Repeal of the Davis-Bacon Act Wage Provisions

Priority Issue Briefs
Repeal of the Davis-Bacon Act Wage Provisions

The Davis-Bacon Act of 1931 was initially introduced in 1927. It is named after James Davis, a Senator from Pennsylvania and a former Secretary of Labor under three presidents, and Representative Robert L. Bacon of Long Island, New York.

The legislation was introduced after a contractor in New York employed African-American workers from Alabama instead of local union workers to build a Veteranís Bureau hospital in Baconís district. The legislative history of Davis-Bacon reflects a desire by Congress to reserve jobs on federal projects for local, union workers, at the expense of other workers.

Today, the Davis-Bacon Act covers a significant portion of the projects undertaken by the construction industry. Approximately 20 percent of all construction projects in the U.S. are covered by the Act.

Requirements of the Law
The Davis-Bacon Act requires that all federal government construction contracts and most contracts for federally assisted construction over $2,000 must include provisions for paying workers on-site no less than the "locally prevailing wages" (though critics argue that this means "union wages") and fringe benefits paid on similar projects. Subsequent amendments were adopted in 1935, 1964, and 1994.

In 1935, Congress wanted to ensure that contractors bidding on public works projects would not reduce wages in order to offer the lowest bid price. The amendment allowed government agencies, that were required to accept the lowest bids, to employ contractors paying "fair" wage rather than those who competed by hiring cheaper labor. Later, in 1964, the Act was modified to include fringe benefits in the calculation of prevailing wages. The Act was most recently amended in 1994 and specifically targeted a capital projects related to Head Start programs.

Temporary Repeal
The Davis-Bacon Act has been suspended by several Presidents in the wake of national emergencies. It was first suspended in 1934 by President Franklin Roosevelt for three weeks in order to manage administrative adjustments in light of the New Deal.

President Richard Nixon suspended the Davis-Bacon Act for 28 days in February 1971 in an effort to reduce inflation pressures. The decision was criticized by the Secretary of Labor Peter Brennan, who accused the Administration of providing preferential treatment to construction workers. Shortly afterward, President Nixon reinstated Davis-Bacon and established the Construction Industry Stabilization Committee.

In September 1992 President George H.W. Bush indefinitely suspended the Davis-Bacon Act following Hurricane Andrew (1992). When President Bill Clinton took office, he re-instated the Act in March of 1993.

Following Hurricane Katrina, several House Republicans encouraged the President to temporarily suspend the Davis-Bacon Act in order to expedite the reconstruction of the Gulf Coast. On September 7, 2005, President Bush, citing a national emergency, indefinitely suspended the Davis-Bacon Act for federal contracts in the impacted Gulf Coast Region [Alabama, Florida, Louisiana, and Mississippi].

Permanent Repeal Efforts
Pro-Repeal. Republicans have long tried to repeal the Davis-Bacon Act on the grounds that the regulations are outdated, expensive and bureaucratic. The most recent attempt to repeal Davis-Bacon was in 2004.

In 1993, a lawsuit filed by the Institute for Justice argued that the Act is racially discriminatory and violates the equal protection clause of the Fifth Amendment. ďThe minority contractors challenging the constitutionality of the Davis-Bacon Act in this lawsuit have seen business opportunities lost and their ability to hire minority workers from their communities greatly restricted because of the requirements of the ActĒ (Institute for Justice).

Many individuals in favor of repeal argue that the Act restricts contracting and employment opportunities for small (and primarily non-unionized) minority-owned construction firms. Proponents also argue that the Act establishes inflated wage rates and creates rigid job classifications and procedures which are more standard operating practice for unions.

Anti-Repeal. Democrats and labor organizations have been staunch supporters of the Davis-Bacon Act and have spoken out in strong opposition to the Presidentís most recent action. They believe that removing the wage floor and the requirement that contractors report payroll information to contracting agencies will render contracts susceptible to waste, fraud, and abuse and further perpetuate poverty in the area impacted by the storm.

The National Association of Government Contractors favors repeal of the Davis-Bacon Act wage floors that limit competition and force small businesses out of the contracting process.




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