Posts tagged prevailing wage
Biden’s New ‘Prevailing Wage’ Rule Will Cost Taxpayers, Benefit Unions, and Hike Inflation
August 18, 2023 // Actually, the changes are a significant step backward. Biden is effectively undoing a major change made by the Reagan administration—changes that were made, fittingly, to help combat inflation. That change, made in 1982, repealed the "30 percent rule" that guided the process for determining what wages would be paid on which projects. Under the 30 percent rule, the prevailing wage for any particular area would be based on the highest wages paid to at least 30 percent of workers within the same area. You don't need an advanced degree in accounting to see how that mandate could artificially hike wages on federal projects. The government barred itself from even considering bids that might pay average wages, thereby obligating taxpayers to pay more than they might have had to in an open market.
ABC: Final Davis-Bacon Rule Undermines Taxpayer Investments in Infrastructure
August 9, 2023 // “The final rule comes in the midst of challenging economic conditions facing the construction industry, including high materials costs and a skilled labor shortage of more than half a million in 2023,” said Brubeck. “The onerous new requirements and artificial inflation of construction costs imposed by this rule will only exacerbate these headwinds and undermine taxpayer investments in infrastructure.” ABC submitted nearly 70 pages of comments on the DOL’s proposed rule, and its more than 50 significant changes, urging the DOL to withdraw the proposal. The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects of $2,000 or more to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers. According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers. The Congressional Budget Office estimates that repealing the 1930s-era Davis-Bacon Act would save the federal government $24.3 billion in spending between 2023 and 2032. A May 2022 study found that the Davis-Bacon Act costs taxpayers an extra $21 billion a year, increases the price tag of construction projects by at least 7.2% and inflates construction workforce wages by 20.2% compared to local market averages if the DOL calculated prevailing wages using modern and scientific methodology via the U.S. Bureau of Labor Statistics.
In Philly, VP Harris details new labor rules for federal construction projects
August 9, 2023 // Vice President Kamala Harris, on Tuesday, visited Philadelphia to announce changes to labor rules that could give higher wages to construction workers on federal projects. At the headquarters of labor union DC 21, in Northeast Philly, Harris detailed the Labor Department's first update in decades to the Davis-Bacon Act of 1931, a law that requires the payment of prevailing local wages on public works.
Biden Labor Department offers new rule on “prevailing wages” that is less accurate
August 8, 2023 // “The Biden administration’s decision to turn back the clock on Davis-Bacon Act regulations to a Carter administration-era version will benefit a few well-connected unions while raising costs on taxpayers. The administration’s new rule will allow a survey of just a third of workers to calculate the ‘prevailing wages’ to be used when awarding federal contracts. It only takes a basic understanding of math to know that that 30 percent is not a majority and therefore cannot be said to be ‘prevailing’ in any common understanding of the term. Rather this new rule will allow for cherry-picked statistics that result in wage inflation, driving up the costs of those contracts.”
A Union View from Inside
June 20, 2023 // UA local unions not only suppress opportunities for nonunion workers but also seek to limit union membership to protect the high earnings of current members; in other words, the UA is doing the exact opposite of what it claims to do: instead of “protecting” workers, the UA intentionally excludes potential pipefitters from the labor market to limit supply and drive up prices. Worse, this exclusion means that less pipefitting work gets done. American industries processing steam, petrochemical, water, and other materials suffer from a loss of valuable skilled labor. Probably the best example of this policy of disenfranchisement is the pictured flier, which I saw inside the union hall. The flier claims that bureaucrats are trying to destroy the UA apprenticeship program. Of course, I was surprised to learn that apprenticeships would be targeted by politicians, since politicians usually support work and skill training regardless of political affiliation. As neither the flier nor the website directly referenced the bill in question, I did my own research. In June 2019, the Department of Labor proposed an expansion of apprenticeship programs, awarding $183.8 million to support the development and expansion of training programs. This included industry, employer, government, nonprofit and union training programs. The United Association told its members that union apprenticeships were being attacked. In truth, the DOL was merely seeking to expand apprenticeship options, including union apprenticeships.
32 Knowledge Tracker How New York’s Democratic Socialists Brought Unions Around to Public Renewables
June 20, 2023 // ince they did not initially have access to state-level union leaders, the DSA organizers started by building relationships with local utilities unions across the state. Public Power New York recruited hundreds of volunteers to help steer the victories of numerous DSA-endorsed state legislators in 2020 and 2022. One successful candidate was climate organizer Sarahana Shrestha, now a state assemblymember from the Hudson Valley. She unseated her long-tenured Democratic primary opponent, in part, by highlighting his opposition to the BPRA. The bill began to move in Albany in a real way when unions outside of the utilities sector, like the New York State United Teachers, the New York State Nurses Association, and the Service Employees International Union, endorsed the bill. Once the bill passed the state Senate in the summer of 2022, the utilities unions took a more serious interest in the plan. The BPRA’s labor provisions include prevailing-wage assurances and require that all the NYPA’s renewable projects include collective-bargaining agreements for every employee, including contractors and subcontractors. These agreements must be in place before work can start on a project. The law creates a $25 million just-transition fund to retrain fossil fuel–sector workers who could lose their jobs, and specifies that union leaders must be consulted in this process. It also prioritizes hiring these retrained workers for the NYPA’s renewable projects.
A Bay Area homebuilder planned a project with union rules. Can it work anywhere else?
May 9, 2023 // Developers are subject to state fines of up to $10,000 per month for each missing monthly compliance report. If a company is found to be skirting the “skilled and trained” standard entirely, the penalties can rack up much higher and much quicker: $200 per day “for each worker employed in contravention” of the rule.
Michigan: Prevailing wage, Right to Work reforms’ effect unclear here
April 10, 2023 // The recent reforms are a net positive for unions in every industry, he said. Indeed, for the construction trades, in particular, prevailing wage requirements help prevent non-union bidders from undercutting union workplaces on public construction projects, Fashbaugh said.
Opinion: Say No to prevailing wage
March 13, 2023 // Prevailing wage mandates artificially lift the cost of government construction projects by forcing bidders to pay the local or, “prevailing,” wage in a particular area. Typically, that means union scale wages. Michigan repealed its prevailing wage law in 2018. The Michigan House of Representatives voted this week to reinstate it. The Senate should vote it down. Research shows prevailing wage laws artificially raise the cost of government construction projects. In a forthcoming study, economist Michael Hicks, co-author of this post, estimates that the cost of road construction is raised by between 8.5% and 14.3% in quality-adjusted road miles. In Michigan in 2018 that would translate to between $5,900 and $9,200 in additional costs per mile. Who foots these extra costs? Taxpayers.
Michigan House votes to repeal Right-to-Work, restore prevailing wage
March 9, 2023 // The legislation, now headed to the Senate for final votes as early as next week, would end a 2012 law that prohibits compulsory union dues or fees. The House also voted to restore a construction-industry “prevailing wage” law the GOP repealed in 2018. Democrats touted the union-backed measure as a restoration of worker rights to collectively bargain for wages, benefits and workplace safety. Democratic Gov. Gretchen Whitmer supports the repeal, but in the past has blasted GOP efforts to make policy bills referendum-proof by including appropriations, decrying it as a form of legislative "abuse."