Our Construction Wages

The Federal Davis-Bacon law sets a wage floor for federal construction projects that prevents government spending from undermining local wages and living standards. Illinois and twenty-seven other states also have “Little Davis Bacon Acts” or state prevailing wage laws that apply to state-funded construction projects.

Prevailing wage laws ensure that all contractors bidding on public construction projects will pay family-supporting wages and that these projects will be built to the highest standards by skilled, safe, well-trained construction craftspeople. The projects built under the Davis-Bacon Act have stood the test of time while enabling generations of tradesmen and women to build better, stronger lives for themselves and their families.

Corporate interests and their advocates sometimes claim that Davis-Bacon increases taxpayer costs, but numerous studies have shown they do not. Employers who oppose prevailing wages do so because they want to cut workers’ paychecks and pocket the pay-cuts as profits.

Prevailing wages protect paychecks for Laborers and all construction workers.

  • Prevailing wage rates aren’t necessarily a “union wage.” They are set by a survey of actual wages and benefits paid to union and nonunion. But, in Illinois, the prevailing wage rate for construction laborers is the Laborers' union package (wages, benefits, and training) because our union, LIUNA, is strong and we make sure most of the construction done in our area is done by union Laborers and our signatory contractors.
  • Without prevailing wage, construction workers earn less and more families will need some form of public assistance to supplement their income.
  • Low road contractors who are working to repeal or weaken the state prevailing wage law are really out to cut workers’ paychecks and pocket the pay-cuts as profits.
  • Without a prevailing wage rate, LIUNA members could see their wage and compensation package plummet by more than 60%.

Bottom of the barrel contractors are pushing repeal so that they can cut workers’ pay and pocket the profit.

  • Responsible contractors understand that they are making an investment that helps their business succeed by fairly compensating a skilled and trained workforce.
  • It’s the irresponsible contractors who are eager to cut workers’ wages who are pushing repeal.
  • And, don’t be fooled when low quality contractors pay less in wages, they do not pass savings on to taxpayers—they pocket the profits.

Prevailing wage rates protect taxpayer investments by ensuring that public projects are built to the highest standards.

    • Prevailing wage rates often include investment in training and apprenticeship programs which not only provide a career path for workers but also ensure that projects are built to the highest standards of quality.
    • When irresponsible contractors, paying the least in wages and benefits, build our roads and bridges, there are more likely to be mistakes, workplace accidents, change orders, and cost over runs. 
    • Lowering wages actually reduces on the job productivity. For example, in a study of highway and bridge work in 10 states found that when high wage workers were paid double that of low-wage workers, they built 4 more miles of roadbed and 32.8 more miles of bridges for $557 million less

Davis-Bacon Act & Prevailing Wage Legislation: Legislative History Timeline

In the early 20th century contractors were exploiting migrating labor from the South, primarily black workers, who were paid subpar wages with no benefits under terrible conditions. This was not only harmful to the migrating workers, but it also harmed local construction workers –  whose wages were undercut and opportunities for them to ply their skilled labor were closed off.

Similarly today, undocumented workers are exploited by greedy scofflaw contractors. Steps are being taken to root out these companies and bar them from doing any more work. But the story is to be continued as the fight to protect prevailing wage is a never-ending battle.

1927–1930: Foundations and Enactment

      • 1927: U.S. Rep. Robert L. Bacon and Sen. James J. Davis first introduce prevailing wage legislation after a public works project in Long Island hired out-of-state workers at low wages, undercutting local labor.
      • Justification: To protect local labor standards from being undermined by contractors bringing in low-wage workers.
      • Impact on Workers: Helped ensure fair pay for local workers on federally funded construction projects.
      • March 3, 1931: Davis-Bacon Act Enacted
        • Requires contractors and subcontractors on federal construction contracts over $2,000 to pay workers no less than the locally prevailing wages and benefits.
        • Initial Weakness: Lacked strong enforcement and clarity in determining prevailing wages.

1935: Strengthening Enforcement

      • 1935 Amendment: Strengthens enforcement by allowing the Department of Labor (DOL) to determine prevailing wages.
        • Justification: To fix underenforcement and ambiguous definitions that allowed underpayment.
        • Impact on Workers: Beneficial—made wage determinations centralized and enforceable.

1941: Illinois enacts the Illinois Prevailing Wage Act.

1950s–1960s: Expansion and State-Level Prevailing Wage Acts

      • 1950s–60s: Many states pass their own “Little Davis-Bacon” laws to apply prevailing wage rules to state-funded construction.
        • Impact on Workers: Helped extend protections to more public works projects.

1964: Inclusion of Fringe Benefits

      • 1964 Amendment
        • Expands the definition of “prevailing wage” to include fringe benefits (e.g., health insurance, pensions).
        • Justification: Reflect the full compensation package received by workers.
        • Impact on Workers: Positive—raised total compensation and reduced loopholes.

1971: Nixon's Suspension of Davis-Bacon

      • February 1971: President Richard Nixon suspends the Davis-Bacon Act during a period of high inflation and construction costs.
        • Justification: To reduce government spending and fight inflation.
        • Impact on Workers: Negative—led to wage reductions on federal construction projects.
      • March 1971: Suspension lifted after union pressure and public backlash.
        • Result: Restoration of wage protections for workers.

1982: Reagan’s Narrowing of Application

      • 1982: Reagan administration changes DOL regulations to:
        • Exclude certain worker classifications.
        • Alter how prevailing wages are calculated (e.g., "30% rule": the wage paid to at least 30% of workers becomes the prevailing rate, not the majority rate).
        • Justification: To reduce costs and government regulation.
        • Impact on Workers: Mixed to negative—some workers saw wage suppression and reduced classifications.

1990s–2000s: State-Level Repeals and Weakening

      • 1995–2000s: Several Republican-led states repeal or weaken state-level prevailing wage laws (e.g., Idaho, Arizona, Indiana, Wisconsin, Michigan, Missouri, Kentucky and Utah, etc.).
        • Justification: Cited cost savings and increased competition.
        • Impact on Workers: Generally negative—studies show wage reductions, increased reliance on out-of-state labor, and lower training/apprenticeship rates.

2005: George W. Bush’s Suspension (Hurricane Katrina)

      • September 2005: President George W. Bush suspends Davis-Bacon in areas affected by Hurricane Katrina.
        • Justification: To speed up reconstruction and reduce costs for emergency rebuilding.
        • Impact on Workers: Harmful—reports of wage exploitation and lowered labor standards.
      • November 2005: Under political pressure, Bush lifts the suspension.
        • Result: Restoration of prevailing wage protections in the Gulf region.

2011–2020: Renewed Political Attacks

      • 2011–2020: Multiple legislative attempts (mostly unsuccessful) to repeal or limit Davis-Bacon at the federal level.
        • Justification: Claims of inflated construction costs and inefficiency.
        • Impact on Workers: Potentially negative, though few changes enacted during this time.

2018 – Illinois Reforms

      • Changes: Illinois improved enforcement mechanisms, including requiring contractors to file certified payrolls electronically.
      • Justification: Combat wage theft and ensure compliance with wage determinations.

2021–2023: Strengthening under Biden Administration

      • 2022: Department of Labor under Biden proposes a rule to restore the “30% rule” (majority-to-plurality wage determination method).
        • Justification: To better reflect true local wage standards and prevent undercutting.
      • August 2023: Final rule published:
        • Reinstates the “30% rule.”
        • Increases enforcement tools.
        • Requires more frequent wage updates.
        • Impact on Workers: Strongly positive—ensures higher, more accurate wages and better enforcement.