Regulation

Trump Promises 'An Announcement' on Davis-Bacon Within Two Weeks, Setting Up Showdown With Labor Unions

Davis-Bacon is a blatantly protectionist law that benefits labor unions at the expense of taxpayers (and it's racist too). Trump should dump it.

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Olivier Douliery/SIPA/Newscom

There are several interesting tidbits—along with the usual Trumpian nonsense—in the New York Times' newest sit-down interview with President Donald Trump, published Thursday morning.

One detail that may have escaped notice at the very bottom of the piece is Trump's claim that his administration is planning "an announcement in two weeks" on possible changes to the federal Davis-Bacon Act. That law, which dates back to 1931, requires all workers on federal projects worth more than $2,000 to be paid the "prevailing wage," which usually means the local union wage rate. The law effectively increases the cost of infrastructure projects by artificially inflating labor costs.

Trump has promised to spend $1 trillion on infrastructure, and that money would go a lot further if Davis-Bacon mandates are repealed, or at least loosened.

Here's what Trump told the New York Times' Glenn Thrush and Maggie Haberman in his typically vague "tune in next week to see what happens" way:

THRUSH: On the infrastructure stuff, a couple of quick things. Davis-Bacon [a law that regulates wages on federally funded projects]. Democrats have said that will be a poison pill. Are you going to touch Davis-Bacon? What are you going to do?

TRUMP: We're going to make an announcement in two weeks —

HABERMAN: Really?

TRUMP: — on Davis-Bacon.

HABERMAN: O.K. Can you give us a hint on where you are?

TRUMP: No.

[Laughter. Cross talk.]

TRUMP: It's an important question, actually.

[Unintelligible.]

TRUMP: It's going to be good.

As Thrush mentions, Democrats are adamant about protecting Davis-Bacon because of the law's importance to their labor union allies. That puts Trump in a bit of tough spot.

Trump may have a hard time convincing conservative Republicans to vote for a $1 trillion infrastructure spending plan, considering that many members of the GOP's congressional majority won their seats by railing against the Obama administration's stimulus and promising to run a more thrifty federal government. Repealing Davis-Bacon rules might help earn Republican votes for an infrastructure spending bill because they could argue (rightly) that doing so would stretch those dollars further.

But abandoning David-Bacon rules would probably cost Trump the support of many, if not all, Democrats who might otherwise support an infrastructure spending plan. The White House doesn't necessarily need Democratic votes on infrastructure (or anything, for that matter, as long as they don't lose a significant chunk of Republican votes like they did on health care), but the Trump administration has been talking about the infrastructure plan as a bipartisan lift that could generate much needed goodwill between congressional factions—because nothing generates good will in Congress like spending lots of money, of course.

The politics of Davis-Bacon might complicate any Trump administration infrastructure plan, but repealing the 85-year old wage mandate makes good sense.

As I wrote in a pre-inauguration preview of how the incoming Trump administration could help states better manage their own affairs, repealing Davis-Bacon (which affects many state-funded infrastructure projects too, since most are partially financed with federal money) would lower the cost of construction and let current infrastructure spending be more productive, even without a new stimulus from Washington. James Sherk, a fellow in labor economics at the conservative Heritage Foundation, has found that repealing Davis-Bacon would save taxpayers $11 billion annually.

If the political and economic arguments aren't enough to convince you that Davis-Bacon should go away, there's the historical argument too. Damon Root has previously written about the awful, racist justification for creating the law in the first place.

It was introduced in response to the presence of Southern black construction workers on a Long Island, N.Y.. veterans hospital project. This "cheap" and "bootleg" labor was denounced by Rep. Robert L. Bacon, New York Republican, who introduced the legislation. American Federation of Labor (AFL) president William Green eagerly testified in support of the law before the U.S. Senate, claiming 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 powerful AFL affiliate that banned black workers from its ranks) told the House of Representatives that Algernon Blair's crew of black workers were "an undesirable element of people." The bill's co-sponsor, Republican Sen. James Davis of Pennsylvania, was an outspoken racist who had argued in 1925 that Congress must restrict immigration in order "to dry up the sources of hereditary poisoning."

The result was that black workers, who were largely unskilled and therefore counted on being able to compete by working for lower wages, essentially were banned from the upcoming New Deal construction spree. Davis-Bacon nullified their competitive advantage just when they needed it most.

Davis-Bacon is a blatantly protectionist rule that advantages a politically-connected special interest (labor unions) and drives up the cost of almost anything the federal government builds. Abandoning it should be a no-brainer for an administration that has promised to make government run more efficiently, reduce the power of special interests, and rebuild America's infrastructure.

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  1. What does Trump have to say on Mavis-Beacon?

    1. That he grabbed her by her pussy?

      1. He grabbed her by the QWERTY.

        1. And she inkoved Dvorak privilege.

          1. Czech your privilege, dude.

    2. I love that answer. Trump has no fucking idea what Davis-Bacon is. I’m sure Obama and Bush might not have either if blindsided at an interview, but Trump’s answer is pretty funny. No fucking idea. This could go either way. I would think Trump would get rid of it, but you never fucking know with the guy.

      1. I don’t know about that. As a big time developer I would think he would be very familiar with that act. He may know it by a different name though. If you said to my boss the Davis Bacon Act you’d get a blank stare but if you said the Fucking Union Wage Law he would know it right away.

        1. Yeah, this. I have never heard of the law in question but everybody knows the reason that public infrastructure is always decades late and billions over budget.

          1. davis bacon is utter horseshit and if trump really were worth a shit he would use this as a springboard to go after unions in general. He will not because he respects the nationalistic “made in the USA”, “took our jobs crap” that got him elected. And he apparently thinks a trade war via tariffs and protectionism can work.

            If he had balls he would:

            Remove all federal union protections for collective bargaining(extortion rackets)
            Outlaw government worker unions
            Eliminate the FED education department
            EPA
            HUD
            NEA
            Dept of Energy
            DHS
            I’m sure I am missing plenty but it is going to be big, believe me.

      2. If you’re in construction, especially on the management end, you know Davis-Bacon. On the job I’m currently on we’ve literally spent hundreds of thousands, if not millions, making up the difference between CA Prevailing Wage rates and DBA rates because of an error in the bid docs.

        It’s not some ‘meh’ law that only policy wonks know – it’s a plague on the industry. If Trump doesn’t have a pre-existing strong opinion on it, I would be surprised.

        1. Although by “plague on the industry” I should clarify that the plague is really on the taxpaying public. It really doesn’t hurt contractors, and greatly benefits unions.

          You should figure that about 10% (or more) of the construction cost of any public project is essentially going straight to the unions via dues on inflated wage rates.

          1. It does hurt competing contractors in the bidding process. In the south where unions are practically non-existent in construction, small, nimble contractors can hardly compete for federal jobs because they have to inflate their pricing via davis bacon. If is inefficient because it is a bogey.

            1. nimble contractors can hardly compete for federal jobs because they have to inflate their pricing via davis bacon

              The risk is the opposite of that.

              If you’re a small, non-union contractor bidding on a public job, you’d damn well better be aware of Prevailing Wage and DBA, because if you aren’t you’re in serious danger of getting the job, and having to pay wage rates you didn’t bid.

              The only other way contractors are affected is in that profit margins are squeezed by the labor rates, since the “sticker shock” effect in public construction is rather pronounced. You have to bid some pretty tiny margins – but on the up side those margins are on pretty big price tags, so it probably evens out in the end.

              1. Back in the day, my dad would bid on public contracts and stick to the letter of the RFA to get in a low bid.

                Then when the city was embarrassed by the fact they had agreed to minimum wages, he would let them amend it to a higher dollar amount. A dollar amount that was actually more consistent with his typical wages.

                I assume different opportunities exist in the modern era.

                1. I assume different opportunities exist in the modern era.

                  Yeah – he would never get away with that today. At least not in CA. The wage rates are published, so they don’t want to hear “my bid assumed minimum wage.” That’s an e-ticket to bankruptcy.

                  But yes, the system can still be gamed – generally by fudging the number of reported hours worked.

              2. And tbe government usually pays and usually on time… Unlike say a Trump who makes a habit of not paying the remainder once docs are delivered.

          2. That doesn’t make a lot of sense to me. Maybe you are saying that if it weren’t for Davis-Bacon, non-union labor would get the gigs. I initially read that as paying union wages to non-union workers somehow sends money to the union.

            1. It doesn’t shut out non-union contractors, but the vast majority of bidders on any even decent-sized public project are going to be union, for various reasons, one being that if you’re going to pay that much for your labor, you’re often actually better off hiring from the union hall. Going with non-union guys can be a crap shoot.

              Unions serve a real purpose in construction, and leaving aside the extent to which they are given advantages by state laws, there are all kinds of good reasons for relying on unions for labor (them taking care of training and benefits for workers you only need intermittently being a big one).

              Not that your point is invalid ? lots of agencies in CA have an additional bid requirement that you use union labor (“Project Stabilization Agreements” are the currently fashionable name), just in case the Prevailing Wage law doesn’t funnel you into doing so, anyway.

    3. She’s just his type.

  2. American Federation of Labor (AFL) president William Green eagerly testified in support of the law before the U.S. Senate, claiming that “colored labor is being brought in to demoralize wage rates.”

    “Colored* Labor” was my nickname in college.

    *Because I demoralized everyone with my chartreuse tackle.

    1. “If it ain’t chartreuse, it ain’t no use.”

      That’s what they say on the Chesapeake.

  3. “Prevailing wage” probably means prevailing wage; the wage paid to most workers in an area. No need for the politics of repealing the act. Just use the prevailing wage. Which is NOT the highest union wage in the area, it is the most prevalent wage. GO BUREAUCRATS!

    1. The “prevailing wage” is whatever the employer has to pay to get enough competent workers to get the job done.

      1. There just isn’t enough Mexicans around here. We have to hire the Irish.

        1. The Irish? Geez. Talk about your ” sources of hereditary poisoning.”

        2. The Irish? Geez. Talk about your “sources of hereditary poisoning”.

      2. In the context of government infrastructure jobs – which are all union – we are in fact talking about whatever wage the union says they want.

        1. No they aren’t all union jobs. My families HVAC and Plumbing company does work for HUD and pay prevailing wage rates. We are a merit shop. I know several merit shops that do work for the government.

          Fun Fact: We had one project we were bidding on that was financed by a union but they couldn’t do the work because their labor number was too high. We didn’t get the job because our number was too high.

          1. We had one project we were bidding on that was financed by a union but they couldn’t do the work because their labor number was too high.

            That’s pretty rich.

            “Our labor refuses to be exploited by our project. Your people better do it.”

      3. I think a legitimate point of that regulation would be that the bid needs to include realistic labor rates. So, rewrite the regulation to achieve that goal instead of making sure that no one can underbid the unions.

    2. Prevailing wage generally does mean union wage because of the way jobs are defined. They survey big construction projects – not residential/roofing jobs. For skilled trades, they define ‘carpenter’ as a journey-level carpenter (not just a guy who pounds nails). Non-union employers usually stuff as many of their skilled functions into supervisory jobs as well so they don’t have to pay overtime either – those are excluded in DBA surveys. ‘Laborer’ and ‘truck driver’ are usually the only jobs that have a lot of non-union matches but even there the end results often differ (a guy who drives a panel van ain’t gonna be matched with a semi-driver or a cement mixer driver)

    3. “Prevailing wage” probably means prevailing wage; the wage paid to most workers in an area.

      No. It should, but it doesn’t. I don’t know how DBA rates are determined, but CA Prevailing Wage Rates are “negotiated” between the unions and the Dept. of Industrial Relations, which essentially means that unions issue the rates. In my experience, DBA rates are comparable with CA’s, if not higher (but my experience involves paying when the DBA rate is higher, not when it’s lower, so it may be skewed).

      In practice “prevailing wage” doesn’t mean “the rate that dominates in the local market.” It means “higher than the highest wage the local market offers.” It creates tremendous problems when you have people on ‘time and materials’ (no pre-negotiated proposal – just workers turning in their tags at the end of the day for payment), because when the workers are on a Prevailing Wage job they go really slow, not wanting to rush back to market-rate jobs.

  4. Behind crumbling infrastructure and the inability to perform repairs and upkeep is bureaucratic and union purple tape.

    What a surprise.

    1. Just proof they need more funding. /sarc

  5. end the public sector unions while you’re at it

  6. Davis-Bacon is not a racist law. The proof is simple:

    “Racism” is anything a Liberal/Progressive doesn’t like

    Liberals and Progressives like Davis-Bacon

    Thus, OPPOSING Davis-Bacon is what makes you a racist.

    Well, that, plus breathing. That’s pretty racist too. Did you build that air? Check your privilege!


  7. “That law, which dates back to 1931, requires all workers on federal projects worth more than $2,000 to be paid the “prevailing wage,” which usually means the local union wage rate.”

    So, literally all federal projects then? They might as well have just written that down. I imagine even a Federal toilet installation costs more than $2,000. I suppose they didn’t include any type of inflation adjustment to that law.


    1. “But abandoning David-Bacon rules would probably cost Trump the support of many, if not all, Democrats who might otherwise support an infrastructure spending plan.”

      I’m also not entirely sure how many Democrats still care about private sector Unions over their various ethnic and sexual division groups. I’m sure there are still plenty of them, but this last national election has me wondering about that. This should be an interesting litmus test regarding what Trump actually believes as opposed to what comes out of his mouth. The same goes for how pro-union the Democrats still are in reality.

      1. A lot of Democrats still dream of getting that “union paycheck” even if those jobs are disappearing. So, I expect them to stay pro-union to the bitter end.

        1. So do most Trump voters. Just because Reason writes an advice article saying ‘destroy unions’ doesn’t mean Trump is gonna rely on Reason-types to figure out what his base wants. I’m pretty sure not one Trump voter voted for him cuz ‘we just want to work at illegal wages too like Mexicans. Why haven’t we been listening to Reason?’.

      2. They weren’t interested in 2009 when they eliminated a ton of projects/spending on infrastructure because a)they weren’t ‘shovel-ready’ or b)they were physical labor projects (ie more men than women – and hence not part of the Dem base).

      3. It’s odd how the Democrats went all-in on identity politics in 2016 – to a much greater and more explicit extent than Obama or Kerry or Gore had – and ended up losing across the board, and are reacting by doubling down.

        They openly assumed that everyone in America would vote based primarily on which identity group they were assigned to except for white people, who would continue to split their vote. After seeing the election results, they should have updated their “Rising Electorate” game plan to hold off on the balkanization until all the white folks die off. But when you only got one note, you have to play it at every concert.

        1. They assumed that americans would do what they are told. The only mistake they made was running that dried up nasty cunt who lies if she’s breathing.

          The sheep would have come out to vote if DC dems weren’t so stupid and beholden to the dinosaurs and the skeletons the Clintons must have on everyone.

          American are idiots in general and when the next Castro is trotted out in 4 years, I’m afraid the he will make Obama look like a smart business man in comparison.

      4. The Dems are Government Union. Not Labor Union.

        State and Federal workers. That’s why the stimulus money was largely siphoned into the paychecks of redundant state government workers.

        1. Around these parts they are both.

  8. I think he should exercise the art of the deal.

    First propose repealing Executive Order 10988.

    Then bargain down to repealing Davis-Bacon, then after that’s done, go ahead and repeal Executive Order 10988 anyway.

    Good and hard baby, good and hard…

  9. I just want to know if Obama spied on Davis-Bacon and when I should expect another brilliant tweet from General Cheeto.

  10. Davis-Bacon was passed because minorities, mainly blacks, were willing to work for less than union wages, thus undercutting unions, which to this day remain mainly white. If the feds were forced to pay union wages, they would go ahead and hire union workers, thus institutionalizing blatant discrimination.

  11. Davis-Bacon was passed to keep minorities from underbidding unions, which remain all white to this day. And yet lefties support it.

  12. The fact is if Davis-Bacon is repealed, it will hurt those that can least afford it. These contractors will pay the lowest amount they can get away with and that’s a fact. Wages for the low-middle income have stagnated compared to the massive amounts these CEO’s and their executives make.

    1. Did you know that an unskilled laborer on a Prevailing Wage job grosses about $70/hr?

      This is largely because no matter how high up we ratchet the wages of tradespeople, people like you will never believe that they are not being exploited.

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