Human Events has published an opinion piece I wrote on President Bush's suspension of the Davis-Bacon Act in the Katrina zone. When I last posted on this, commentors asked for a more detailed explanation of how Davis-Bacon, passed with the intent of keeping blacks from working on federal construction projects, still hurts minorities today. Here's what I wrote for Human Events:
Davis-Bacon forces federal contractors to pay their workers the "prevailing wage," but this wage is not determined by actual average local construction wages. Rather, the "prevailing wage" is generally determined by official local union wage rates, which are often much higher than average local wages. Indeed, the prevailing wage is sometimes higher than even actual union wages, because local unions often negotiate discounts for particular projects.
The intended result of requiring federal contractors to pay inflated union wages was to bar workers whose wages were below union scale. These excluded workers included blacks--who have long suffered discrimination from the building trades unions--and non-union workers more generally.
Moreover, construction craft unions insist that unskilled laborers get paid inflated wages to discourage contractors from hiring them. If a contractor has to pay an entry-level laborer almost as much as a skilled worker, he will often hire the more versatile worker, even if that worker winds up primarily doing unskilled work.
Davis-Bacon’s bias in favor of skilled workers especially harms minorities. Blacks, for example, are significantly less likely than whites to be skilled construction workers, but almost one-and-one-half times as likely as whites to be unskilled workers.
Enforcement of union work rules compounds Davis-Bacon's discriminatory effects by limiting the ability of unskilled workers to receive on-the-job training. A laborer who so much as picks up a hammer or a wrench is immediately classified as a carpenter or plumber, and must be paid at a skilled worker's rate. Under union practice, the only category of unskilled workers who may receive training for skilled positions are workers who receive one of the few available slots in a registered apprenticeship program, or to find a rare "helper" job, which are sometimes permitted on Davis-Bacon projects.
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.