Should the Davis-Bacon act be repealed?

Abstract

F ifty-two years ago Congress passed the Davis-Bacon Act in order to correct a serious labor abuse caused by two factors: a huge federal construction program and a chaotic labor market. Unscrupulous contractors were winning government contracts by employing itinerant bands of unskilled laborers and paying them exploitive wages. This widespread practice had two results: it took contracts away from local contractors, and it resulted in work of lower quality since the laborers were, at best, only marginally skilled. The Davis-Bacon Act successfully corrected this abuse. Today, however, it is questionable whether the Act is viable and effective under current economic conditions, and a move is clearly afoot to repeal the Act or to amend it radically. The champion of the Act is organized labor-primarily the Building and Construction Trades of the AFL-CIO-in tandem with the Department of Labor. Together they have joined to provide almost every word in defense of the Act. The foes of Davis-Bacon are far more diversified and include nine separate Government Accounting Office reports, a Carter administration Office of Management and Budget report, and a report by the Congressional Budget Office, to name only a few. 1 As could be expected, management organizations, such as the Associated General Contractors and the U.S. Chamber of Commerce, are also quite vocal in their support for repeal. It is interesting to note that no professional economists have testified in favor of the Davis-Bacon Act. 2 Ultimately the fate of the Davis-Bacon Act will be decided by Congress, not necessarily as a result of a rational decision about what is right or wrong, effective or obso-