- Features | September 14, 2018
Why "Prevailing Wages" Exist & How to Take Advantage of Them
The year was 1927. Charles Lindbergh flew the Spirit of St. Louis across the Atlantic and Henry Ford, following the success of the Model T, released the mass production Model A with over 400,000 sold in the first two weeks. The United States, flush with cash from the economic boom nicknamed the ‘Roaring Twenties,’ was completing federal projects such as the Holland Tunnel under the Hudson River, which connected New York and New Jersey, and starting new projects such as the Mount Rushmore federal monument. There were smaller developments too, such as the construction of a veterans’ hospital in Rep. Robert L. Bacon’s Long Island district.
In Alabama and other Southern states, Jim Crowe laws suppressed the wages of African-American labor. The contractor who won the Long Island veterans’ hospital project contrived to recruit, transport, and house African-American labor instead of utilizing local Caucasian union labor, which generated substantial savings on his bid. Bacon, seeking to mitigate the effect of “cheap migrant labor” introduced various “prevailing wage” bills 13 times over four years, but couldn’t get a law passed. It took Senator James J. Davis, a former Secretary of Labor; the Great Depression; and associated high levels of unemployment, as well as President Hoover’s support to enact the “Davis-Bacon Act” in 1931.
Since craft unions dominated the construction trades in the 1930s, prevailing wage inevitably meant the union journeyman wage. While union participation in construction has dropped precipitously, to a current low of 14%, cumbersome and lengthy U.S. Department of Labor Wage & Hour (WH) surveys continue to be completed primarily by union representatives seeking to ensure union levels of compensation are adopted. In 2004, the DOL Office of the Inspector General reported:
“A past audit observed that the methods used by WH to obtain survey data allowed bias to be introduced into wage surveys. Statistical sampling of employers was not done. Only data from employers and third parties who volunteered to participate in the surveys were considered. Consequently, data that could have influenced survey results may have been omitted. Also, employers and third parties who may have had a stake in the outcome of wage decisions were afforded an opportunity to submit erroneous data that may have influenced the survey results.”1
With this background, independent electrical contractors have an opportunity to level the playing field on prevailing wage jobs by taking a few key actions: engaging with IEC chapters, completing wage surveys, and effectively utilizing fringe dollars.
Engaging With IEC Chapters
While many members are familiar with IEC’s advocacy and craft training & apprenticeship efforts, it is worth mentioning these in the context of prevailing wage and the Davis-Bacon Act. The most successful political advocacy and engagement efforts begin at the local level. Whether it is working closely with sister advocacy organizations, such as the Associated Builders & Contractors (ABC) or meeting with local, state, and federal officials, IEC packs a powerful punch when more members are engaged. As union participation continues to wane, the opportunities for common sense reform contin