Overview
The federal Davis-Bacon Act is a Depression-era wage subsidy law enacted in 1931 whose time has run out. In a 21st century global economy, it is essential to allow the free market system to determine wages.
The act mandates that a regional “prevailing wage” be paid on public projects. The inefficient wage survey process used by the Department of Labor to calculate Davis-Bacon wages often results in union wages being deemed “prevailing” even though less than 20 percent of the construction industry is unionized. As a result, Davis-Bacon frequently mandates union wages and requires contractors to use outdated and inefficient union job classifications, which ignore the productive work practices successfully used by merit shop contractors today. Consequently, Davis-Bacon inflates the cost of public construction projects 5 percent to 38 percent above what the project would have cost if competitively bid in the private sector, wasting valuable tax dollars.
Additionally, studies have found Davis-Bacon requirements have a negative impact on minority work opportunities, such as reducing the number of minority workers in the construction industry. According to the Black Chamber of Commerce, the complexities and inefficiencies of the Davis-Bacon Act discourage many qualified small and minority-owned businesses from bidding on public projects. As a result, few minority firms win Davis-Bacon contracts, and many others give up trying.
ABC will continue to work in the 111th Congress to prevent any expansion of the Davis-Bacon Act.
Helpers
Helpers are semi-skilled workers who assist trained journey-level workers on construction projects. Merit shop contractors widely use helpers in private sector construction. Helpers gain well-paying entry-level jobs and valuable work experience under the direct supervision of more skilled workers.
Unfortunately, helpers are prevented from working on federal construction projects because the Department of Labor has not recognized them as a “prevailing work practice” under the Davis-Bacon Act. In January 2001, the Clinton administration finalized helper regulations, which exclude helpers from federally funded projects by using an outdated definition and assuming that helpers are not a prevailing practice. As a result, there is no Davis-Bacon wage rate for helpers’ jobs, and these entry-level workers are shut out of public work opportunities.
ABC believes there is no justification for preventing the use of helpers. It eliminates training-level jobs and is costly to the government.
School Construction
ABC believes that improving education and providing quality school facilities is critical.
The best way to maximize education dollars and improve the education system is through increasing local control, flexibility and decision-making. ABC believes school construction is best handled at the local level, and opposes initiatives that restrict local control and inflate costs by adding federal mandates, such as Davis-Bacon requirements.
ABC will work closely with House and Senate leadership to ensure that school construction continues to be a state and local issue, and that federal inefficiencies, such as the Davis-Bacon Act, are not imposed on funds designated for school construction.