Davis Bacon Act

DAVID BACON ACT TEXT

The Davis-Bacon Act was a wage bill that encouraged the hiring of local workers for public construction projects and ensured fair wages were paid to those workers. It has since been accused of inflating the wages of workers or unfairly excluding non-union workers from federal projects. Proponents have trumped its ability to keep wages concurrent with the local labor markets and its restrictions on driving local construction companies out of business with unfairly low wages.

History

Senator James Davis of Pennsylvania and Representative Robert Bacon of New York introduced the Davis-Bacon Act at the start of the Great Depression after observing the use of cheap African American labor from the South to build public works projects in the North. Rep. Bacon’s motivations for introducing the bill were the use of said workers on the building of a Veteran’s hospital in his district. Backers of the bill wanted local construction projects, the efforts of lobbying on their part to be built with local labor, so as to provide an added benefit to the community where the public works project is being built.

What is the terminology associated with the Davis-Bacon Act?

Prevailing wage - this is the hours wage paid to workers on public works construction. The purpose of a prevailing wage is to keep wages stable rather than overplaying the public works construction workers and destroying the local industry. The root of prevailing wages are in the federally mandated 8 hour workday that not only incentivized the expedited completion of public works projects but switched typical payment from daily wages to hourly wages. Hourly wages within an 8 hour constraint meant greater efficiency for workers rather than previous indefinite work periods.

Fringe benefits - non salary benefits derived from employment. This was subject to calculation into the prevailing wave in 1964.

Public works - these are project financed by the government for the enjoyment of the community at large. This may include bridges, dams, hospitals and schools.

Little Davis-Bacon laws - these are state laws in the same model at the Davis-Bacon Act that encourage the hiring of local workers for government projects and the training of young workers in useful skills.

How has the Davis-Bacon Act been amended?

In 1935, the act was amended to improve contract bidding procedures banning private contractors from slashing employee wages to make a lower, more attractive bid for the project.

Fringe benefits, such as employee health insurance became subject to the prevailing wage calculation in 1964.

In 1982, the prevailing wage, by order of the Department of Labor became the same wage paid to union workers in the area.

In 1994, the construction of facilities for the Department of Health and Human Services’ Head Start program was covered in the Act via amendment.

What are arguments in support of maintaining the Davis-Bacon Act?

Proponents of the Davis-Bacon Act claim that this legislation is key to preventing a destruction of a local labor market by government projects. An employer hiring workers for cheaper than the norm for the area does not give the locals the benefit of competing for projects that would benefit their community. The payment of prevailing wages prevent a spiraling decline of wages that would have otherwise forced local workers to work for cheaper without regards to the local standard of living or value of their labor.

What are the criticisms of the Davis-Bacon Act?

Due to the semi-racist nature around the initial passing of the law, some critics have argued that the Davis-Bacon act is a Jim Crow law that prevents equal access to federal construction work. This claim was made unsuccessfully in the case of Brazier Construction vs. Elaine Chao, Secretary of the Department of Labor. In that case, Judge William B. Bryant ruled that the intention of the law was to provide employment for all local employees to compete and benefit from local public works projects. Although the original law may have been used to discourage the use of African American labor, its usage has since extended to benefit all Americans.

Richard Nixon claimed in 1971 that mandating certain wages for construction would slow construction down and that wages were growing too quickly for construction workers when compared to factory workers. As a result, he formed a committee of twelve to discuss compensation for workers and wage determination in order to stave off wage and price inflation caused by the fixing of prices.

Modern critics view the Davis-Bacon Act as a violation of “economic liberty” and a “super minimum wage” that prices non-union workers out of construction projects. Additionally provisions that mandate what the workers must be paid do not take experience and skill level into consideration, greatly inflating some less than skilled workers that are paid at a much higher rate due to this law. Additionally the claim has been made that the government overpays on federal construction projects by about $1 billion due to provisions that have it paying the prevailing wage to workers.

Lastly, critics claim that this act remains discriminatory to minority workers as minorities are disproportionally represented in the unskilled labor market, which does not get hired under the Davis-Bacon and Department of Labor guidelines for paying workers.

What are the sample wages of construction workers under the Davis-Bacon Act?

The Federal Government maintains a database of federal projects and the wages paid to those workers during that project. If we were to look at the construction of a building in Schuyler County in New York, we would see the following wages for professional workers:

• BOILERMAKER$ 30.65

• BRICKLAYER$ 27.00

• TILE FINISHER $ 24.30

• CARPENTER$24.06

We would also see these wages for less skilled workers:

§ ASPHALT SHOVELER $20.89

§ PIPELAYER$21.06

§ AUGER$21.19

§ PAVER $23.59

§ TRUCK DRIVER $ 16.00

You may visit this resource at www.wdol.gov to gain an understanding of the value of construction labor in any municipality or county.

When has the Davis Barton Act been suspended?

The Davis-Barton Act has been suspended by US Presidents four times, often to make adjustments or to expedite disaster relief.

(1934) - President Roosevelt suspends the Act for three weeks as part of New Deal related administrative adjustments

(1971) - President Nixon suspends the Act for 28 days as part of efforts to reduce inflation. This provoked outrage from the Secretary of Labor, which led to the reinstatement of the Act and the establishment of a Construction Industry Stabilization Committee.

(1992) - President H.W. Bush suspended the Act in September 1992 as part of Hurricane Andrew recovery efforts. President Bill Clinton reinstated the Act the following year in March

(2005) - President Bush issues a proclamation to suspend the Davis-Bacon Act in the Gulf Coast states as part of Hurricane Katrina relief efforts citing a situation of national emergency. The suspension was lifted shortly after due to bipartisan pressure to restore the prevailing wage.