New action combines two pillars of Bidenomics by ensuring that infrastructure investments in America lead to good-paying, family-sustaining jobs.
Today, Vice President Kamala Harris is announcing that the Labor Department (DOL) will publish a rule that advances the Administration’s economic vision to build the economy from the bottom up and middle out – not the top down – by ensuring investments in America lead to jobs where construction workers are paid fairly, including the 84% of who don’t have a college degree. The rule, which advances President Biden’s Executive Order 14008, will mean thousands of extra dollars per year in workers’ pockets to help put a down payment on a home, save for retirement, or simply have more breathing room.
Vice President Harris, Chair of the White House Task Force on Worker Organizing and Empowerment, is making the announcement in Philadelphia, Pennsylvania alongside Acting Secretary of Labor Julie Su.
The rule will raise wage standards of construction workers by updating prevailing wage regulations issued under the Davis-Bacon and Related Acts, which require payment of locally prevailing wages and fringe benefits to more than one million construction workers delivering $200 billion of federally funded or assisted construction projects. These numbers will continue to grow given that nearly all of the significant construction programs contained in President Biden’s Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act require or strongly incentivize the use of Davis-Bacon prevailing wages.
The Davis-Bacon prevailing wage regulations have not been comprehensively updated in more than 40 years, leaving many workers paid less than intended by the Act – and less than they deserve. In light of the new jobs created by these once-in-a generation infrastructure investments, DOL’s new rules are more important than ever to ensure fair wages for workers. In addition to ensuring good jobs for construction workers, the new rule will help attract the workforce needed to produce quality projects funded by the historic legislation and will protect existing wage standards in local communities.
Specifically, DOL’s new rule to update Davis-Bacon prevailing wage regulations:
• Restores the DOL’s definition of “prevailing wage” used for nearly 50 years before it was upended by the Reagan administration. It will make the prevailing wage equivalent to the wage paid to at least 30% of workers, rather than 50% of workers, in a given trade in a locality. Prior to the new rule, if the majority of workers in a given trade and locality did not earn a single wage rate, then the prevailing wage was determined by the average wage in a given trade in a locality.
This average can pull down the prevailing wage if some employers pay very little. Setting the prevailing wage to the wage paid to at least 30% of workers makes it more likely that workers are paid a true prevailing wage.
• Makes it easier keep prevailing wages up to date – allowing them to keep up with wage growth. DOL must currently periodically survey contractors and other parties to update prevailing wage rates, which is resource intensive. The final rule makes this process easier by giving DOL’s Wage and Hour Administrator the express authority to adopt prevailing wages determined by state and local governments, issue wage determinations for labor classifications where insufficient data was received through the wage survey process, and update outdated wage rates.
• Strengthens DOL enforcement. The rule will add a new anti-retaliation provision in contract clauses to protect workers who raise concerns from being fired or punished. It also strengthens DOL’s ability to withhold money from a contractor in order to pay employees their lost wages.
DOL is announcing this rule as inflation has fallen by two-thirds over the last year, and independent analysts have credited infrastructure investments with keeping our economy strong during that period. Since last year, inflation-adjusted wages are up 1.6% for all production and nonsupervisory workers (the 80% of workers who are not managers), 2.4% for construction nonsupervisory workers, and 2.0% for workers without a college degree. This rule keeps up that momentum by continuing to invest in America’s workers.