ECN Forum Forums General Topics of the Trade General Discussion Area Prevailing Wages

I have been quiet for a while but this has me going. Prevailing wages are determined by states. Prevailing wage is supposed to be the "average wage" and some states require it to be paid on any job where all, or part, of the money is from public funds. In Illinois it is county by county, and it is set monthly by the director of the Department of Labor. While it is supposed to be the "average wage" it is just the union wage in disguise. What prevailing wage laws do, in my opinion, is make sure that the cost of any public job in the state is as high as it can possibly be. No company that I have ever heard of pays higher than union wage, but many, if not the majority, pay less. By forcing companies to pay (and of course charge more) for publicly funded jobs these laws guarantee without a doubt that we, the taxpayers, pay more. The prevailing wage for electricians in Illinois, including benefits, (which must be paid also) is over $48.00 in the northern part of the state. I am sad that the public does not realise that they are paying more than they have to. Wouldn't it be strange for a big corporation to say that they will not buy something unless they are charged at the absolute highest price that is paid anywhere for it? The governor of Illinois is threatening to go to Canada to buy drugs for state workers because they are cheaper there and the state can save a ton of money (and lose jobs in pharmacies and related businesses). Yet the same governor is in favor of prevailing wage laws which insure that the state pays the highest possible price for construction work. I am sure that a lot more dollars are spent on construction than on prescription drugs for state workers. This is not a union/non union question, it is a common sense question about the the wise use of our public funds. Something to think about.

wirewrestler,
in that case shouldn't these jobs be opened up to public bid and the best qualified bid get the work..

mustang



[This message has been edited by mustangelectric (edited 09-20-2004).]

so prevailing wage is usually set pretty close if not exactly to what the union pays..they also have a say in the way the law is written..

i always thought prevailing wage was just the union scale..

mustang

They are open to public bids. It is the labor price which is regulated. This makes all of the bidders costs higher. Every company that does this kind of work must pay the same high price. If a company could pay their help $38.00 for example, it would be possible to bid the job a lot lower. If the labor price is regulated, it is not true competetion. It is not a free market system.

WireWrestler,
If your theory is true, why do we lose multi-million dollar private jobs to non union competition by 1 or 2 percent or less. From what I have seen in the industry the non union employers know the union/prevailing rates and bid just under them. The dollars are very close, the money just goes into different pockets. For that matter, how do we get any private work at all??

20 CFR 656.40 - Determination of prevailing wage for labor certification purposes.


Section Number: 656.40
Section Name: Determination of prevailing wage for labor certification purposes.

--------------------------------------------------------------------------------


(a) Whether the wage or salary stated in a labor certification

application involving a job offer equals the prevailing wage as required

by Sec. 656.21(b)(3), shall be determined as follows:

(1) If the job opportunity is in an occupation which is subject to a

wage determination in the area under the Davis-Bacon Act, 40 U.S.C. 276a

et seq., 29 CFR part 1, or the McNamara-O'Hara Service Contract Act, 41

U.S.C. 351 et seq., 29 CFR part 4, the prevailing wage shall be at the

rate required under the statutory determination. Certifying Officers

shall request the assistance of the DOL Employment Standards

Adminstration wage specialists if they need assistance in making this

determination.

(2) If the job opportunity is in an occupation which is not covered

by a prevailing wage determined under the Davis-Bacon Act or the

McNamara-O'Hara Service Contract Act, the prevailing wage for labor

certification purposes shall be:

(i) The average rate of wages, that is, the rate of wages to be

determined, to the extent feasible, by adding the wage paid to workers

similarly employed in the area of intended employment and dividing the

total by the number of such workers. Since it is not always feasible to

determine such an average rate of wages with exact precision, the wage

set forth in the application shall be considered as meeting the

prevailing wage standard if it is within 5 percent of the average rate

of wages; or

(ii) If the job opportunity is covered by a union contract which was

negotiated at arms-length between a union and the employer, the wage

rate set forth in the union contract shall be considered as not

adversely affecting the wages of U.S. workers similarly employed, that

is, it shall be considered the ``prevailing wage'' for labor

certification purposes.

(b) For purposes of this section, except as provided in paragraph

(c) of this section, ``similarly employed'' shall mean ``having

substantially comparable jobs in the occupational category in the area

of intended employment,'' except that, if no such workers are employed

by employers other than the employer applicant in the area of intended

employment, ``similarly employed'' shall mean:

(1) ``Having jobs requiring a substantially similar level of skills

within the area of intended employment''; or

(2) If there are no substantially comparable jobs in the area of

intended employment, ``having substantially comparable jobs with

employers outside of the area of intended employment.''

(c) For purposes of this section, similarly employed in the case of

researchers employed by colleges and universities, Federally Funded

Research and Development Centers (FFRDC's) administered by colleges and

universities or Federal research agencies, means researchers employed by

colleges and universities, FFRDC's administered by colleges and

universities, and Federal research agencies in the area of intended

employment.'' If no researchers

are employed by colleges and universities, FFRDC's administered by

colleges and universities, and Federal research agencies other than the

employer applicant, researchers employed by colleges and universities,

FFRDC's administered by colleges and universities, and Federal research

agencies outside the area of intended employment shall be considered

``similarly employed.''

(d) A prevailing wage determination for labor certification purposes

made pursuant to this section shall not permit an employer to pay a wage

lower than that required under any other Federal, State or local law.

[45 FR 83933, Dec. 19, 1980, as amended at 63 FR 13767, Mar. 20, 1998]

Effective Date Note: At 63 FR 13767, Mar. 20, 1998, Sec. 656.40 was

amended in paragraph (b) introductory text by adding the phrase ``except

as provided in paragraph (c) of this section,'' immediately after the

phrase ``For purposes of this section,''; paragraph (c) is redesignated

as paragraph (d), and a new paragraph (c) is added, effective May 4,

1998.









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Wow Charlie,
That will make your head spin, that is to say not spinning already and only within an arms reach aggreement between employer and employee represenitive can the spinning begin; and only from a complete stop, no pre-spinning will be allowed under U.S.C 65.79.3 et all.

That aside, in all that mumbo jumbo, I do see some ways to manipulate it in the numbers for "average wages". And it still means greasing a palm or two in the end. Paying artificialy inflated wages to comply with this highest bidder stratagy, is probhably not what people had in mind when these laws were created. Nor were all the other add ons like all of the workers needed to be from a particular town at a certain time of day on the second tuesday of each month, and have these initials. Only to find out its the congressmans brother-in-law. Even in private work it is just the same, some stipent to someone who has got the power to hide or divide what has been put in his hand.

wirewresler,
Your right on, somebody has to pay for it, and its probably us the taxpayers. Whenever you artificially set a wage higher than what the "supply and demand" calls for, then it is comming out of someone elses pocket.
Its the same with minimum wage, it does not work, the cost will just get passed down.
Unions can be the same way. We should all be paid for what we are worth to the employer, if not, we can quit and go somewhere else or start our own business. Its called Free Enterprise, or Capitolism. "Its what works".

Another way of looking at it is that it is supposed to put all bidders on a level playing field. The pros and cons are viewed differently depending on how your effected by the law. If you're an electrician residing and working in/or around Manhattan, paying the local taxes and cost of living, then you would be for the prevailing wage rule. If you were an out-of-state electrician and unemployed, you certainly would benefit from the increased wage via prevailing wage to cover your travel and possible lodging expenses. If you're a local taxpayer, you may not like it at face value but the wages earned by local electricians, who are also local taxpayers, will stay in the local economy.

If you're a bottom-feeding entrepreneur, general contractor or developer, then you would seek the cheapest labor in all the land. Of course, you would have your government contract taken away, due to gross incompetence, given to a higher paying competent contractor and cost the taxpayers even more in the end.

I agree, it is not a union vs. non-union issue, though the union scales are readily available numbers to work with. On most of the large privately funded worksites in my area I don't usually recongnize the electrical contractor because they are from some distant place where the cost of living is significantly less expensive and his workforce is payed per their "home-town" scale, even though they often get stuck with a lot of traveling expenses. The developer and the coffee truck guy are the only ones doing well here.

Andy

Hi,
I never realized that prevailing wage was so complicated.

I wish all electricians would stick to it.

I don't see how a plumber should make more than an electrician!

Thanks for the replies.

-regards

MUSTANG