April 2002 IBEW Journal
The Davis-Bacon Act helps to ensure the preservation of a community wage standard. Originally enacted in 1931 and amended several times since then, the federal statute requires that contractors bidding on U.S. federal construction projects exceeding $2,000 pay their employees the standard wage and benefit package that workers in the area performing similar work are earningthe "prevailing wage."
The law does not set specific wage rates that contractors must pay their workers, nor does it require contractors to pay union scale. It simply requires that all contractors who bid on a federally financed construction project base their bid on a common labor cost, and that competition focuses on matters of management, quality, timeliness and productivity rather than on wages.
The construction industry is especially vulnerable to wage-cutting competition. Job awards in this field rarely depend on project design; the structure and the materials used to build it are commonly specified in detail by the buyer. With limited opportunities to trim costs, contractors are inclined to underbid competitors by cutting wages. The federal investment in construction activity covered under Davis-Bacon significantly affects the economic and social stability of communities. Therefore, the intent of the Davis-Bacon Act of 1931 was, and is, to prevent the federal government from undercutting local area labor standards when awarding contracts for federal construction work throughout the United States or the District of Columbia.
Collective bargaining agreements may constrain wage cutting among unionized contractors, but nonunion employers conduct their business with no such restraints. They tend to cut wages as they pursue profits, regardless of the impact on the workers standard of living and well-being or the effect on the communities in which the workers and their families live.
Opposition to Prevailing-Wage Laws
Since the Davis-Bacon prevailing-wage law was enacted in 1931, opponents have developed many arguments against it, claiming its hard to administer, expensive and unnecessary. These arguments are just plain false.
The U.S. Department of Labor has been calculating the prevailing wage for each area of the United States since 1935 and hasnt encountered any major problems yet. In fact, the Associated General Contractors (AGC) complained when the law was enacted that it did not provide for predetermination of prevailing wage rates. (The original act did not require that the Department of Labor predetermine the prevailing wage ratethe contractor decided what the rate was. Disputes over the prevailing rate were referred to the agencys contracting officer, then ultimately to the secretary of labor for a final, binding decision.)
Paying workers a decent wage isnt expensive; paying workers a low wage is expensive. Low-wage, low-skill workers often take longer to perform the work, are not as skilled because they usually havent been trained as well as higher-paid workers (work often needs to be redone) and need other government assistance because they cant provide adequately for their families. Low-wage workers also contribute less to the enconomy of their community since they purchase less from local stores and pay less in taxes to the local and state governments.
How can a law be considered unnecessary when it requires contractors to pay their workers the wages that are prevailing in the area in which they are working? As U.S. Representative Robert L. Bacon (R-NY) stated when he proposed his first prevailing-wage bill in 1927:
"It is highly desirable, of course, that the federal building program should not tend to have the effect of upsetting labor wages and labor conditions in any community. If this bill passes, the federal government, in carrying out the building program, would have to conform to the local labor wages and conditions."
The Davis-Bacon Act fulfills the intent of Representative Bacon and Congress to protect local labor standards by helping to ensure the preservation of a communitys general wage scale.
Davis-Bacon Opponents Are Relentless
Opponents of Davis-Bacon have never stopped trying to repeal the law or at least undermine it. Some of their attempts are obvious: outright abolition or increasing the dollar threshold for project eligibility. But opponents are also developing stealth strategies to undercut the Davis-Bacon Act. Following are some examples of their attacks.
Protect Your Right to a Fair Wage
Economic and working conditions within the construction industry remain much the same as they were when Congress originally passed the Davis-Bacon Act:
Becausegovernment specifications are very detailed and precise, andthe price of building materials has tendedto become uniform, variations between bids submitted by competing contractors are due most frequently to different estimates of labor costs. Since the contract office is compelled by statute to award the contract to the lowest responsible bidder, a premium would be placed on cutting labor costs, unless a stringent prevailing-rate-of-wage law were in effect. (Senate Committee on Education and Labor, 1935)
Today, perhaps more than ever, U.S. construction workers need the Davis-Bacon Act to safeguard their local wage rates on federal construction projects. The IBEW continues to forge alliances within Congress to ensure that this act remains a bulwark against unfettered wage cutting. You can help by becoming aware of construction-related bills introduced not only in the U.S. Congress, but also in your state legislature. Many states have "little Davis-Bacon Acts" which apply prevailing wages to state-financed construction projects, so Davis-Bacon opponents are active at the state level also. When you become aware of legislation that could threaten the application of Davis-Bacon to a project, let your legislators know you oppose any attempts to water down or abolish your right to be paid a fair wage for your labor.