By Jeremy Kehoe
IBEW International leadership celebrated President Biden administration’s move to raise the prevailing wage standard of the Davis-Bacon Act, which will put thousands of extra dollars in the pockets of nearly 1 million construction crews working on federally funded projects.
President Biden this month directed the Department of Labor to reinstate the Act’s “prevailing wage” provision – the basic hourly rate of pay and benefits paid to workers – and restore its previous definition, a definition which former President Ronald Reagan scrapped 40 years ago.
“The Biden-Harris administration’s announcement updating Davis-Bacon is a victory for construction workers across the country,” said IBEW International President Kenneth W. Cooper. “The rule modernizes and strengthens the prevailing wage regulations. It is proof once again, that union members are at the heart of the Biden-Harris administration’s efforts to rebuild America by restoring the middle class.”
The update to the Act – which the U.S. Supreme Court described as “a minimum wage law designed for the benefit of construction workers” to prevent contractors from basing their bids on wages lower than those prevailing in the area – will now redefine how those prevailing wages are calculated.
The new rule gives the DOL authority to adopt prevailing wages determined by state and local governments, issue wage determinations for labor classifications where insufficient data was received through the wage survey process, and update outdated wage rates.
Before Reagan changed the federal rule in the 1980s, employers were required to pay construction workers on federal projects the equivalent of wages paid to at least 30 percent of workers in a given trade in a specific geographical area. Reagan changed that rule so that the prevailing wage was determined by wages paid to 50 percent of workers.
“The final rule reverses Reagan-era changes that weakened the law’s original intent – ensuring that federally funded or assisted projects support good-paying local jobs for local workers,” Cooper said. “For the past 40 years, a single low-wage contractor could depress wage rates on federal contracts. This rule change will allow construction workers to gain ground they lost in the 1980s, increasing the wages of millions and preventing low-road contractors from undercutting the workforce.”
The new rule will provide periodic updates for non-collectively bargained wages, add anti-retaliation provisions, and strengthen the DOL’s ability to withhold money from a federal contractor in order to pay employees their lost wages.
This latest pro-union move by the Biden administration comes on the heels of a flurry of infrastructure and technology investment and pro-labor legislation developed and passed by Biden and the Democratic party.
This legislation includes Inflation Reduction Act – the largest investment in infrastructure since President Eisenhower’s Interstate Highway System – which contains about $400 billion in green-energy spending, including tax credits for green-energy producers and purchasers of electric vehicles, and the CHIPS and Science Act, which provides more than $50 billion to encourage manufacturers of semiconductors to build factories in the United States. These two pieces of legislation build upon the $1.2 trillion bipartisan infrastructure bill, which President Biden signed into law in November 2021. These three landmark laws are expected to create millions of jobs in construction, manufacturing, clean energy, and other sectors.
“The (Davis-Bacon) rule is especially significant given the major federal investments the Biden-Harris administration has made through the Inflation Reduction Act, the Bipartisan Infrastructure Law and the CHIPS and Science Act, which will create hundreds of thousands of prevailing wage jobs for IBEW members,” Cooper said. “The IBEW applauds this historic achievement and looks forward to continuing to work with the administration to ensure that federal investments support family-sustaining careers.”