NCPA - National Center for Policy Analysis

LOOK FOR THE UNION LABEL

June 10, 2008

What do the farm bill, the cap-and-trade global warming bill, the clean water bill, the housing bailout bill and the school construction bill all have in common?  In each one and countless others the Democratic majority in Congress has inserted "prevailing-wage" requirements that amount to a super-minimum wage, says the Wall Street Journal.

We're speaking of Davis-Bacon, the 1931 law that set a floor on wages in part to price black and Mexican workers out of the work.  Today, its main impact is to require de facto union wages, says the Journal.

For example: 

  • A Heritage Foundation analysis of wage data reports that in many cities the mandated Davis-Bacon wage is twice as high as the market wage.
  • In Nassau-Suffolk in New York, for example, Davis-Bacon requires a minimum wage for brickmasons of $49.67 an hour, though the more common area wage for that work is $25.50.
  • Many reputable studies have estimated that Davis-Bacon inflates federal construction costs by anywhere from 5 percent to 39 percent.
  • America could be building about 25 percent more bridges and roads by repealing Davis-Bacon.
  • A 2001 study by economists Daniel Kessler of Stanford and Lawrence Katz of Harvard found that when states repeal their Davis-Bacon laws, this is associated with a decline in the union wage premium and an appreciable narrowing of the black/nonblack wage differential for construction workers.

Barack Obama, a big fan of Davis-Bacon, has proposed a new taxpayer-supported $60 billion infrastructure bank that would siphon billions off to his union friends by mandating Davis-Bacon.  That's "change," -- right out of taxpayer pockets, says the Journal.

Source: "Look for the Union Label," The Wall Street Journal, June 10, 2008.

For text:

http://online.wsj.com/article/SB121305801161559387.html  

 

Browse more articles on Economic Issues