Davis-Bacon Act: six bills in Congress would repeal it

One of the pillars of US labor law is headed for major change, if not outright demise. This is the Davis-Bacon Act, depression-era legislation that regulates wage rates for government construction projects.

Critics say the law costs taxpayers at least $1 billion each year, maybe more when indirect inflationary effects are added in. Labor leaders warn that workers would be "victimized and exploited" without Davis-Bacon, and their congressional supporters have promised an all-out battle -- including a filibuster if necessary -- if the law is attacked. But given movement in the more conservative Congress and recent actions (private as well as public) by the White House that may not be enough to prevent the law's opponents from predominating.

Enacted in 1931, the Davis-Bacon Act says federal construction project wages should be based on "prevailing" local wages. Passed during the depression, it was designed to prevent itinerent groups of workers -- exploited by labor contractors who had no trouble rounding up unemployment men -- from underbidding local employers.

Since then, the law has been expanded to include many federally assisted construction projects, such as highways, sewers, housing, transportation systems , recreation facilities, and airports, totaling at least $35 billion a year.

Numerous studies have shown that workers paid under Davis-Bacon rules actually receive considerably higher than average compensation.

The General Accounting Office (GAO) has estimated that unnecessary construction costs due to the act cost the public more than $700 million a year, and much more when the inflationary impact on the economy is considered. Others say it adds more than $5 billion to the cost of federal construction.

In a report to Republican congressmen last October, the GAO estimated that the law would increase the cost of Washington's "Metro" rail system by 6.8 percent, or $149 million.

Part of the problem apparently is the way the US Labor Department figures "prevailing wages." For example, it considers any single wage group comprising at least 30 percent of the total to be the average. Often this means union workers who bargain collectively for higher wages. Non- union workers thus are not weighted proportionately.

Others charge that Davis-Bacon discriminates against minorities, women, and young people by requiring contractors to pay higher wages and use fewer trainees.

Since 1931, it is pointed out, many more labor protection measures have become law including minimum wages and unemployment compensation. On average, construction workers are paid considerably more than the average manufacturing worker and have seen their wages rise much faster than inflation in recent years.

Still, labor leaders insist the law ought to be retained.

In Senate testimony earlier this year, Robert Georgine, president of the Building and Construction Trades Department of the AFL-CIO, said: "There is still a compelling need for this law because, without it, workers will be subjected not to just losing a few dollars in wages but to flagrant abuses . . . it is a reality that workers are still victimized and exploited."

The GAO has recommended that it be repealed.

There are six repeal bills on Capitol Hill. Such measures have failed before , but they are now given a better chance.

President Reagan has strongly criticized Davis-Bacon, but during his campaign said he opposed outright repeal.

Secretary of Labor Raymond J. Donovan has offered administrative changes. A complete administrative rewrite of the law is due by the end of the month.

Significantly, White House officials last week privately told key GOP senators they will not block congressional efforts to remove Davis-Bacon provisions from important federal aid bills covering large construction projects .