Lack of competition, increased paperwork, and inflated wages mean higher costs for taxpayers and the economy. According to the Congressional Budget Office (CBO) in 1994, if Davis-Bacon were repealed federal taxpayers would conservatively save $3.1 billion over the following five years. Allowing the use of helpers, or semi-skilled workers would save an additional $500 million a year, bringing total savings from repeal to nearly $6 billion over five years. The Davis-Bacon Act inflates the cost of federal construction by an average of 5 percent to 15 percent. And, the GAO and CBO estimates do not include the costs of foregone competition -- raising the total cost of Davis-Bacon even higher.

President Bush Saves Taxpayer Dollars by Waving Davis Bacon
From http://www.atr.org/

Last week, President Bush waived a pro-union law that would have slowed down the rebuilding of New Orleans and the Gulf region.  Known as the “Davis-Bacon Act,” this Depression-era law requires that any federal building and roads contract pay the “prevailing wage” for the region and industry.  Due to the arcane way this is calculated, the real-world result is that unionized construction firms can set their own price and get the work.  Taxpayers have been overpaying anywhere from 25% to 33% for over 70 years now.  Untold billions of dollars of road and building money has been looted from taxpayers’ pockets and given to corrupt union officials who campaign against conservatives.

Even worse, the roots of the Davis-Bacon Act are steeped in racism.  The writers of the act hoped that by increasing wages for federal projects, poor blacks from the South would be shut out of the construction industry.  Much the same effect happens today in merit shop construction firms that hire low-skilled workers or first generation immigrants.  Click below to see ATR’s actions to fight against union cronyism on Davis-Bacon:

http://www.atr.org/content/pdf/2005/sep/090205-lt-davisbacon%20_2_.pdf

http://www.atr.org/content/html/2005/sep/090805pr-davisbacon.htm

http://www.workerfreedom.org/index.php?content=dbfactsht

 

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