Prevailing Wage standards benefit workers, employers and local communities
The Baltimore-D.C. Metro Building Trades Council is a strong advocate of expanding prevailing wage across the DC metro area. Prevailing wage laws establish wage floors for different types of skilled construction workers on taxpayer-funded and taxpayer-subsidized projects, based on wages, benefits, and workforce training investments that are paid for similar work in the local area where the projects are to be completed.
By preventing public bodies from awarding bids to contractors that pay less than the local market rate, prevailing wage laws promote a level playing field for local businesses, an adequate supply of skilled local trades workers, and ensure that workers can afford to live in the communities where they are building roads, bridges, public transit systems, airports, paths, parks, schools, water and sewage lines, broadband internet infrastructure, large solar and wind power systems, and other public projects.
Prevailing wage laws promote a level playing field for local businesses, an adequate supply of skilled local trades workers, and ensure that workers can afford to live in the communities where they work.
State, County and City Prevailing Wage Wins
The Baltimore-D.C. Metro Building Trades Council played an instrumental role in enacting the 2020 Virginia state law that required the Commonwealth to adopt prevailing wage and provided localities the authority to do so. On the heels of this victory, we worked with local officials to pass prevailing wage ordinances in the City of Alexandria and in Arlington, Fairfax, Loudoun andPrince William Counties. The ordinances in each these jurisdictions had effective dates in 2022.
Similarly, in Maryland, our council and our affiliates successfully lobbied the General Assembly in 2020 to lower the state’s prevailing wage threshold from $500,000 to $250,000, and to apply the state’s prevailing wage rates to any public works project in which 25% or more of project funding is provide by the state.
At the local level, we partnered with Baltimore County and Anne Arundel County elected officials to enact prevailing wage ordinances. AnneArundel’s ordinance went into effect in July 2022, and Baltimore County’s in January 2023.
Prevailing wage laws promote a robust construction industry and a thriving middle class.
Economic Benefits of Prevailing Wage Laws
- More local spending, less “leakage.”
When local companies and workers are employed ona construction project, more project funds remain in the local economy, stimulating additional economic activity. Without adequate prevailing wage policies, out-of-area contractors can come in and take market share away from local companies and workers, which causes more project funds, jobs, income, spending, and economic activity to leak out of the local economy. - Greater efficiency and productivity on public works.
Prevailing wages foster labor that delivers superior quality work with less safety incidents. Seventy-five percent of recent peer-reviewed studies indicate that construction costs are not affected by prevailing wages. Labor costs account for only about 23 percent of total building costs, and relatively minor changes are needed to offset the effect of prevailing wage policies. - Less poverty and dependence on public assistance
By increasing construction worker incomes, prevailing wages close the earnings gap between blue-collar and white-collar workers. Because prevailing wage laws particularly lift up the pay of low-income construction workers, the absence of prevailing wage pushes the most vulnerable into poverty and propels their need for public assistance. - Reduction of race and gender pay gaps
Prevailing wage laws drastically reduce race and gender pay gaps because wage rates are determined based on location, craft, and experience. This helps ensure that all workers, regardless of their gender or ethnicity, are paid fairly for their work. - More health and retirement benefits for construction workers.
Prevailing wages increase the likelihood that a construction worker has both health insurance coverage and a pension plan available at work. - An even playing field is preserved
Prevailing wages encourage the hiring of local firms and prevent unfair competition from unethical contractors who engage in practices like cheating employees, cutting corners with quality, or neglecting safety standards. This can help ensure that all contractors are held to the same high standards, promoting fair competition and better outcomes for everyone involved.