The moderate wing of the liberal blogosphere is abuzz over President's Bush's suspension of the Davis-Bacon Act in the Katrina zone. In essence, Davis-Bacon requires federally subsidized construction contractors to pay union wages and follow union work rules. Some moderate Democrats, now represented by Mickey Kaus in the blogosphere, have opposed Davis-Bacon for years because it raises the costs of government construction while favoring established contractors and skilled union workers over their less-established competitors. Other Democrats, however, ably represented by Matt Yglesias, argue that Davis-Bacon helps unions, and unions help the Democrats and liberal causes more generally, so Davis-Bacon is a good thing, even if it's a wasteful law.
I've written a fair amount about Davis-Bacon, and especially its blatantly racist origins. My first paper on the subject, published by the Cato Institute way back in 1993, can be found here. More comprehensive research resulted in chapter 3 of my book, Only One Place of Redress: African Americans, Labor Regulations and the Courts from Reconstruction to the New Deal, which I've temporarily put online here. I doubt any objective observer could read this chapter and believe labor union denials (expressed in a paper, apparently not available online, entitled "The Davis-Bacon Act: A Response to the CATO Institute's Attack," by the AFL-CIO, Building and Construction Trades Department), that Davis-Bacon was motivated in significant part by the desire to exclude African Americans from federal construction jobs.
Last week, someone from the New York Times asked me to write a short piece arguing that Davis-Bacon should be repealed. The Times ultimately declined to run the piece, but I reprint it, in a slightly longer version below.
Davis-Bacon: Racist Pork By David E. Bernstein
President Bush stands accused of insensitivity toward minorities and the poor because he has temporarily suspended the Davis-Bacon Act--which requires contractors working on federally subsidized projects to pay "prevailing wages"--in areas affected by Hurricane Katrina. The president's critics, however, ignore both the discriminatory history and current perverse effects of Davis-Bacon. In fact, the president's order does not go nearly far enough.
In 1927, Rep. Robert Bacon (R-NY) --whose pet issue was protecting America's racial "homogeneity"--introduced what became the Davis-Bacon Act in 1927 after a contractor employed African-American workers from Alabama to build a Veteran's Bureau hospital in his district. The "neighboring community," Bacon reported, was "very upset," as were local unions.
Bacon's bill was later co-sponsored by a fellow avowed racist, Sen. James Davis (R. Pa.), who sympathized with Bacon's complaints about the "outfit of negro laborers" who worked on the hospital. Davis-Bacon's legislative history is punctuated by repeated complaints from various congressmen about African-American construction workers stealing jobs from "white labor."
Congress ultimately chose to pursue the goal of excluding blacks for the benefit of unionized white workers by requiring federal contractors to follow union wage and work rules.
As expected, by forcing federal contractors to pay their workers the "prevailing wage" as determined by local union wage rates, Davis-Bacon prevented African Americans--who have long suffered discrimination from the building trades unions--and other workers from competingwith with union workers for jobs on federally funded projects. Contractors found that the most efficient way to hire skilled, union-wage workers was through the union hiring hall.
Enforcement of union work rules compounds Davis-Bacon's discriminatory effects by favoring skilled workers over (disproportionately minority) unskilled workers. Rigid job classifications prevent laborers from gaining skills on the job, unless they manage to find a place in a union apprenticeship program.
Minority contractors, meanwhile, find that Davis-Bacon's pro-union bias, opaque regulations, and expensive compliance costs create a tilted playing field, favoring established, white-owned union construction companies.
For 74 years, Davis-Bacon has fulfilled its purpose of reducing minority participation in the construction industry.
Ironically, Davis-Bacon no longer even serves its original function of ensuring that public works jobs go to local workers. Residents of urban areas today often find themselves looking on with understandable resentment as government contractors import union workers from distant suburbs and beyond rather than hire local minority workers who lack the skills, experience and connections to command union wages.
Beyond Davis-Bacon's discriminatory effects, the law adds billions of dollars to the cost of infrastructure projects. Apologists claim that the law results in higher quality construction and reduces workplace injuries. However, this claim is based on the unsupported assertion that union workplaces are inherently safer than non-union workplaces.
Besides, grading and rewarding federal contractors based on their actual performance would be a far more efficient way to achieve those goals.
In short, Davis-Bacon is wasteful political pork with dubious racist origins. Even today, the legislation benefits the building trade unions at the expense of unskilled workers. President Bush should be applauded for suspending it in areas impacted by Hurricane Katrina, and Congress should completely repeal it.