What are the prevailing wages?

The prevailing wages are wages paid to most people involved in a specific work in a particular geographical area. In the United States, the act of Congress known as Davis-Bacon Act provides that the predominant wages will be used to determine wages and benefits of workers closed for public projects. Different state governments use their own specific methods of determining what these wages should be. Identification of prevailing wages may be controversial in that it can lead to further expenditure on public projects and benefits for workers protected trade unions.

In 1931, the US Congress passed the Davis-Bacon law. Its purpose was to prevent the government from using workers by setting wages for a certain job that was lower than the normal amount paid to the workers who perform this work. This law also came out of perceived racial discrimination in trade unions, as this allowed any employees to be a contractual government to receive wages of comparable Union's clutter. Many states have approved since thenThe actual version of the Davis-Bacon law to create a localized method of determining prevailing wages.

Although different methods are used, the prevailing wages for the area are usually determined by the wage earned by a majority of workers in a particular area. For example, imagine that a state has 100 certified welders, and 65 earns $ 35 (USD) per hour. In such a case, the predominant wage for welders in this state would be $ 35 per hour, and that would be the rate paid for any welder hired by the state for a public project. This is also a method that can be used to determine the benefits paid to these workers.

This method means that the predominant wages do not always reflect the average wage amount paid to a particular group of workers. Using the example, imagine that the rate of $ 35 per hour in fact the highest rate paid to welders in this state. This means that the OSTatum welders in the state do not make this rate less paid. In this case, the average amount made by the welder in the state would be lower than the rate determined as the predominant wage.

For this reason, many critics of the predominant wage laws complain that this practice leads to wasteful expenditures for public projects that increase the costs of these projects. This can lead to budget deficiencies, higher taxes and less public projects. In addition, some also see the predominant wage laws as a way to secure the union of trade unions, whose workers usually control the highest rates, and could therefore have a competitive advantage in obtaining these public contracts on companies with unionized workers who are less doing.