# ![](media/image1.png)

April 2004

## Davis-Bacon Facts and Talking Points

-   The Davis-Bacon Act was signed into law in 1931, during the "Great
    Depression," to inflate labor rates for workers on government
    projects.

-   Specifically, the Davis-Bacon Act requires that each federal
    government contract worth over \$2,000 for the construction,
    alteration, or repair of public buildings or public works (including
    airports and public housing) set the minimum wages to be paid to
    laborers and mechanics employed under the contract at no less than
    the **locally prevailing wages** paid on projects of a similar
    character (as determined by the Secretary of Labor).

-   By "locally," the Act refers to the "city, town, village, or other
    civil subdivision of the State in which the work is to be
    performed."

-   Included in "wages" are the [basic rates of hourly pay]{.underline}
    and **[all fringe benefits]{.underline}** (when not otherwise
    required by other federal, state, or local law), such as pensions,
    health care benefits, compensation for occupational injury,
    unemployment insurance, life insurance, disability or sickness
    insurance, accident insurance, vacation pay, and defrayments of
    apprenticeship costs.

-   These prevailing wage requirements **override** "any contractual
    relationship which may be alleged to exist between the contractor or
    subcontractor and such laborers and mechanics...."

-   Davis-Bacon authorizes a federal government contracting officer to
    **withhold accrued payments** due the contractor in order to
    directly pay laborers and mechanics for any shortfall in wages paid
    to them by the contractor.

-   The federal government is also authorized to **terminate an entire
    contract** if a contractor fails to pay the prevailing wages to its
    employees and subcontractors on the project.

-   If laborers and mechanics accept less-than-prevailing wages, such
    acceptance does **[not]{.underline}** exempt a contractor from
    Davis-Bacon requirements.

-   Once the Comptroller General puts a person or firm on a list of
    persons and firms that have disregarded their prevailing-wage
    obligations, no government contract can be awarded to such person or
    firm for **three years** after an appearance on the list.

-   In the event of a **national emergency**, the President can suspend
    Davis-Bacon requirements.

-   According to the Department of Labor, **18 states do
    [not]{.underline} have prevailing wage laws**: Alabama, Arizona,
    Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana,
    Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma,
    South Carolina, South Dakota, Utah, and Virginia. Of these states,
    10 either **repealed** previously existing prevailing wage laws or
    had them **invalidated** by a court decision.
    <http://www.dol.gov/esa/programs/whd/state/dollar.htm>

-   Furthermore, **21 other states** have prevailing wage laws with
    threshold amounts **higher** than the \$2,000 threshold for federal
    construction contracts:

> \--Arkansas (\$75,000)
>
> \--Connecticut (\$400,000 for new construction/ \$100,000 for
> remodeling)
>
> \--Delaware (\$100,000 for new construction/ \$15,000 for remodeling)
>
> \--Indiana (\$150,000)
>
> \--Kentucky (\$250,000)
>
> \--Maine (\$50,000)
>
> \--Maryland (\$500,000)

\--Minnesota (\$25,000 where more than one trade in involved/ \$2,500
where a single trade is involved)

> \--Montana (\$25,000)
>
> \--Nebraska (\$40,000 for public school district projects only)
>
> \--Nevada (\$100,000)
>
> \--New Mexico (\$20,000)

\--Ohio (\$65,843 for new construction, / \$19,752 for remodeling, both
figures subject to inflation adjustments)

> \--Oregon (\$25,000)
>
> \--Pennsylvania (\$25,000)
>
> \--Tennessee (\$50,000)
>
> \--Vermont (\$100,000)
>
> \--Washington (\$25,000 for state college/university construction)

\--West Virginia (\$50,000 for projects of the West Virginia
Infrastructure and Jobs Development Council)

\--Wisconsin (\$186,000 where more than one trade in involved/ \$38,000
where a single trade is involved; no threshold for state highway
contracts)

> \--Wyoming (\$25,000)
>
> <http://www.dol.gov/esa/programs/whd/state/dollar.htm>

**[Talking Points]{.underline}**:

-   Davis-Bacon violates core capitalist values of free competition and
    market labor.

-   Prevailing wages are often based upon union-negotiated wages and
    generally exceed the average wage in the area.^1^

-   Repealing Davis-Bacon would reduce construction industry wages for
    workers on government contracts down to the market levels enjoyed on
    private-sector projects.

-   By inflating labor rates, Davis-Bacon wages usually increase the
    costs of federal projects by as much as 15%^2^---costs which get
    passed on to the taxpayers.

-   Davis-Bacon forces private companies to do hundreds of millions of
    dollars of excess administrative work each year.^3^

-   The costly and time-consuming requirements of Davis-Bacon bias
    government contracting against small (often minority-,women-, or
    locally-owned) businesses who don't have the resources to comply. As
    a result, large, unionized companies are more often awarded
    government contracts---even for small projects.^4^

-   [Davis-Bacon has racist beginnings]{.underline}. In 1927, Rep.
    Robert Bacon of Long Island began pushing for federal prevailing
    wage law after an Alabama firm (using black---and hence at the time
    cheaper---workers) won a federal contract in 1926 to build a
    veterans' hospital in Bacon's district.^5^

To read the text of the Davis-Bacon Act as it has been amended since
1931, go to this website:
[http://www.dol.gov/esa/regs/statutes/whd/dbra.htm](http://www.dol.gov/dol/esa/public/regs/statutes/whd/dbra.htm)

Sources:

^1^ Associated Equipment Distributors, Oak Brook, Illinois.

^2^ Apollo Construction Company, Wisconsin.

^3^ Apollo Construction Company, Wisconsin.

^4^ Institute for Justice (Testimony of Litigation Director before
Congress on June 20, 1996)

^5^ Institute for Justice (Testimony of Litigation Director before
Congress on June 20, 1996)