Published date: 11/15/2023

Season’s Greetings! And welcome to the second installment of a series of blogs delving into one of the construction industry’s longest running philosophical questions: Why should we care about prevailing wages?

Yes, the realm of labor compliance can seem daunting. And yes, newcomers can feel overwhelmed. Hell, even seasoned professionals with years of experience can get frustrated when exploring new depths to laws they hadn’t even known existed. But before you launch into a slew of four-lettered words and yell “Who cares!?” at the top of your lungs (although, we wouldn’t blame you if you did), may we first suggest taking a minute to reflect on the reasons behind this “madness”? Or, in the event that you never actually had the “why’s” of Davis-Bacon and prevailing wage explained to you in the first place, perhaps consider starting here… with this very blog (or Part 1 of the series, in case you missed it).

And with that, let’s continue the conversation. Here’s a few more reasons why prevailing wages are worth caring about.

Prevailing Wages Help with Retention of Skilled Workers

Prevailing wages incentivize skilled workers to stay within the industry instead of seeking alternative career opportunities elsewhere.

Why we should care:

Worker retention has a cascading effect on several factors that ultimately impact the health of the industry as a whole. This shouldn’t be a surprise to anyone experienced or familiar with public works. There has been a labor shortage for decades, and the problem is only getting worse as fewer and fewer people today are choosing blue collar careers.

Contractors across the country frequently struggle to staff projects with adequate labor so that they can complete work in an ideal timeframe, especially with the current industry push to bring in/provide apprentices (but more on that below). This can extend project deadlines, place an unnecessary burden on existing staff, and increase project costs (think overtime and other ancillary expenses that come with overworking employees). Not to mention, it can expose contractors to additional safety liabilities on the job. Removing the financial incentive (i.e., prevailing wages) for workers would only exacerbate this issue.

It should go without saying that, without prevailing wages, the pool of skilled workers (those that have the appropriate experience and knowledge needed to perform quality work in a safe and efficient manner) would shrink considerably. Cheap, unqualified (and potentially unethically exploited) labor would undoubtedly enter the market to plug a few of the holes, but not without consequences. Decreased productivity. Inefficient use of materials and increased waste. More work-related injuries (and potentially even deaths). An influx of change orders. All in all, it’s a poor return on the public’s investment in its infrastructure.

Prevailing Wages Promote Adequate Training & Apprenticeship Standards

Prevailing wage regulations work in conjunction with apprenticeship requirements to provide a roadmap for construction careers and help ensure that workers obtain the right skills and experience for the job.

Why we should care:

In industries where technical expertise is vital, training and apprenticeships are the vehicle for shaping a skilled, competent workforce. When individuals see a direct link between their learning efforts and increased earning potential (making prevailing wage), they are more inclined to invest in skill-building. This fosters a cycle of continuous improvement as individuals seek opportunities to upgrade their abilities, adapt to evolving technologies, and stay current with industry advancements.

In most cases, apprenticeships offer a tiered approach to pay. That means apprentices are rarely getting paid the full prevailing wage rate for a craft, but rather a certain percentage of it. And this percentage depends on 1) the amount of experience and hours the worker has accumulated working on the job (or to date in their career so far), and 2) where that amount falls under the tiers outlined by the program. This creates a natural progression and a goal for the worker: to continue to work their way up the tiers (building skills and earning more along the way) and eventually reach journeyman status.

Seasoned professionals that have built a career through prevailing wage work bring with them technical mastery, institutional insights, and refined problem-solving capabilities cultivated over years of work. They then play an integral part in the journeyman-apprentice mentorship that ensures these skills are passed on to the next apprentice in line. This transfer of knowledge and expertise erodes without prevailing wage and apprenticeship requirements, as do the industry standards that come with them.

Prevailing Wages Help Reduce a Contractor’s Burden of Recruiting and Training Efforts

The last one here is a rather simple one and a byproduct of the first two reasons covered above. Prevailing wages and apprenticeships help alleviate the weight a contractor would otherwise carry in acquiring and/or training an adequate labor force.

Why we should care:

When we get down to brass tacks, prevailing wages represent competitive compensation. Afterall, it’s much harder for anyone to justify finding a new job or changing careers if they would be taking a pay cut to do something else. And as previously mentioned, this significantly helps with employee satisfaction and retention. With less turnover, a construction company is spending less time and effort sourcing new talent. Considering the state of the labor market in general, this is a win-win employers and workers alike.

Not to mention, without the foundation of prevailing wages, we would not have the training and apprenticeship programs that do a lot of the heavy lifting when it comes to supplying the industry with a pipeline of new skilled labor. And, again, getting these new workers in the door is a critically important endeavor as the older generations of workers retire and phase out of the industry. Those voids need to be filled, and competing with the cultural shifts that favor college degrees and white-collar jobs has already proven itself a challenge in and of itself. We don’t need to make it any harder than it already has been.

If you are looking to learn more about Davis-Bacon and prevailing wage compliance, check out our online courses at https://lcptracker.com/academy/.

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These materials are being issued with the understanding that LCPtracker is not engaged in rendering legal or other professional services and is providing these for informational purposes only. If legal, accounting, or tax expert assistance is required, the services of a competent legal, accounting or tax professional should be sought.