In government contracting, a prevailing wage
is defined as the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers, and mechanics within a particular area. Prevailing wages are established by regulatory agencies for each trade and occupation
employed in the performance of public work, as well as by State Departments of Labor or their equivalents.
"Prevailing wages" were first established shortly after the Civil War when Congress passed the National Eight Hour Day law. Although the Congress had not yet established its authority to regulate private economic matters because of prevailing legal doctrines, it could regulate its own contracts and the targeted public works
as a means to indirectly influence other labor markets. Because construction workers at the time were paid on a daily rather than hourly basis, the establishment
of an eight hour day without a reduction of the daily wage rate formally incentivized public works contractors to improve the efficiency and productivity
of their workforce rather than the length of their day in order to complete their projects on time.
In 1891 Kansas was the first state to pass a "prevailing wage" for its own public works projects, and over the next thirty years was followed by seven other states (New York 1894, Oklahoma 1909, Idaho 1911, Arizona 1912, New Jersey
1913, Massachusetts 1914, and Nebraska 1923) in establishing minimum labor standards
for public works construction. In the midst of the Great Depression
, beginning in 1931 and prior to the end of World War II, twenty additional states passed their own prevailing wage laws. In 1931 Congress passed the Davis Bacon Act after 14 earlier attempts, the Federal Prevailing Wage law that remains in force, bar a few suspensions, to this day.