Prevailing Wage Laws
Toward the end of the 1800’s, the United States was experiencing one of the greatest periods of growth in its history. Advances in technology and industry, such as improved construction machinery, transportation and electricity, made it possible to do things that were previously only dreamt of. Rural electrification was becoming more widespread. Roads and bridges, flood control and dam building were ever more possible with these advances. Struck with these new possibilities, states such as Pennsylvania were embarking on more and more projects that would improve the standards of living of their citizens.
However great the possibilities may have seemed, it soon became apparent that everything was not what it seemed. Shoddy work performed by fly-by- night operators using low or poorly skilled labor were under mining the local craftsmen by paying their workers wages substandard compared with the local wage market. The local workers, while enjoying the new improvements, saw their wages being driven down in order to compete. State and local governments saw their tax revenue stagnating or declining. Local merchants lost out. Simply because when these cutthroat contractors left town, they took their money with them.
In 1891, Kansas became the first state to try and remedy this situation. It passed the first law requiring that when a project was proposed for the state, or a local entity, or one that would use public funds that the local prevailing wage rates for that area were to be paid. New York passed similar laws in 1894 followed by Oklahoma (1909), Idaho (1911), Arizona (1912), New Jersey (1913) and Massachusetts in 1914.
By the middle of the 1920s, United States government was already greatly involved in heavy construction projects ranging from flood control and dam building to expanding and housing the institutions of government. In 1927, Senator James Davis of Pennsylvania and Congressman Robert Bacon of New York introduced legislation that would require payment of the local area wages standard on federally financed projects. Their aim was not necessarily to protect workers, but to try and provide some market stability in an inherently unstable construction industry. After four years of hearings, President Herbert Hoover signed the Davis-Bacon Act into law on March 3, 1931.
Over the next thirty-five years, thirty more states enacted similar statutes, now known as “little Davis-Bacons”, into law. On August 15, 1961, Pennsylvania enacted its own version of a “little Davis-Bacon,” requiring state and local governments to ensure that the prevailing area wage rate was paid on their projects that exceeded $25,000. This put into place some measure of protection for Pennsylvanian workers and their families.
Find out how our states’ law works by following this link for the Pennsylvania Department of Labor & Industry.
