It was labor legislation that President Herbert Hoover, in the middle of the Great Depression, thought was urgently needed.
Signed into law by the President in March of 1931, the Davis-Bacon Act required contractors to pay prevailing wages to construction workers on all federal public work projects.
That legislation gained support during a time of economic upheaval when labor unions claimed that workers often lost jobs to other workers who were willing to take on jobs for lower wages.
In the decades since its original passage, the Davis-Bacon Act has only been suspended a handful of times: In 1971, President Richard Nixon did away with the act for a month as a means of battling inflation; George W. Bush briefly suspended the legislation for federal workers taking on rebuilding projects in the Gulf states after Hurricane Katrina.
Now a report just issued by the Beacon Hill Institute for Policy Research in Medway, Massachusetts, is claiming that the Davis-Bacon Act increases the average cost of a given federal construction project by at least 7.2%.
In the report, titled The Federal Davis-Bacon Act: Mismeasuring the Prevailing Wage, the authors say the means used to calculate prevailing wage standards has proven to be arcane, “calculating a wage that is biased toward requiring union-scale wages instead of an average of even true prevailing wage.”
Two months ago, the Department of Labor issued a proposed rule updating the Davis-Bacon Act and strengthening its enforcement. The new proposal also calls for protecting employees who may have raised concerns with the Labor Department regarding a contractor’s payment practices or other employment matters.
In a statement, the AFL-CIO said that the new rules will “modernize and strengthen prevailing wage laws to protect thousands of workers on federal projects from rampant wage theft.”
An opposing viewpoint has been issued by the Associated Builders and Contractors, criticizing the proposed changes to both the Davis-Bacon Act, as well as the original legislation itself.
“For decades, small businesses in the construction industry have complained about the regulatory burdens and lack of clarity caused by dysfunctional Davis-Bacon Act regulations,” said the ABC statement, adding that an outright repeal of the legislation would save taxpayers at least $217 billion in the next decade.
A public comment period on the proposed changes to the Davis-Bacon Act has just expired. The final determination regarding the proposed Davis Bacon Act changes by the Labor Department is expected to be announced later this year.
By Garry Boulard
