These American workers are still being paid like it’s the 1980s
Thanks to a web of loopholes and limits, the federal government has been green-lighting hourly pay of just $7.25 for some construction workers laboring on taxpayer-funded projects, despite decades-old laws that promise them the “prevailing wage.”
Over the past year, the U.S. Department of Labor has formally given approval for contractors to pay $7.25 for specific government-funded projects in six Texas counties, according to letters reviewed by Bloomberg. Those counties are among dozens around the nation where the government-calculated prevailing wage listed for certain work-like some carpenters in North Carolina, bulldozer operators in Kansas and cement masons in Nebraska-is just the minimum wage.
That’s in part because, according to publicly available data from the Labor Department’s Wage and Hour Division, the agency is relying on wage survey data in more than 50 jurisdictions that’s from the 1980s or earlier. Experts said that’s a far cry from what Congress intended when, starting with the Depression-era
Davis Bacon Act, it passed a series of laws meant to ensure that private companies contracted for governmentbacked projects pay their workers at least in the vicinity of what others get for the same work in the same geographic area.
In an emailed statement, the Labor Department didn’t address whether the decades-old data is a problem.” The Wage and Hour Division carefully plans where to survey on an annual basis to ensure that prevailing wage rates reflect the reality of construction pay practices in a locality. The division identifies potential survey areas based on a number of criteria, including where available data on active construction projects in an area reveal changes in local pay practices such that a survey is necessary,” the department said.
Because government contracts are often required to go to the “lowest responsible bidder,” supporters say prevailing wage rules prevent a “race to the bottom” in which exploitative companies who pay workers less outbid safer, higher-quality firms, and in turn drive down industry standards to pocket more taxpayer dollars. Opponents of prevailing wage rules counter that they’re intrusive mandates that waste money, inflating construction costs in order to help unionized firms beat non-union competitors.
In recent years, the opposition-largely
Republicans and industry groups-scored a series of wins, successfully pressing state governments in Arkansas, Indiana, Kentucky and West Virginia to repeal their own “little Davis Bacon” rules. By contrast, the federal statutes remain in place, despite the efforts of Rep. Steve King, R-Iowa, who said last year that “no one can claim to be a fiscal conservative if they think the federal government needs to inflate the cost of wages.”
But for some workers, that guarantee of a prevailing wage no longer carries much weight. For taxpayerfunded projects in seven states, surveys used to determine the prevailing wage for some jobs haven’t been conducted for three decades or more.
In Maine’s Cumberland and York counties, the U.S. Department of Labor lists prevailing wages for carpenters of just $9.54 an hour (with 59 cents worth of fringe benefits) and $9.26 (without benefits), respectively. Those rates are based on wage surveys from 1994 and 1988. But the average union carpenter in those counties now makes approximately $22 an hour, plus about $15 in benefits, Erlich said. Even nonunion contractors there, to compete for employees in a tight labor market, would pay around $18 to $25 in total hourly compensation. The failure of government to keep up with what’s going on in the labor market, he said “is a large piece” of why construction has faded as “a pathway to the middle class.”