Each contractor has to report what they paid to each employee so that nobody is screwed. The idea was that the government didn’t want jobs to be done by cheap labor and they set a wage floor that corresponds to local union labor rates.
The wage difference can be quite drastic - floggers pay jumps from $15 Pernod to about $32 per hour where I live.
More info: https://en.wikipedia.org/wiki/Davis–Bacon_Act_of_1931
> The idea was that the government didn’t want jobs to be done by cheap labor
To be more specific, they didn't want the jobs to go to black workers.
Remember a bitch by a VC that tech workers weren't benefiting from the high wages he was paying so much as land lords.
That. Financialization and rent seeking in the US acts as a privately imposed tax on real economic activity. That shows in in things like why my company has moved every five years since the early 2000's. Our lease expires. The rent doubles and we move.
Want to fix this; prune back the finance and healthcare industries.
If the trickle down percentage is equal then the problem in the US is extractive labor unions; if US workers get a smaller percentage of the billing rate then the problem is extractive behavior by contractors. These problems require different solutions, so any attempts at cost control would need to determine which of these possibilities is in force.
US healthcare costs will also almost certainly feed into higher employee compensation for American workers. European employers will be paying into health care in some form or other (either through taxes or private insurance) but overall healthcare costs in Europe are far lower than in the US.