Michael Patterson

Instructor Freedman
Economics 210-04
23, February 2015
Project Paper
Executive Summary:
The Davis-Bacon Act could possibly be the worst law the United States still
enforces. It is mind-blowing that this is still a law and has not yet been repealed. In this
paper I will demonstrate how and why the Act was created in 1931. Also I will discuss
the fact that it was and still is racist. All of the effects that this Act has on people
financially and socially is staggering. After all the research I have done on this topic, I
can truly say that I agree with a lot of people when saying that the Davis-Bacon Act
should be repealed, and I do not know why is has not been.
In 1931, the Davis-Bacon Act was passed and it said that private contractors
have to pay prevailing wages to employees on construction projects receiving more
than $2,000 in federal funding (Frantz 1). A prevailing wage is an hourly wage, usually
with benefits and overtime. This law means that instead of a contractor paying the
lowest possible cost for a job they have to pay artificially inflated wages. Some
examples of jobs that fall under this law are building bridges, repairing roofs, and
painting line dividers on roads (Alexander 1).There are many topics that can be
discussed about the Davis-Bacon Act. Some of them are the origin of the law, the fact

that it is racist, the effects it had, the cost of enforcing the law, and all of the attempts to
repeal it.
The origin of the Davis-Bacon Act and the fact that it is racist goes hand and
hand. Before the act was passed the construction industry provided wonderful
opportunities for blacks, especially in the South. In at least six southern cities, more
than 80 percent of unskilled construction workers were black (Frantz 1). The DavisBacon Act came into play in 1927 when a contractor from Alabama won a bid to build a
Veterans Bureau hospital in Long Island, New York. He hired a group of black workers
from Alabama to work on the project. The Representative of Long Island and the coauthor of the Act, Robert Bacon, did not like the idea of black workers from Alabama
working on a federal project in New York. In addition to his anger toward this issue he
introduced H.R. 17069, A Bill to Require Contractors and Subcontractors Engaged on
Public Works of the United States to Comply with State Laws Relating to Hours of Labor
and Wages of Employees on State Public Works (Bernstein 3). Over the next four
years Bacon submitted 13 more bills, and then finally in 1931 the Davis-Bacon Act was
passed. It was passed at the height of the depression, with the help of the American
Federation of Labor (Frantz 2).
With all of the progress that this country has made with racial equality it is
surprising that the Davis-Bacon Act is still around. The Act is considered the last
element of the infamous Jim Crow Laws. The Jim Crow Laws were racial segregation
laws passed after the Reconstruction period (Pilgrim 1). The main reason for passing
the Davis-Bacon Law was to prevent non-unionized black and immigrant workers from
competing with unionized white workers. A lot of white union workers were angry that

black workers were traveling to the North in search for jobs in the building trades and
undercutting white wages. Representative John J. Cochran of Missouri said that he
had received numerous complaints in recent months about southern contractors
employing low-paid colored mechanics getting work and bringing the employees from
the South. Another Representative who supported the Davis-Bacon Act, Clayton
Allgood, complained of cheap colored labor that is in competition with white labor
throughout the country. These quotes show how this act was passed and what they
people were thinking of when they were trying to justify it (Bernstein 3). The Act is very
harmful to minorities because the construction industry pays extremely well for
beginners.
Throughout the years the Davis-Bacon Act effected many things, including
people. It covers almost 20 percent of all construction projects in the United States and
affects more than 25 percent of all construction workers in the nation at any given time
(Frantz 1). The Act makes it difficult for low-income workers to get jobs, because
contractors are forced to hire skilled tradesman, who are primarily all white. Only 13.2
percent of the private construction workforce is unionized nationally, so that means the
Davis-Bacon Act discriminates against 86.8 percent of construction workers (Alexander
1). Before the Davis-Bacon Act, unskilled construction workers had one big advantage
over their unionized competitors. This advantage was that they were willing to work for
less money, but after the Davis-Bacon Act this advantage was gone (Root 1). It also
does not allow for helpers, or semi-unskilled workers, on federal jobs. This ruined the
chance of untrained people performing a job that they could do safely and successfully,
and it also slowed down the productivity of the projects (Wood 1). Currently a very

severe problem has occurred with the Davis-Bacon Act because it does not allow the
ability of rural and inner-city laborers and contractors to work on projects in their own
communities. This rule is quite ironic because this was what the act was trying to
prevent (Bullock 4). During a debate about the Davis-Bacon Act, Robert Bacon said,
Members of Congress have been flooded with protests from all over the country that
certain Federal contractors on current jobs are bringing into local communities outside
labor, cheap labor . . . and giving rise to the complaint by local labor that the
government is in league with contract practices that make it possible to further
demoralize local labor conditions." Not only does this Act have social cost, it also has a
huge economic cost.
During the long history of the Davis-Bacon Act the economic cost to enforce it
has varied. It has been described as a rip off and a burden to the American taxpayers,
while lining the pockets of organized labor (Root 1). In 1994, it was reported that the Act
had at least $1 billion in extra federal construction costs and $100 million in
administrative expense each year. It also suggest that if it was repealed 31,000 new
construction jobs would be created. Also this increased the unemployment rate, mostly
for African Americans. In the first quarter in 1992, the black unemployment rate was
14.2 percent, even though the overall national rate was only 7.9 percent (Frantz 3). In
1995 the question was asked again, how much is the Davis-Bacon Act costing the
United States? Senator John Chafee, chairman of the Environment and Public Works
Committee, says the Act added $800 million in cost to federal projects. Also the General
Accounting Office estimates the Davis-Bacon Act expands the cost of federal
construction by as much as 15 percent, which is equivalent to $3.1 billion over five

years (Wood 1). The amount of money that is put into this Act is ridiculous, especially
since it is known how flawed is really is. As of 2010, research by Suffolk University
economists proved that the Davis-Bacon Act has raised the construction wages on
federal projects to 22 percent above the market rate. Also a discovery by James Sherk
of the Heritage Foundation verified that by repealing the Act it would save taxpayers
$11.4 billion in 2010 alone, and by suspending it government contractors could hire
160,000 new workers at no additional cost (Root 1). According to another study at the
Suffolk University in 2008, the Davis-Bacon Act sends an annual bill to taxpayers for
about $8.6 billion. Also the impartial Congressional Budget Office estimates that repeal
would save $12.7 billion over ten year (Alexander 2). Since the Act has been around the
amount of money that is being wasted increases year by year. By repealing the DavisBacon Act our country could save tons of money, and it is baffling why it still has not
been repealed.
It is not that there was not any attempts to repeal the Act, because there were
many changes committed to it. For instance, in 1982 the Department of Labor made
changes that made it easier for open shop firms to compete for contracts covered by the
Act. The department changed the idea of prevailing wages from the old 30 percent rule
to a new 50 percent rule. Because of this change, and the fact that there are less
unionized workers than years ago, the Davis-Bacon Act wage rates are set according to
union rates only in highly unionized cities (Bernstein 5). In the same year the
Department of Labor also made a change that permitted unskilled helpers to work on
Davis-Bacon projects. This rule was used mostly to give opportunities to minorities and
women. The rule went into effect on February 4, 1991 and defines a helper as a

semiskilled worker who works under the direction of, and assists journeymen. This rule
does not eliminate all of the racism from the Act but it does give black construction
workers some benefit (Bernstein 6). In 1993 Senator Hank Brown support the idea to
repeal the Act and a similar bill was introduced in the House by Representative Tom
DeLay. However, both of these proposals failed to attract major support (Frantz 2).
According to the Institute for Justice the Act violates the Fifth Amendment because this
amendment guarantees equal protection. It also violates the Fifth Amendment because
it takes away the right for people to pursue employment opportunities. Because of these
violations the court could void the Davis-Bacon Act (Frantz 4). More recently the Obama
administration extended the Davis-Bacon Act via the American Recovery and
Reinvestment of Act of 2009, also known as the stimulus bill. Because of this bill the
Davis-Bacon Act now applies to all projects funded directly by or assisted in whole or in
part by and through the Federal Government (Root 2).
In 1995, when Lamar Alexander was running for president, he argued to repeal
the legislation that extended Davis-Bacon provisions to construction to school
construction and renovation. He said, That means a principal in Moline who wants to
hire a contractor to rewire his school for new computers must pay the prevailing union
wage rather than getting the job done for the lowest cost. Its a big favor for the unions,
but no favor at all for school, efficiency, or economy. What he said twenty years ago is
still true today (Alexander 1). A report in 1979 by the General Accounting Office titled
The Davis-Bacon Act Should Be Repealed called the law unnecessary and said the
Department of Labor has not made a program to give accurate wage determinations
(Alexander 2). Now the question is, if so many people want it to be repeal and there are

so many reasons to repeal it, why has it not? The answer is organized labor. Organize
labor is not only working to preserve the law, but want to expand its coverage to include
work in the private sector. At a Senate hearing in 1995, while discussing the possibility
of repealing the Act, organized labors Ted Kennedy defended the law, wanting to
protect the higher wage scales (Wood 2). It is very surprising that the Davis-Bacon Act
is still around today, because of all the evidence there is for eliminating it.
Ever since the Davis-Bacon Act was passed in 1931, taxpayers and minorities
have suffered. This law prevents contractors from paying the least amount possible to
their workers. There are many interesting things that come with the Act. For example,
the origin of the law and the racial impact. Another part of it is all of the effects that it
had, including economical cost. The last thing that can be discussed about the DavisBacon Act is why it has never been repeal, even though many people want it to be. After
all of these years it time for the Davis-Bacon Act to be repealed, because there is no
reason it should still be around.

Works Cited
Alexander, Lamar. "Repeal Davis-Bacon, by Lamar Alexander, National Review."
National Review Online. N.p., 30 July 2014. Web. 14 Feb. 2015.
Bernstein, David. "The Davis Act Let Bring Jim Crow To An End." The Davis Act Let
Bring Jim Crow To An End. CATO Institute, 18 Jan. 1993. Web. 14 Feb. 2015.
Bullock, Scott, and John Frantz. "Litigation Backgrounder." The Institute for Justice.
N.p., n.d. Web. 14 Feb. 2015.
Christian, William M. "Citizens Against Government Waste America's #1 Taxpayer
Watchdog." Bringing Home the Davis-Bacon. N.p., Aug. 2014. Web. 14 Feb.
2015.
Frantz, John. "Davis-Bacon: Jim Crow's Last Stand." : The Freeman : Foundation for
Economic Education. FEE, 1 Feb. 1994. Web. 14 Feb. 2015.
Pilgrim, David. " What Was Jim Crow." Jim Crow Museum: Origins of Jim Crow. Ferris
State University, Sept. 2000. Web. 11 Feb. 2015.
Root, Damon. "Repeal the Davis-Bacon Act." Reason.com. N.p., 24 Mar. 2010. Web. 14
Feb. 2015.
Wood, David. "IT'S TIME TO DUMP DAVIS-BACON, IT ADDED $800 MILLION TO
FEDERAL PROJECTS LAST YEAR." New Hampshire Business Review 3
Mar. 1995: n. pag. MasterFILE Premier. Web. 14 Feb. 2015.