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Hard work, education under way to make prevailing wage prevail

Date Posted: March 5 2004

In some counties, on federally funded building projects, the prevailing wage and benefit package for construction workers in various trades is $7.50 to $8 per hour.

You would figure those counties are somewhere in Mississippi, Alabama or elsewhere in the nonunion South or West. You would be wrong.

“Believe it or not, we’ve got counties in Michigan where $7.50 an hour is the prevailing wage,” said Don Mustonen, a program manager with CSAT, the union-backed Construction Survey Action Team. “You look at those numbers, and you see why it’s important that we get all the input we can in order to get this survey right.”

The survey referenced by Mustonen is the largest prevailing wage review ever conducted here in Michigan by the U.S. Department of Labor. The DOL has performed prevailing wage surveys in the past, but they have been limited in scope, have not been updated, and often don’t accurately reflect what today’s building trades workers earn.

In 2002, the DOL announced its intention to perform a survey in order to update prevailing wage numbers in Michigan and other states. In January 2003, a statewide coalition of unions and their contractors got together with DOL reps in order to learn what the Labor Department needed to get better survey results, and to talk about what’s was needed to be done to increase contractor participation in the survey.

What resulted over the last year is the hiring of 12 full-time CSAT staffers to process paperwork and promote the program. They have mailed more than 8,000 forms to union contractors around the state, requesting wage information for various building trades crafts for construction projects performed in 2003. Business agents have also approached contractors about filling out the forms.

“The first response that we got from the contractors was poor,” said Mustonen, who is also a program coordinator for the Operating Engineers Local 324 Labor-Management Education Committee. “Everybody is busy, and this is not a mandatory thing. But it’s been my experience that once we explain to contractors why we need the information, they usually do it.”

Union contractors who choose not to participate are shooting themselves in the foot. On federally funded road and university projects, if an old prevailing wage rate is in place as the basis for bids, then nonunion contractors get an immediate advantage because they can pay their workers less. And the gap will widen through the years as union pay and benefit packages increase, but the prevailing wage remains the same.

Mustonen said a second round of mailings to contractors recently went out, and it’s too soon to tell what the response will be.

The goal is to get as many forms as possible filled out and signed by contractors, with May as the cutoff date. Mustonen said CSAT improved on the federal forms to make them more user-friendly for contractors. After the contractors fill out wage information for the forms, the information is punched into a computer program in a format desired by the DOL.

Beyond the wage rates for the various job classifications, Wage Survey Form WD-10 requires contractors to provide the number of employees for a given project, the number of days they worked on the project, and breakdowns of health and welfare, pension and fringe benefits payments.

“We’re trying to make things as easy as possible for the Labor Department,” Mustonen said. He said at the rate the process is going on here and in other states, and with cuts in federal funding, “Michigan will be lucky” if another survey is taken eight years from now. As it stands, it may take up to two years from now for the prevailing wages that were collected from 2003 to be published and put into place.

The Davis-Bacon Prevailing Wage Act was enacted by Congress in 1931. According to the lawmakers who wrote the bill, Robert Bacon and James Davis, the law was enacted so that the federal government could protect itself from “fly-by-night” and cutthroat contractors who performed shoddy work and exploited low-skilled and “imported” workers.

Today, prevailing wage laws continue to protect against fly-by-night contractors who underpay their workers at the expense of local workers who have a stake in doing the job right. Now, aside from basic collective bargaining agreements, there is no other issue that will have as much of an impact on unionized construction workers’ incomes than this prevailing wage survey.

The example of a $7.50-per hour wage is extreme in Michigan, but there are numerous examples in counties around the state where the prevailing wage on federally funded projects is at least 10 or 20 percent – or more – below the local union wage scale.

“Those numbers are embarrassing, they’re frightening,” said Mike Crawford, executive director of the National Electrical Contractors Association, Michigan Chapter. “How can you support a family and pay health insurance with those kinds of wages? That’s why we have to support this effort.

“We go through all this effort to support prevailing wage in the legislative and judicial arenas, and it would be self-defeating not to support the prevailing wage survey.”

The goals for unions is to make prevailing wage the union wage. And in order to make union wage scales “prevail,” at least 51 percent of contractors in a jurisdiction who submit wage information to the DOL must pay the union scale.

Furthermore, if the collectively bargained pay and benefit rate is made the prevailing rate in a jurisdiction, then escalators aligned with union pay and benefit scale increases are built into the prevailing rate, which means the rates are automatically adjusted upward every year.