By Jarrett Renshaw

PHILADELPHIA (Reuters) - The Biden administration moved on Tuesday to boost wages and worker protections on federally funded construction projects, drawing the ire of trade groups that warn the union-friendly changes could curtail investment.

Vice President Kamala Harris celebrated the new labor reforms at a Philadelphia union hall, calling the administration unapologetically pro-union.

"When union wages go up, everyone's wages go up. When unions are strong, America is strong," she said, adding that the policies would give workers a "raise."

The trip marks the latest in a string of visits by U.S. President Joe Biden and his administration to the electoral battleground state of Pennsylvania to court unions, a core constituency of his Democratic Party even as many rank-and-file members favor Republicans.

By making changes to a 1930s law, the Labor Department seeks to boost wages and protections as the federal government spends billions of dollars on new roads and bridges, and expanding industries like computer chips and green energy.

The Davis-Bacon Act of 1931 tasks the government with establishing wage floors - known as prevailing wages - that apply to construction projects funded by the federal government. Today, it applies to more than one million construction workers on $200 billion of such projects, the administration said.

Biden ordered the review of the labor law early in his administration. It will become effective in roughly 60 days.

Trade groups have long criticized the prevailing wage requirements, saying they discourage small businesses from seeking federal contracts.

The rule changes the way prevailing wages are calculated, basing them on the average wages paid to at least 30% of local workers, instead of the 50% threshold set in 1983. That raises the wage the government can set because they can eliminate more lower-wage workers from the calculation.

The Labor Department must currently periodically survey contractors and other parties to update wage rates, but will now be able to adopt prevailing wages determined by local governments, issue wage determinations for jobs when data is lacking and update outdated wage rates.

The change will add a new anti-retaliation provision to protect workers who raise concerns and strengthens the government's ability to withhold money from a contractor in order to pay employees their lost wages.

"This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market," said Associated Builders and Contractors official Ben Brubeck.

Biden won 57% of union households nationwide in the 2020 election compared with 40% for Trump, according to Edison Research.