For construction workers that’s a very real threat, as the U.S. Department of Labor considers changing how it formulates Davis-Bacon prevailing wages.
For background, the 1931 Davis-Bacon Act requires that any federally funded construction projects pay the “prevailing wage” for that county. Illinois has its own prevailing wage law, that requires any governmental unit in Illinois pay prevailing wages.
In Illinois, both Davis-Bacon and state prevailing wage laws generally mirror union wages and benefits. To set those rates, both the state and the federal government survey counties to see what wage rates “prevail” on government projects.
John “Mick” Mulvaney is currently serving as acting White House Chief of Staff and as Director of the federal Office of Management and Budget. Along with new Labor Secretary Eugene Scalia, a plan is being drafted for a new wage determination formula.
Instead of looking at each craft and whether the federally funded work is residential, heavy, highway or building work, this proposal would lump these wage rates together. Residential rates would have a downward impact on construction prevailing wages.
And, instead of surveying government funded construction work separately, the wage survey would use Bureau of Labor Statistics (BLS) wage rates to determine the prevailing rate and not include benefits.
For instance, in McLean County in Central Illinois, the BLS median wage rate for a construction laborer is $23.11. For a Carpenter, it is 21.53 and for a bricklayer, $19.72. This BLS wage system does not include benefits.
This BLS wage varies by county. For Peoria, the construction Laborer rate is $20.64, the Carpenter, $26.29 and for the Bricklayer, $38.36.
For McLean County Laborers Local 362, the hourly contractual wage rate is $30.31 with benefits of $25.23. For a Carpenter 237 member, the wage is $33.04, with benefits of $28.96.
According to the projected plan, benefits would not be included in the prevailing wage rate.
Thus a McLean County construction Laborer, working on a federally funded project, would see a 57 percent wage and benefit decrease.
“Davis-Bacon is the foundation for the construction worker,” said John Penn, Midwest Region Manager and Laborers International Union Vice-President. “It is the minimum wage for construction. Because the construction industry varies according to weather and other conditions, the wage is historically formulated by looking at funded projects. Using Bureau of Labor Statistics rates and not including benefits is a dire threat to the construction worker.”
Non-union workers who are on Davis-Bacon projects receive the prevailing rate, which in Illinois follows the union rate. If this new formula, with no benefits, is used, unionized workers would see a dramatic pay cut.