Evening star., 1946-04-18
A Housing Deterrent


the Senate inserted a prevailing
wage" proviso which deserves more
careful consideration than it appar-
emily received. At the urgent re-
quest of the American Federation of
Labor and the Congress of Industrial
Organizations-expressed in letters
and kilograms to various Senators
the Senate wrote into the measure
requirement that wages prevail
ing In the locality in which the work
is performed" be paid on all projects
covered in the ten-year, 10000, ,O00-
home program. This was done in
the face of warning by Raymond
M. Foley, Commissioner of Federal
Housing, that inclusion OF such a re-
striction would seriously curtail if
not completely destroy" the Federal
Housing Administrations insurance
program aimed to encourage con-
struction of small homes.
The long-range housing bill, with
Its companion measure, the emer-
gency housing bill, resulted from
President Truman's plea that obsta-
cles in the way Of a prompt resump-
tion Of home building be removed
and that every reasonable induce
ment be extended private industry
to solve the critical housing short
age. Yet, according to Commission
er Foley, the effect OF the wage
amendment would be to interpose
an obstacle not now existing and
thereby to imperil the Governments
postwar housing program in most
vital spot-where low-cost homes for
returning veterans is concerned.
Organized labor, in supporting the
amendment, contended that it would
serve to insure that home buyers in
the lower-priced markets receive
their moneys worth in the form OF
expert construction. The fallacy of
this argument lies in the fact that
there would be nothing in the law
to require that the quality of work.
manship rise with the wages. As a
matter of fact, there is no proof that
the average nonunion rural car
penter is less skilled or less conscien-
tiouS about his work than his union
counterpart in the cities. Besides,
there are practical administrative
difficulties in the way of determin-
ing the prevailing wages" in small
communities and the other countless
localities" where homes would be
built under the legislation.
The most serious objection to the
amendment, however, is that it
threatens to have blighting effect
on the financing of new homes un-
der the inviting terms of FILA insur-
ance.- This is because, as Commis-
sioner Foley pointed out in a letter
to Senator Barkley, banks and other
agencies would be disinclined to
make FHA-insured loans over which
hung the possibility OF FHA with
drawal of its guarantee If contrac-
tors failed to abide by the prevailing
wage provision. The tendency of
builders inevitably would be to ig-
more F'HA and it's "red tape" and
to go direct to banks for noninsured
loans on less favorable terms.
The home buyer would bear the
extra burden, just as he will bear the
extra costs implicit in the recent rul-
ing by the Labor Departments Wage
Adjustment Board that Washington
home builders must pay higher wage
rates for certain classes of work.
Since the primary goal of the Presi-
dents housing program is to remove
not to create-deterrents to expe-
ditious construction of reasonably
priced small homes, the House should
lose no time in removing the pre-
vailing wage" restrictions from the
Senate-approved measure-and the
Senate should fall in line when the
bill goes to conference.