- For LIUNA Leaders
Protecting Paychecks, Defending Taxpayers and Creating Build America Jobs
Federal Davis Bacon law mandates payment of locally prevailing wages on projects funded by the federal government. There are a number of states that have “Little Davis Bacon Acts” or state prevailing wage mandates. Davis-Bacon laws prevent government spending from undermining local wages and living standards. Where unions are strong, the prevailing wage is likely to be close to what local union workers make. Where unions are not strong, the prevailing wage is likely to be lower than what local union workers earn.
Corporate interests and their advocates claim that Davis-Bacon increases taxpayer costs, but numerous studies have shown it does not. Employers who oppose prevailing wage
, do so because they want to cut workers’ paychecks and pocket the pay-cuts as profits.
In fact, a study of school construction costs in Great Plains states showed that prevailing wage laws not only do not raise construction costs – but also that repealing such laws hurt taxpayers and workers. After Kansas’ prevailing wage law was repealed, wages fell 11 percent, training programs declined 38 percent, jobsite injuries rose 19 percent and employer contributions to pensions fell 17 percent, according to the study prepared for the Kansas Senate.
Highway construction costs are actually higher when workers are paid less, according to an analysis of Federal Highway Administration data by the Construction Labor Research Council. The study showed that the cost to build a mile of highway in high-wage states (averaging $17.65 per hour) compared with low wage states ($9.76 an hour) was, on average, $123,057 per mile less due to higher productivity.
A Wisconsin study (Belman and Voos) of the state’s prevailing wage law showed that potential savings from wage cuts were far outweighed by the loss of income to communities. The annual cost of repealing the law was estimated at $123 million in lost income and a net tax revenue loss of $6.8 million. In Missouri, a similar study (Kelsay) showed a loss to the state of $318 million to $384 million.
Cost overruns are more likely without prevailing wage laws. In Utah, a repeal of the state prevailing wage law was followed by a tripling of cost overruns, which was attributed to lower productivity and a less skilled workforce (Phillips).
The U.S. Department of Labor (DOL) is responsible for conducting wage surveys and determining the local prevailing wages. DOL collects project wage data and then determines the prevailing rates for each construction classification in each county and publishes the rates at www.wdol.gov. LIUNA participates in wage surveys to protect the livelihood of LIUNA members. Find out more in LIUNA’s Field Guide to Davis-Bacon Prevailing Wage Surveys or check the prevailing wage determinations for your area.
Anti-worker groups like the Associated Builders and Contractors and other corporate interests have been pushing a radical agenda in Congress to remove federal Davis Bacon protections and block the use of project labor agreements (PLAs) on federal construction projects. Lawmakers voted on nearly a dozen bills in the previous Congress that threatened Davis Bacon and PLAs and one vote has been held in the current Congress – but more are expected.