The Davis Bacon Act

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The Davis Bacon Act

• By Gregory D. Callahan

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What is the Davis Bacon Act

• Enacted in 1931, the law states that contractors
  for federal projects must pay their workers no
  less than the wage rates prevailing in the local
  area for each craft, as determined by the U. S.
  Department of Labor.

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Creation of the Davis Bacon Act

• Depression In 1931 this country was in the
  midst of the devastating depression. Workers
  before depression were paid 4 a day. During
  depression paid 2 a day, when work was available
• Unions Just starting to become powerful, with
  many members in several trades, and political
  support.

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Creation of the Davis Bacon Act.

• Veterans Bureau Hospital, Long Island, NY(1931)
  Contractor from Alabama won bid to build
  hospital, by using cheap laborers from the South,
  most of whom were African American.
• Congressman James J. Bacon of New York was
  enraged that workers from outside his district
  were taking jobs from his local workers. Union
  influence on politicians.

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Creation of the Davis Bacon Act

• Congressman Bacon" A practice has been growing up
  in carrying out the building program where
  certain itinerant, cheap bootleg labor, have been
  going around throughout the country picking off
  a contact here and a contract there, and local
  labor and local contractors have been standing on
  the side lines looking in. Bitterness has been
  caused in many communities because of this
  situation. This bill, my friends, is simply to
  give local labor and the local contactor a fair
  opportunity to participate in this building
  program.

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Creation of the Davis Bacon Act

• President Hoover, Congress desperate to jumpstart
  the economy so passed bill 1931
• First prevailing wage bill for non government
  employees
• Significant, because of all the federal projects
  that were constructed as part of the new deal
  post offices, bridges, parks, etc.

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Prevailing wage

• One of the most debated and aspects of the bill
  is the prevailing wage in our present time it
  has come to be understood as union wages , but
  that is not actually true. The Prevailing wage is
  determined by the Department of Labor. The
  Department of Labor states that prevailing wages
  is the rate of wages and fringe benefits paid to
  majority (more than 50) of workers in the
  classification on similar construction jobs in
  the area , or where there is no majority , the
  average rate paid .

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Proponents

• Unions support the act because of the tremendous
  amount of indirect benefits to the unions.
  Prevailing wages eliminate the economic penalties
  put upon firms when they do unionize their
  workforce. This makes the unionized firms more
  competitive in bidding for government work. And
  therefore lower employer resistance to
  unionization to increased collectively bargained
  wage rates

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Oppenents

• Contractors, ABC, etc. say that Act is
  responsible for over 5 billion in over costs
  every year.
• Civil Rights Advocates argue that the act is
  racially biased because it favors the
  predominantly white unions and is prejudice
  against minority contractors.

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Davis Bacon Act in Current EventsThe Homeland
Security

• In August 2002 the Senate Government Affairs
  Committee approved legislation by Sen. Joe
  Lieberman (D-Conn.) that would expand the
  Davis-Bacon Act to apply to all projects financed
  in whole or in part by the Department of Homeland
  Security.
• Homeland Security Department voted Sept. 19, 2002
  to continue debate and blocked a vote on the
  legislation.