About Prevailing Wage
The Minimum Wage for Skilled Construction Work
The Prevailing Wage is the minimum wage for skilled construction work on publicly funded projects—including bridges, roads, water projects, tunnels, pipelines, municipal buildings, courthouses, schools and libraries. It is a market determination based on government surveys of the average pay rate (wages, fringe benefits, training contributions) for each construction craft in a geographic area.
Prevailing wage standards not only promote a level playing field for local businesses, but support the training programs needed to prepare local workers for careers in the skilled crafts. That’s why research consistently shows that prevailing wage standards lead to better economic and industry outcomes—including more local jobs, less poverty, and safer, more efficient and productive worksites—with no significant impact on total project costs.
AMERICA’S CONSTRUCTION INDUSTRY
Construction is America’s 4th largest industry, generating $1.4 trillion in annual economic output (equivalent to the auto, air transportation and oil and gas industries’ combined output). More than 770,000 construction industry firms support more than 6.6 million jobs that pay over $380 billion in wages to all employees. The U.S. Bureau of Labor Statistics projects that the construction industry will have the second fastest rate of employment growth between 2014 and 2024.
More than 25% of all annual construction output, or $363 billion, is spent on government owned construction projects such as roads, bridges, schools, transit systems, water projects and municipal buildings. Federal and state governments also provide tens of billions of dollars in subsidies each year on private projects, such as construction of low income housing.
About three quarters of all construction jobs are performed by skilled workers in one of several construction crafts. These crafts include carpentry, cement masonry, plumbing, electrical, bricklaying, ironwork, heavy equipment engineering, roofing, painting, road building, demolition, environmental mediation and much more. Each of the crafts demand a unique set of skills, training, safety requirements and performance standards because construction is a dangerous and physically demanding occupation. In 2015, 19% of all workplace fatalities in the United States involved construction worksites.
Because of the dangers associated with construction work and the significant public investments made each year in construction projects, public policy plays an important role in ensuring fair market competition for businesses, an adequate supply of skilled labor, and promoting minimum wage and workmanship standards that strengthen our economy and our industry.