WASHINGTON—The federal prevailing wage, intended to ensure that workers on public construction
projects are paid decent wages, is as low as $7.25 an hour in some areas because the Department of Labor has based it on wage surveys from the 1980s or before. In the last year, according to letters reviewed by Bloomberg News, the department has allowed contractors to pay the $7.25 federal minimum on projects in six Texas counties—including bulldozer operators in the booming city of Austin. Wage standards in 50 jurisdictions in seven states are equally outdated. That makes the Davis-Bacon Act, the 1931 federal prevailing-wage law, “meaningless,” said Mark Erlich, former executive secretary-treasurer of the New England Regional Council of Carpenters, because it means that union contractors will be underbid. In the Portland, Maine area, prevailing wages for carpenters are $9.54 an hour plus 59 cents of benefits—when union carpenters average about $22 plus $15 in benefits, and nonunion contractors have to pay $18 to $25 total. The Labor Department is in a difficult position, former Wage and Hour Division head David Weil told Bloomberg, because it has limited resources to update its surveys, and employers are sometimes unresponsive. Read more
