One of the smartest things President Bush did to reduce recovery costs in the aftermath of Hurricanes Katrina and Rita was to suspend Davis-Bacon Act rules in the hardest hit states. But Congress is frantically trying to overrule the president, which would add billions of dollars to the already staggering recovery costs.
Davis-Bacon, a relic of the early 1930s, sets minimum wage levels and other labor rules on federally funded construction projects. And because it mandates that a union-comparable wage be paid to every worker on such projects, the law unnecessarily increases the burden on taxpayers who pay for these projects. It’s long been a target of fiscal watchdogs, but persists at the insistence of big labor and big spenders.
In a bid to reduce recovery costs and reduce the regulatory burdens facing contractors cleaning up after the hurricanes, Bush on Sept. 8 ordered the law be suspended for federal projects in a five-state impact area. We wish he would go further and push to do away with Davis-Bacon altogether. But a full scale drive is on in Washington to override the president’s decision, led by labor unions, Democrats and political leaders from the Gulf states. Unless it is turned back, the already staggering costs of recovery will likely grow considerably.
The restore Davis-Bacon Act effort kicked off Monday, with Michigan Sen. Carl Levin, a predictable mouthpiece for big labor, claiming the administration was “trying to take advantage of a natural disaster” to avoid paying a “prevailing wage” to disaster recovery workers. Chiming in were Louisiana Sen. Mary Landrieu and Senate Minority Leader Harry Reid of Nevada, both Democrats. At least 204 members of the House have signed onto a bill by Rep. George Miller, D-Calif., aimed at overruling the president and reinstating the law.
Miller has called the president “immoral” for suspending the rules. We define morality differently than Miller, however. Is it moral to ask taxpayers already facing an estimated $200 billion in rebuilding costs to pay higher-than-necessary wages just to line the pockets of a key Democratic Party constituency group? In this case, we think morality calls for minimizing the rebuilding costs and the burden on taxpayers as much as possible.
Davis-Bacon was designed to insulate big labor from the impacts as wages plummeted during the Depression, even while the federal government was embarking on a New Deal building boom. The rules had another effect popular with Jim Crow types: They kept blacks and immigrants off these work sites. The bill also foolishly gave contractors the power to decide for themselves how to define “prevailing wage,” leaving government agencies little leverage in trying to reduce labor costs.
Not only does the act drive up construction costs and add paperwork burdens on contractors, but it prohibits anyone on a job site from earning less than the prevailing wage, even if they are unskilled, entry-level workers. It also bars contractors from using a worker cross-trained as an electrician and a carpenter from performing both functions, compartmentalizing and bloating the workforce.
This is a free country. No one is dragged off the street and forced to work on a federal construction project. The high demand for skilled workers in the Gulf region will ensure that opportunities are plentiful and wages competitive. If workers aren’t being paid equitably, they have the option to go elsewhere.
Setting a high Davis-Bacon-mandated minimum wage will actually limit the opportunities for entry-level workers hoping for a chance to pick up the skills that will earn them higher wages in the future. And if this is truly a national emergency, big labor and the big spenders just might have to give up their front row seat at the federal trough.
We urge every member of New Mexico’s and Texas’ congressional delegation to oppose any effort to reverse the president’s prudent — and, yes, moral — decision to suspend Davis-Bacon. And if anything, they should be pushing for its permanent repeal.