Davis-Bacon Act

Signed into law in 1931 by President Hoover, the Davis-Bacon Act requires that federally-funded construction projects pay workers the “prevailing wage” in a given area.

One of the original goals was to discourage hiring minority contractors. The law requires federal bureaucrats to set the wages for categories of constructions workers in each of 3,000 counties in America. Today, for example, a covered bricklayer in Seward County, KS, should make $20.70 an hour—he should make $16.00 in Floyd County, GA, and $24.60 in Navajo County, AZ.

Davis-Bacon is like a parody of government micromanagement. The predictable result is a byzantine, costly, and error-ridden program. The end result research has shown is that the Act inflates the labor costs of public projects by 15 to 20%.

In 2009, the economic stimulus bill included $5 billion to weatherize 607,000 homes—something that would both improve energy efficiency and put people to work. But while the government had an existing weatherization program, it was never before subject to Davis-Bacon provisions, so for months that money sat on the sidelines while the Department of Labor determined what a “weatherproofer” should earn in each of the country’s 3,000 counties. The stimulus money was supposed to weatherize 2,500 homes a month in California—by the end of 2009 it had serviced only 12.

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