Federal Public Works Projects
A significant portion of overall construction dollars are spent on public works in the United States. The competitive bidding and prevailing wage protections placed in federal and state law assure that government spending on construction is contracted through a fair and transparent process and does not have an adverse effect on wages paid to construction workers. These laws are only protective if they are followed by the participants in public contracting and enforced by the government and private parties. This section provides information and links to web sites that explain the significance and positive influence of the effective enforcement of state and federal prevailing wage laws.
Federal Government Spends Billions on Construction of Public Works
According to statistics gathered by the Office of Federal Procurement and reported by the Department of Labor, more than $40 billion federal dollars were spent in 2004 on contracts covered by the Davis Bacon and Related Acts and the Service Contract Acts. See Report to Congressional Committees. A PowerPoint Presentation prepared by the government makes the buying power of the federal government clear. A recent Report published by the Economic Policy Institute concludes that payment of prevailing wages yields positive social outcomes that are not achieved on non-prevailing wage jobs. See: Prevailing Wages: 2008 Review of the Research by EPI.
Rationale for Prevailing Wages
As a major market participant, the US government has a huge impact on wages in the construction sector. This buying power, combined with the rule that government contracts must be awarded to the lowest responsible bidder, has the potential of creating a race to the bottom if contractors seeking to win contracts cut wages to compete. The federal government has a powerful ability to affect wages, particularly in the construction sector where workers often travel to where work is available and where the amount of work fluctuates as natural disasters, such as Hurricane Katrina and increased infrastructure needs, may heighten the need for public construction activity.
To prevent any negative effect on wages in local labor markets where the federal government contracts for construction and services, Congress adopted the Davis Bacon Act in 1931 and the McNamara-O'Hara Service Contract Act in 1965.
Critics complain that the prevailing wage laws are inflationary, but these laws are based on sound economic theory and have been successfully defended in several states in recent years. The National Alliance for Fair Contracting has collected scientific and economic studies that defend the role of prevailing wages. One paper prepared in late 2008 argues that Government Spending Must Lead to Good Jobs and enforcement of the laws requiring payment of prevailing wages will lead to a positive business climate that will benefit all Americans.
Federal and State Resources for Members Only
The sections shown on the left side index are available for members only. These sections explain the competitive bidding process, the process for filing bid protests, the Department of Labor's wage survey system for determining the prevailing wage, the process for challenging a Department of Labor wage determination, the rules governing coverage under the prevailing wage protections and the methods for enforcing the right to receive prevailing wages on federally funded and assisted projects.
State Resources on these same topics follow the Federal Resources and may likewise be accessed by clicking on the left side index and are available for members only.
Page Last Updated: Mar 19, 2010 (14:39:56)