The Prevailing Wage Question

When Paul Zimmerman, the executive director of Southern California Association of Non-Profit Housing (SCANPH), urges his members to pay the state's prevailing wage to workers building homes for low-income families, it doesn't always go over very well. His members were especially frustrated in 2001 after the California state legislature enacted a law that made affordable housing projects subject to the higher wage rate. "I tell people that I understand it makes it more difficult to do your project, but we can't ethically say that we are a social change organization, and not pay a decent wage," he says.

The first prevailing wage law, the federal Davis-Bacon Act, passed in 1931. It is commonly thought to be a New Deal effort to protect union construction workers, but its original intent was to prevent African-American workers from getting construction jobs. During the Great Depression, President Franklin Roosevelt added regulations to stop contractors from reducing wages to compete for the "lowest bid" requirements of federal public works projects. President Ronald Reagan weakened these regulations in 1983, but the law itself has remained despite conservative efforts to either repeal or gut it. Thirty-two states and many large cities have similar rules, which have greatly benefited unionized construction.

But as they struggle to create affordable housing for families with low incomes, nonprofit developers don't all agree that they should pay prevailing wages for its construction. Still, most developers on each side of the debate believe their stance reflects a commitment to social justice.

Thanks to David Holtzman