Prevailing Wage FAQs
What is prevailing wage?
Isn't prevailing wage union scale?
Doesn't prevailing wage drive up the cost of public construction?
What constitutes the prevailing wage?
Aren't prevailing wage laws enough?
What is prevailing wage?
Prevailing wage is a minimum wage that must be paid to workers on qualifying publicly funded construction projects. Most public work is awarded to the lowest responsible bidder. Establishing a minimum wage for construction workers on these projects levels the playing field and guarantees that contractors compete based on skill and productivity and not on how little they pay their workforce.
Is prevailing wage union scale?
Prevailing wage is not "union scale." "Prevailing wage" is determined by wage and benefit surveys of the local construction market that are conducted periodically by the Department of Labor for federally funded projects, or annually by the Wisconsin Department of Workforce Development for state and local projects. Depending on the local market, resulting prevailing wage rates can be 1) collectively bargained rates, 2) a mix of collectively bargained and non-bargained rates, or 3) a weighted average of wage rates. Only when collectively bargained wage rates are shown to prevail in an area, based on these survey results, will the prevailing wage be the same as the "union scale."
Does prevailing wage drive up the cost of public construction?
No. Prevailing wage simply reflects wages and benefits earned in the local construction market. Low-wage and high-wage employers compete against each other every day in the private sector. To suggest that prevailing wage drives up the cost of public construction ignores the fact that these wage rates are based on real wages, paid for real work, performed on real jobs in the private sector.
What constitutes the prevailing wage?
The "prevailing wage" is actually more than just wages. It is a measurement of the total economic benefit per hour paid to a worker. In addition to wages, that total economic benefit may include health, pension, training and other compensation, earned by craft workers in the area.
Aren't prevailing wage laws enough?
Not if a public owner is interested in sustaining the construction industry. Prevailing wage requires contractors to pay the predetermined total economic benefit paid to workers, but it does not require contractors to actually provide training, health, pension or other benefits. Wages alone cannot sustain the construction industry with a safe, skilled and productive workforce. Public owners simply aren't getting what they paid for when they use contractors who comply with the law by paying the prevailing wage, but don't provide the benefits - training, health, pension, etc. - necessary to sustain the industry.
