In a
That is where prevailing wage laws come into play. Prevailing wage laws are local minimum wages for state-contracted service and construction workers based on payroll records in that area.
“We found that prevailing wage laws improve the chances that a blue-collar worker will be in the middle-class and have a degree of economic security,” says Frank Manzo IV, the executive director of the Illinois Economic Policy Institute and co-author of the study. “Essentially, prevailing wage laws can ensure that folks can actually afford to live in the communities where they're doing the work.”
Read more:
In fact, these laws boosted annual incomes for custodians by as much as 9.5%, with those in states without prevailing wage laws making an estimated $24,791 and those in states with prevailing wage laws making around $30,000. States with prevailing wage laws also saw as high as a 3.5% increase in health insurance coverage for custodians as well as an up to 5% increase in custodians who were employed full-time, pointing to improved job stability overall. So, it should come as no surprise that 2.3% fewer custodians live in poverty in states with prevailing wage laws.
However, including Illinois, only eight states have prevailing wage laws that cover state or utility contracts for service workers. Manzo notes that construction workers are more widely covered, with 27 states having prevailing wage laws for state-funded construction projects, but he hopes more research surrounding service work and prevailing wages laws can turn the tides.
“Non-construction service jobs have been understudied and underappreciated,” says Manzo. “But it’s custodians who have been essential to cleaning and disinfecting our buildings, while also facing the high workplace risks in the pandemic — these are workers who are disproportionately people of color and are among the lowest-paid workers.”
Robert Bruno, a professor at the school of labor and employment relations at the University of Illinois Urbana-Champaign and co-author of the study, points to the fact that workers of color are 34% more likely to be custodians than white workers, meaning prevailing wage laws will have the biggest impact Black and Latinx workers. For example, Manzo and Bruno found that Black custodians saw a nearly $9,000 increase in income if they worked in a state with prevailing wage laws. Meanwhile, white, non-Hispanic custodians saw about a $5,000 difference.
Read more:
“A prevailing wage law holds up the standards within a community and protects that standard, but it can also raise that floor,” says Bruno. “In particularly tight labor markets like this one, you will pay workers more than the floor, and raise the quality of working in that industry.”
In other words, prevailing wage laws can increase pay for custodians across the country, regardless of whether they are working under a state contractor for a private employer, since all employers will have to raise their pay and benefits to remain competitive. That is why Manzo and Bruno believe prevailing wage law could partly solve today’s labor shortage — better pay and benefits mean more people will be motivated to work in service-based industries.
“We often do not appreciate that the janitors are keeping schools open, and we have the tendency to mistakenly treat this work as unskilled, yet it’s essential work,” Bruno says. “These prevailing wage laws are historically grounded in the idea that people should get the greatest return on investment on their tax dollars and should, at a minimum, support middle-class standards.”
Read more:
Established in 1931 in an attempt to fight the Great Depression, the Davis–Bacon Act of 1931 required laborers and mechanics to be paid at least the local prevailing wage on public works projects. The McNamara–O'Hara Service Contract Act, enacted in 1965, extended this policy to service workers under federal contractors. Essentially, these laws were to help guarantee that not only were workers being paid living wages, but the construction of bridges or the cleanliness of local, public schools would be dealt with by skilled, productive workers, who are incentivized to stay and excel at their work with competitive compensation and benefits.
“Instead of having employers compete to pay the lowest amount they can get away with and exploiting workers, particularly undocumented workers, prevailing wages incentivizes competition based on quality and productivity,” says Manzo. “That’s why prevailing wage laws can improve retention rates and reduce government assistance costs borne by taxpayers.”
If service workers are paid more and provided with better benefits, namely affordable health insurance, there will be less dependence on social programs like Medicaid and food assistance. If workers are paid more and provided with better benefits, they have more reason to stay with their current employer. For Manzo and Bruno, the U.S. public and service workers have a lot to gain from prevailing wage laws — and from government and private employers alike raising their standards of compensation.
“If you pay the lowest wages possible, you will lose your workers,” says Manzo. “It might work in the short-term, but ultimately, it is expensive to pay low wages.”
