[Excerpt] Worker compensation varies significantly in the United States and worldwide. These differences arise from multiple, intersecting factors, including a worker’s occupation, industry, geographic location, education, work experience, gender, and race-ethnicity, among others.

Differences in wages and compensation are one of the primary sources of economic inequality. Two mechanisms to combat this inequality and promote fairer wage distribution include collective bargaining by trade unions for their members and government intervention in the labor market.

The minimum wage is the most well-known way the government intervenes in the labor market to influence wage distribution. However, an alternative wage policy has been used in the construction industry since the late 19th century: the prevailing wage.