ConstructionPro Week, Volume: 4 - Issue: 31 - 08/14/2015

Should “Prevailing” Wages Be Tied to Union Rates?

By Bruce Jervis

 

Prevailing wage statutes go back to the Great Depression era. The federal model, of course, is the Davis-Bacon Act. These laws, at the federal, state and local levels, create a mechanism for establishing minimum wage rates and fringe benefits for the various trade and labor categories on a particular public works project.

 

Prevailing wage laws have long been criticized as a tool of the labor unions. Too often, say critics, the “prevailing” wages are the same as those negotiated in collective bargaining agreements. This nullifies any competitive advantage of non-union contractors and inflates labor costs on public projects.

 

A case out of New Mexico highlights a recent amendment to that state’s prevailing wage law. The statute now mandates wages and fringe benefits based solely on collective bargaining agreements in the locality of the project. Public officials do not have discretion to deviate from the negotiated union rates.

 

At least the New Mexico statute is an express, rather than implicit, link to union collective bargaining agreements. Should there be any link at all? There are ongoing, longstanding efforts to repeal the Davis-Bacon Act. But is this politically feasible given current concerns with income disparity and inadequate hourly wages? Your comments are welcomed.

 

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