Economics

Davis-Bacon in D.C.: "The Obama administration has thrown up a new hurdle to investment."

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The Cato Institute's Chris Edwards highlights a controversial new decision by the Labor Department to apply pro-union Davis-Bacon rules to the CityCenter development project going up in Washington, D.C. "While Democrats in Congress are demanding government action to fix the nation's supposedly crumbling infrastructure," Edwards writes, "here the Obama administration has thrown up a new hurdle to investment."

Under the Davis-Bacon Act of 1931, contractors working on federal projects are required to pay their workers a "prevailing wage," which in practice amounts to the hourly rate set by local unions. This move by the Labor Department would extend those rules to contractors working with the local government in Washington. Not surprisingly, District of Columbia Mayor Vincent Gray's administration is opposed. And with good reason: Davis-Bacon will unnecessarily jack up the cost of construction. As Victor L. Hoskins, deputy mayor for planning and economic development, told The Washington Post, the Labor Department's decision could have "unprecedented, significant [and] adverse citywide cost impact upon every economic development project in the District's portfolio."

In Reason's November 2010 feature story "How to Slash the State," I made the case for dismantling Davis-Bacon.

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  1. Prevailing wage = what the union thinks it can get away with plus some

    The NLRB seems to be on a rampage lately.

  2. Not to mention the Mavis-Beacon rule that all secretaries must type 120 wpm or faster.

  3. In other shocking news, the sun rose in the east this morning.

    All politicians lie, but Obama lies like he breathes. More so than with any president before in our history, you have to ignore everything this asshole says and watch what his thug underlings in the bureaucracy are quietly doing in order to understand his true agenda.

  4. Again, for the record, “prevailing wage” includes the union base wage plus the dollar value of all non-wage union benefits.

    1. Not to defend Davis-Bacon, but for most purposes, “wage” does mean the base wage plus benefits.

  5. Not surprisingly, District of Columbia Mayor Vincent Gray’s administration is opposed.

    How ’bout that: even a liberal Democrat mayor “hates the working class”!

  6. All your market are belong to us.

  7. Davis-Bacon will unnecessarily jack up the cost of construction.

    LIVING WAGE.

    What sort of monster could object to that?

    1. who gets to determine the living wage and when did it become govt’s role to insist on it? Jobs exist because there is work to be done. Not all jobs are of equal value. Neither are all workers, a reality that union rules do their best to erase.

  8. Live by the sword, die by the sword.

    Shorter Bandit:
    Fuck them both. (union and DC government)

  9. Ironically, Davis-Bacon was not passed initially just to support unions, but to suppress blacks in the South, because black construction workers were willing to work for less than union wage (and were kept out of the unions). Even today, unions tend to keep blacks out via rules about how you get into the union.

  10. Craig at 145 beat me to one of my points.

    The other is to note that this highly interventionist law was signed by that notorious defender of laissez-faire Herbert Hoover.

  11. To a Libral, this increases efficiency, because the purpose of construction is to funnel money from the taxpayers to construction workers and their unions.

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