Tennessee Ends Prevailing Wage Protection For Building Projects

Credit: Tracy Hunter via Flickr

Starting January 1st, most government building projects in Tennessee won’t have to pay workers a prevailing wage anymore. The longstanding protection was lifted this year, despite warnings that it could mean a 10 to 15 percent pay cut for the state’s laborers.

In place for nearly four decades, the idea behind the prevailing wage law was to make sure every electrician or plumber hired on a government-funded project got paid the going rate.

Senator Jack Johnson sponsored the law’s repeal, arguing that it stifled competition among contractors bidding for government jobs, made building projects too expensive, and just wasn’t necessary.

“In the private sector we don’t have a prevailing wage in Tennessee, we have a minimum wage. And the private sector seems to do quite well.”

The prevailing wage still has to be paid on highway projects—if it wasn’t, the federal government would withhold its highway funds. With the change, local governments can still choose to have contractors to pay a wage that’s roughly average, but that’s the limit of what an agency can require, and they don’t have to call for even that.

The repeal moves in the opposite direction from an effort by Metro Council members. In a recent letter to Mayor Karl Dean, more than half the council insisted that before building the new downtown baseball stadium, he should take steps to make sure wage and employment protections for construction workers are beefed up, and that most of the work is done by local residents.