The Beginning of the End for Davis-Bacon?
By Kim Wooten On January 31, 2017 | Government Regulations
On January 24, 2017, U.S. Senator Jeff Flake (R-AZ) introduced a bill that may signal the beginning of the end for Davis-Bacon prevailing wage provisions. The Davis-Bacon Act, applicable on federal infrastructure projects, was passed during the depression as a stopgap measure to ensure that workers on qualifying federal government projects were paid wages that are in line with their local markets, or “prevailing wages.”
Critics of Davis-Bacon say that the United States Department of Labor (DOL) has never been able to develop an effective process for determining market-rate wages. Critics also have alleged that unions have been strong-arming DOL officials to artificially inflate wage rates through influencing DOL surveys on market wages. The Beacon Hill Institute, a conservative economic think tank, has stated that Davis-Bacon drove up labor costs by more than $2 billion in 2016 alone. The same Institute has alleged that Davis-Bacon has resulted in the federal government paying 22 percent above the market rate for labor on federal infrastructure projects. Proponents of the Bill also believe that the suspension will create tens of thousands of construction jobs.
By contrast, unions say that the bill would almost certainly result in harmful cuts to wages of American construction workers industry-wide at a rate of 50% or more. North America’s Building Trades Unions (NABTU), an alliance of 14 national and international unions in the building and construction industries, says that the bill will drive many construction blue-collar workers below the poverty line. NABTU also notes that contractor organizations like Associated Builders and Contractors (ABC) “are…at the forefront of efforts, and have previously been assisted by Senator Flake, to secure a drastic increase in the number of H2b foreign guest workers allowed to work annually in the U.S.” NABTU even resorted to a conspiracy theory approach, stating the Flake “worked as a co-conspirator with Democratic Senator Barbara Mikulski” to “drive down prevailing wages that would govern guest worker labor.”
The Bill has been named the “Transportation Investment Recalibration to Equality (TIRE) Act.” TIRE would suspend Davis-Bacon’s prevailing wage provisions on all federal highway construction projects. It is unclear at this point how long the suspension would be in effect. However, the Trump administration has indicated that it plans to initiate the largest infrastructure program in recent history, so the suspension would presumably remain in effect throughout that program.
TIRE would not be the first vehicle by which Davis-Bacon wage regulations have been suspended. In the aftermath of Hurricane Katrina, the Bush administration suspended Davis-Bacon for cleanup construction efforts for a period of two months.
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