASEC) to the Current Population Survey.