In a unanimous vote, the City Council in Richmond, Va., passed an ordinance establishing a prevailing wage for publicly funded construction projects, giving a boost to workers and a win for the IBEW and other building trades.
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| local 666 members before attending a town council meeting on establishing a prevailing wage. clockwise from bottom left: griffin green, cullen gaston, leo herbert and chris anders. |
"This law will help stop the race to the bottom for construction wages and benefits for city work," said Charles Skelly, business manager of Richmond Local 666 and president of the Richmond Building and Construction Trades Council. "Virginia has been plagued by misclassification and wage theft in construction. This law will help combat the issue and ensure construction workers are paid a fair wage for their work."
The ordinance, which passed in October, came about in part because of a state law that requires a prevailing wage on state-funded construction projects. That law was amended in 2020 to allow cities to opt in to the requirement that contractors pay a wage that at minimum aligns with the area's pay scale.
Under the new law, which goes into effect July 1, contractors or subcontractors that pay workers below the prevailing wage will be held liable for the payment of wages plus interest. They will also be disqualified from bidding on contracts until full restitution is made and could even be charged with a Class I misdemeanor. The ordinance will apply to city-funded projects valued at more than $250,000.
By eliminating incentives for unscrupulous contractors to lowball construction costs, a prevailing wage establishes a level playing field that allows legitimate contractors like IBEW signatories to be competitive and win more work.
"The contractors I work with have all said that this is great for them because everyone has to pay a fair wage rate," said Local 666 journeyman wireman Griffin Green, who spoke in favor of the ordinance at council meetings.
Creating more opportunities for local contractors to get more work also means more money stays in the community, along with more high-paying jobs for workers who live in the area.
"Since we're close to Washington, D.C., which has a higher wage scale, you can drive like one hour and get paid more," Green said. "Prevailing wage incentivizes workers to stay in town by encouraging contractors to pay enough to keep them here."
A state study in 2012 found that misclassifying workers cuts 30% off the labor rate by illegally eliminating required payments for workers' compensation and other costs like unemployment insurance, Skelly said.
"No legitimate contractor can compete," he said. "It takes protections away from the workers and undercuts contractors who play by the rules and want to pay a fair wage."
Thanks to the state law, there are several ongoing state-funded projects with prevailing wage attached, Skelly said, so it stands to reason that IBEW signatories will win more Richmond projects after the ordinance takes effect.
"We are getting more of those state projects than we did historically," Skelly said. "This means more opportunities for all of our members."
Prevailing wage requirements not only raise wages but increase opportunities for apprentices. A study of prevailing wage at the state level found that construction apprenticeship enrollments are up to 8% higher and apprentices complete their on-the-job and classroom training faster in states that have such laws.
The study, conducted by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois, further found that jobsites in states with prevailing wages are safer. According to the findings, on-the-job fatality rates were 14% higher in states that had repealed their laws.
The ordinance passed unanimously thanks in part to lobbying by the IBEW and other building trades and campaigning for worker-friendly politicians. Skelly said the building trades started making a concerted effort to endorse candidates and help get them into local offices around 2019. It's paid off.
"It's been an incredible change to have the council seeking out union opinions and looking to labor for how to build the city," said Local 666 apprentice Chris Anders, who also spoke in support of the ordinance. "If you want Richmond to grow, this is how you do it."