AWF Supports Davis Bacon Repeal Act
Rep. Peter King has introduced the Davis-Bacon Repeal Act (H.R. 2900 in the 111th Congress). If passed, this legislation would repeal the Depression-era wage subsidy law, which requires the federal government to pay the “prevailing wage” on federal projects costing over $2,000. Christopher Prandoni, Executive Director of the Alliance for Worker Freedom, has written a letter urging congressmen to support Rep. King's initiative:
"While paying federally contracted workers the “prevailing wage” in a region seems innocous and implicit, the Davis-Bacon law actually subverts its purported goal. No doubt the reason for skewed wage data, Davis-Bacon requires the Wage and Hour Division of the Department of Labor (WHD) to calculate a region’s prevailing wage. Unlike the Burean of Labor and Statistics, WHD relies on solicited responses from construction companies resulting in an incomplete dataset. Due to this flawed methodology, unionized companies and their inflated wages are overly represented resulting in inaccurate and inordinately high “prevailing wages.”
An audit by the Office of the Inspector General found that “one or more errors existed in 100 percent of the wage reports they reviewed.” Indeed, in practice, Davis-Bacon misrepresents regional wages causing the federal government to overpay workers by an average of 22 percent.
Repeal of the Davis-Bacon Act would end the federal government’s practice of wastefully overspending on construction projects. Estimates made by the Heritage Foundation found that repeal of this law would save the federal government $8.6 billion in construction costs and $100 million in administrative costs per year. It would also save the construction industry $190 million in compliance costs. Most importantly, repeal of the act would lead to the creation of 31,000 new construction jobs."