Exclusionary Rule

Something's not kosher about Davis-Bacon.

When USS-Posco Industries decided to renovate its steel plant in Contra Costa County, California, in 1987, it did what any rational business would do: It hired the company that submitted the lowest bid, a joint venture whose main partner was BE&K Construction of Birmingham, Alabama.

BEB&K’s bid was $400 million, $50 million lower than that of its closest competitor. Because of the massive size of the project, workers were brought in from all over the country. Although BE&K was giving work to hundreds of people, the local building unions resented the nonunion contractor. With the help of the AFL-CIO, the local unions launched a huge public-relations campaign against the project. They alleged, first of all, that the deaths of two workers on the project were due to the use of untrained, nonunion laborers. (The company replied that the union’s charge was based on pure speculation.)

More important, the unions played on local resentment of the poor, often unskilled laborers who had traveled across the country to work on the project. These workers brought their families, causing temporary strains in the local social-services system. They also created unsightly conditions: Some of them lived in their cars until they could find more permanent quarters, while others set up house in trailers and cheap hotels. “It was kind of like The Grapes of Wrath of the construction industry,” one union official told The New York Times.

Building on resentment of the transient workers, the unions convinced the county Board of Supervisors to pass a law requiring all contractors working on large private building projects to pay the “prevailing wage”—otherwise known as the union wage. This law takes away any economic incentive for local companies to use nonunion labor and discourages the use of unskilled workers, who are not recognized in union pay scales. Similar laws have since been passed in several other jurisdictions in Northern California, and they may be imitated elsewhere.

The origins of the Contra Costa County law are startlingly similar to the origins of the granddaddy of all prevailing wage laws, the Davis-Bacon Act. Davis-Bacon, which was passed in 1931, requires that all federal contractors with contracts of over $2,000 pay their workers the prevailing wage.

The bill that eventually became Davis-Bacon was originally submitted to Congress in 1927 by Rep. Robert Bacon of Long Island, New York. Bacon’s action was spurred by a construction project in his district. An out-of-state, nonunion contractor (coincidentally, also from Alabama) had won a bid to build a Veteran’s Bureau hospital. According to Bacon, the workers “were herded onto this job, they were housed in shacks, they were paid a very low wage,” all of which caused “the neighboring community [to be] very upset.”

One added factor that might have upset Bacon was that all of the workers were black. In response to goading by a fellow congressman, Bacon denied any anti-black animus, declaring that his position would be the same “if you should bring in a lot of Mexican laborers or if you brought in any nonunion laborers from any other State.” (Blacks and Mexicans were not allowed into most construction unions.)

Bacon submitted various versions of his bill over several congressional terms, each time failing to win passage. But as the Depression lingered, the federal government launched a massive public-works project that soon accounted for half of all American construction. Members of Congress began to see Davis-Bacon as a way to protect local, white construction workers from the competition of job-hungry blacks, who suffered the most in the terrible economic situation.

The racist intent of the statute is clear from public remarks made by individual members. Rep. John J. Cochran of Missouri, supporting Davis-Bacon, said: “I have received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South.” Rep. Clayton Allgood, in the course of floor debate on the Davis-Bacon bill, added that the measure would discourage the use of black labor, which was “in competition with white labor throughout the country.”

Other members were more circumspect in their references to black labor. They railed against “cheap labor,” “cheap, imported labor,” men “lured from distant places to work on this new hospital,” ‘‘transient labor,” and “unattached migratory workmen.” But American Federation of Labor President William Green, testifying on the Davis-Bacon bill before the Senate Committee on Manufactures, made clear that a major goal was the elimination of “colored labor.”

Because of Davis-Bacon, almost all federal construction jobs went to whites. Discrimination was rampant throughout the construction industry—on the part of both labor unions and management. In such a labor market, the only advantage blacks had was their willingness to work for less money than whites. By setting a minimum wage, Davis-Bacon prohibited black workers from exercising that advantage. Instead, a white contractor had the choice of hiring either white or black laborers for the same price. Given white workers’ general hostility to black coworkers and the white contractors’ own discriminatory preferences, the contractors generally chose to hire exclusively white labor.

As of the late 1950s, union discrimination limited blacks in the construction industry almost entirely to unskilled jobs. For example, in 1950, only 1 percent of the electricians and 3.2 percent of the carpenters in the United States were black. And as late as 1961, blacks were still barred from the unions of the electrical workers, operating engineers, plumbers, plasterers, and sheet-metal workers, among others. In one shocking incident, because the local union refused membership to nonwhites, blacks weren’t allowed to work on construction of the Rayburn Office Building for the House of Representatives.

To make matters even worse, the only unskilled workers that Davis-Bacon regulations recognized were those in government-approved union apprentice programs. Blacks were very occasionally allowed into labor unions of unskilled workers but almost never into union-sponsored apprenticeship programs. In 1950, blacks represented from 0.6 percent to 4.1 percent of apprentices in various skilled trades.

Davis-Bacon’s restrictions on unskilled workers not only limited the employment opportunities of unskilled blacks but also kept them from acquiring skills. Because of discrimination in union and public vocational-school training programs, the only way blacks could become skilled workers was to accept unskilled employment and learn on the job. As of 1940, blacks composed 19 percent of the 435,000 unskilled “construction laborers” in the country and 45 percent of the 87,060 in the South. Thanks to Davis-Bacon, these workers were excluded from federal building projects.

Even federal efforts to ensure compliance with the 1964 Civil Rights Act did not shield blacks from Davis-Bacon’s discriminatory effects. A 1968 Equal Employment Opportunity Commission study found that “the pattern of minority employment is better for each minority group among employers who do not do contract work for the government [and are therefore not subject to Davis-Bacon] than it is among prime contractors who have agreed to nondiscrimination clauses in their contracts with the federal government.”

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.


Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties