Prevailing Wage policies provide the best value for taxpayers on public works projects. They strengthen the economy and the middle class with good paying local jobs, while helping to ensure that projects are completed on time, on budget, and with the highest quality of workmanship.
Prevailing Wage is the average pay rate for a construction worker in a given trade in a given geographic area. Often, these workers have completed years of training in an apprenticeship program that ensures that they know how to get the job done – on time and on budget.
Prevailing Wage laws were first written in the 1930s by Republican US Senators James Davis and Robert Bacon to curb the problem of shoddy public works, to improve workforce productivity and efficiency, and to increase competition amongst contractors.
Prior to the enactment of prevailing wage laws, government-funded construction projects had become a race to the bottom—with low-wage, low-skilled workers brought in from outside the community to do local public works jobs and to take local tax dollars with them when they left. In addition to the economic impact, these jobs were often marred by delays, poor workmanship and cost overruns.
Prevailing Wage laws changed all this, creating more local jobs, more ladders into the middle class for American families, and top quality highways, bridges, water systems and municipal facilities for taxpayers.
Most federally funded construction projects are subject to prevailing wage standards, and thirty two (32) states have similar standards in effect for state financed projects.
A growing body of peer reviewed studies have chronicled the vital impact that prevailing wage laws continue to have on our economy, and the construction industry as a whole.
For example, for every dollar spent on a Prevailing Wage project, $1.50 in economic activity is generated locally—creating tens of thousands, of additional jobs across all economic sectors.
Prevailing Wage policies are also proven to have a neutral effect on overall project costs—because the use of skilled local workers increases worksite productivity by as much as 12%; reduces material and fuel costs, worksite injury rates, and reliance on taxpayer funded public assistance programs; and decreases the risk of contractor non-performance.
For all of these reasons and more, prevailing wage policies have long enjoyed the support of leaders in both political parties. From Republicans like Rep. Paul Ryan, Former Senator Rick Santorum, and President Ronald Reagan, to Democrats like Presidents Bill Clinton and Barack Obama.