The Washington Independent reports more bad news from the Obama stimulus:
Though stymied on the Employee Free Choice Act, which would make it easier for workers to form unions, organized labor is about to claim a big consolation prize: the massive application of a law guaranteeing "prevailing wages" for hundreds of thousands of construction workers hired under President Obama's economic stimulus program.
Secretary of Transportation Ray LaHood is now preparing guidelines that will expand the scope of the 1931 Davis-Bacon Act, according to a department spokesperson….
The legislation, approved by Congress and signed by President Obama last month, mandates that all "laborers and mechanics" on projects "funded directly by or assisted in whole or in part" by the stimulus program have to be paid at least as much workers on similar projects in the same area, as determined by the Department of Labor.
With $49.3 billion for transportation construction, $5 billion for home weatherization projects, and billions for other building projects, the application of Davis-Bacon standards will have rare historical impact.
Davis-Bacon certainly had "rare historical impact" when Herbert Hoover signed it into law in 1931. The act's origins lie in the ugly racism that defined American organized labor for the better part of five decades. In 1927, an Alabama contractor brought a crew of black construction workers up to Long Island, New York to work on a new Veteran Bureau's hospital. In response, Republican Rep. Robert Bacon introduced legislation to ban such "cheap" labor by requiring that all contractors working on federal projects worth over $5,000 pay their workers the "prevailing wage"—which effectively meant the local (white) union wage.
During Senate hearings on the bill, American Federation of Labor President William Green argued that, "colored labor is being brought in to demoralize wage rates." Emil Preiss, business manager of the New York branch of the International Brotherhood of Electrical Workers (a whites-only union), told the House of Representatives that the black Alabama crew were "an undesirable element of people."
The result of this race baiting was that President Hoover signed Davis-Bacon into law just as the federal government began a massive public works spending spree. For black workers (who were banned from most unions), their main competitive advantage came from working for sub-union wages. Davis-Bacon destroyed that advantage when they needed it most.