Easing Back Into Posting and the Perils of Davis-Bacon

Modern medicine having had its opportunity to work its magic through antibiotics, today seemed like a good day to ease back into posting. Unfortunately, my tour through today's Circuit court opinions found nothing of note.

However, one item that was much commented on in the labor blogs was President Bush's emergency suspension of the Davis-Bacon Act for certain counties in Mississippi, Louisiana, Alabama and Florida. Nathan Newman at the Labor Blog has this post, Bush: Let's Keep Louisiana Poor Poor. The New York Times has also weighed in, A Shameful Proclamation.

Some of the comments in the blogosphere misunderstand what Davis-Bacon does. It is only applicable to federal government construction, so the suspension of Davis-Bacon has no impact on private sector reconstruction projects. It is a 'prevailing wage' statute, so it has nothing to do with the Fair Labor Standards Act, so that basic minimum wage and overtime laws are untouched.

Under Davis-Bacon, the Department of Labor periodically does labor surveys for various construction trades and publishes a wage determination as to the prevailing wage-rate that must be paid on federal construction projects in that area. There are several different classifications depending on the type of construction being done, but "building" rates for New Orleans are found in this determination. The rates range from $22.09 plus $6 an hour in fringe benefits to electricians (meaning an employer has to pay the base rate and either $6 an hour in the fringes found by the DOL, or the cash equivalent, $28.09 an hour), to $9.55 plus $1.05 in fringe benefits for laborers.

Davis-Bacon has been criticized as being originally passed to protect union jobs, often at the expense of minority workers. That comment has been made over the years, The Davis-Bacon Act: Let's Bring Jim Crow To An End, a 1993 article by David Bernstein, published by the Cato Institute, and today at the Investors Business Daily website, Bringing Home the Davis-Bacon. That article sums up that point:

The "prevailing wage" is arbitrarily calculated based on a formula of previous union and nonunion wages in a given locality. But in major urban areas it is usually the union wage and usually high enough to price the poor and unskilled out of the labor market.

That is its effect and, though union leaders deny it, that was its intent. And it was targeted directly at minority workers.

There are other criticisms on the way the rates are calculated, on restrictive work practices that are required as workers must only work within their classified rate etc.

As with most issues, there are arguments on both sides, unfortunately, as seems to be our current mind set, every decision, including this one, ends up being characterized in the most mean spirited way. Probably a good warm up for hearings on Supreme Court nominees.