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