Davis-Bacon Act

Wednesday, August 4, 2010 - 8:00pm

Background

In 1931 the Davis-Bacon Act was adopted to create a "prevailing wage," usually the union rate, for any construction contract over $2,000 funded in whole or in part by the federal government. The benefits of the "prevailing wage," however, go to a very few at the expense of taxpayers and the Act is a prime example of unfunded mandates and government waste.

Davis-Bacon inflates the cost of federally funded construction projects by as much as 15%, discourages economic growth, and raises federal spending. In fact, Davis-Bacon Act wages cost taxpayers over $1 billion annually, in addition to the $100 million in government administrative costs per year.

Davis-Bacon also creates unnecessary regulatory paperwork costing construction companies $190 million annually. In addition, it forces state and local governments to pick up the cost of artificially high union-scale wages for construction projects in which any federal money is involved.

U.S. Chamber Position

Repeal of the Davis-Bacon Act will spur local economic growth by making it easier for state and local governments to fund federally subsidized projects such as school construction and improvements to the transportation infrastructure.

Davis-Bacon repeal also would create an estimated 31,000 new construction jobs and remove a barrier that keeps many smaller and minority owned construction firms from bidding on federally funded construction projects.