The federal prevailing wage law known as the Davis-Bacon Act was passed in 1931 after the great depression. In 1979, nine states repealed laws enforcing prevailing wages as a large-scale “deregulation” and “privatization” movement began in our country across all types of industries. This has not been beneficial to the public because the short-term bottom line is more often valued over people and workers’ wages.
In California, our prevailing wage law requires hourly rates and benefits to be paid at scale based on where the construction project is located. The law prevents the driving down of local wages and allows local union contractors to compete on a level playing field with nonunion contractors. California’s prevailing wage law encourages the hiring of skilled local workers and ensures that there are skilled supervisory personnel on the job. Additionally, where prevailing wages are paid, training and job safety programs are more prevalent.
Prevailing wage laws do not drive up the cost of construction. A study comparing 391 school projects between 1991 and 2000 conducted by University of Utah’s Chair of Economics, Dr. Peter Phillips, showed no statistical cost difference between schools built with and without a prevailing wage laws. Prevailing wage laws have no impact on “private” construction projects, but do prevent contractors from importing lower wage workers from other states to fill construction jobs intended for local residents and paid for by the taxpayers.
Recently the Fourth District Court of Appeal ruled that California’s charter cities can avoid prevailing wage requirements. At a time when our cities are cash-strapped for revenue and people in our own communities need good paying jobs, cities should not hide behind their municipal charter and look only at the short-term bottom line because prevailing wages help build our local economies.
A simple premise supports the economic benefit of the prevailing wage law. When workers are paid prevailing wages, their income enters the stream of commerce. Workers who earn a livable wage in turn spend their income in our communities at restaurants, car dealers and other businesses. This generates income for our businesses and revenue for our cash-strapped local governments to pay for public services such as fire and libraries.
Cities should not look only at the bottom line. The Davis-Bacon law enacted 78 years ago makes good economic sense and has a broader economic impact. Consequently, we should insist that federal stimulus funding for our local construction projects stay in our communities at prevailing wages.
Tracy Emblem is an attorney and a Democratic candidate for U.S. Congress, California’s 50th District.