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Advocating for you on
Prevailing Wage

ABC regularly advocates for you and acts as a resource for members in complying with the federal and Minnesota prevailing wage laws.

On the federal level, our national office has opposed expansion of the Davis-Bacon law to new areas, and has filed comments and objections on various regulatory issues.  We work closely with Congressman John Kline (R-MN) who is chairman of the House Education & the Workforce Committee to reform and modernize the system. 

In Minnesota, we have consistently exposed the flaws of the prevailing wage system, and have been successful in advocating for key reforms like the adoption of a uniform set of job classification definitions.  We have also advocated for moving to a flexible work week (4 for 40), and changing the calculation to better reflect the majority of workers (average calculation, rather than a modal calculation).

Additionally, ABC regularly helps our members navigate the system, and adapt their policies and procedures to comply with the prevailing wage mandate. 

Schools and cities that are contemplating adoption of prevailing wage sometimes seek our advice on what impacts prevailing wage will have on their jobs (increases costs 7-10% and has major internal auditing costs).

Prevailing Wage

Prevailing Wage Hits Greater Minnesota Harder

For a long time, we have known that prevailing wage laws raise the cost of government funded projects. But the impact is especially strong outside of the Metro area.

A study published by the Minnesota Center for Fiscal Excellence in December 2014 has shown that the
prevailing wage rates in Greater Minnesota are far out of line with local wages. The study found that in over half the surveyed rates in Greater Minnesota, the prevailing wage rate was more than 20% higher than the average pay rate for similar workers.

It is simple. This system translates into higher costs for projects in Greater Minnesota. Even worse, by raising the required rate, metro contractors can be competitive on more jobs in Greater Minnesota. Without the prevailing wage requirement, their rates would be too high, and local contractors would win the bid.

We need to reform the prevailing wage calculation for Greater Minnesota, and promote local economic development.

* The study found that prevailing wage performs substantially different in rural and urban areas.
* Over half of Greater Minnesota prevailing wage rates were at least 20% above local average wage rates.
* 45% of prevailing wage are imported from other counties in Greater Minnesota, while only 10% of rates in the seven-county metro area are imported.
* Without inflated rates, Twin Cities contractors would not be competitive when working in rural areas. Raising the rates allows metro contractors to subvert economic development in Greater Minnesota.

We must also allow a four-day work schedule on prevailing wage jobs. Although not a focus of this study, a flexible work week is a benefit included in most union contracts on file with the Department of Labor and Industry. It is good for workers, families, and saves money.

If you have concerns about prevailing wage, please contact ABC for more information and real life examples of how prevailing wage works against local workers and taxpayers.