Prevailing Wages

Prevailing Wage and Davis Bacon Laws

It is about publicly financed construction projects.

It is about making fair profit margins and productivity the drivers of competitive bidding, NOT who can exploit workers the most.

It strengthens and stabilizes the construction industry.

It leads to higher quality construction.

It protects workers (both their paychecks and their safety and health).

Think About It!

Government sets a minimum wage for the most basic of work. Why shouldn’t we also have a minimum wage for the skilled professionals who build our schools, our roads, all of our public infrastructure?

That is all a prevailing wage is. It is the fair, government-regulated minimum wage that EVERY employer must pay its employees for publicly-funded construction projects.

Why the need?

Before state and federal prevailing wage laws were enacted, government contracts were often awarded to unscrupulous contractors who would win competitively-bid work through the exploitation of workers. Of course, that was bad for workers, but it was also bad for the communities who were footing the bill. Prevailing wage laws (called Davis Bacon Laws at the federal level) prevent government spending from undermining local wages and living standards.

Don’t believe the lies!

Corporate interests who oppose prevailing wages claim they increase the overall cost of construction. WRONG!

  • Numerous studies of REAL projects (not some fanciful hypotheticals) prove that prevailing wage projects do NOT lead to higher costs.
  • These fair wage deniers wrongly claim that prevailing wage projects cost 20-30% more than non-prevailing wage projects. Consider this: even including benefits and payroll taxes, labor costs are roughly 20-30% of construction contracts. So, if what they were saying was true (and lowering labor costs were the only remedy), workers would be paid NOTHING for their labor!
  • Let’s face it: employers who oppose prevailing wage do so because they want to cut workers’ paychecks and pocket the pay-cuts as profits.

 

The Utah (Failed) Experiment

Here’s a story you should know. Once upon a time, in a land about 2,000 miles from LIUNA’s Eastern Region, politicians in Utah decided to repeal their prevailing wage laws. In the decade that followed their not so innovative policy change, cost overruns on public construction tripled. One reason for the additional overruns, according to researchers from the University of Utah: change orders increased as the decrease in wage rates led to a shift to a low-skilled workforce and lower productivity. The repeal of prevailing wage laws in Utah failed to save money and failed workers and working families. End of story.

 

 

Did You Know?

 

The total family income for construction workers is estimated to be 12.5% higher in prevailing wage states than in non-prevailing wage states.

 

Workers in strong prevailing wage law states…

 

…earn more.

 

…spend more locally.

 

…pay more taxes.

Equal Pay for Equal Work

Women workers face a wage gap.

They make on average, 85% of what men make.
Prevailing wages mandate people get paid the same wage for performing the same work.

African Americans workers face a wage gap.

They make on average, 76% of what white workers make.
Prevailing wages mandate people get paid the same wage for performing the same work.

Hispanic/Latinix workers face a wage gap.

They make on average, 73% of what white workers make.
Prevailing wages mandate people get paid the same wage for performing the same work.