Anyone involved in prevailing wage contracting knows that there is no better example of Government intervention in free markets than the Davis-Bacon and Related Acts. Regardless of whether you believe that the underlying reasoning and justification (needs!) for Davis-Bacon are sound, it doesn’t change the fact that prevailing wage contracting is a case of government officials (bureaucrats!) setting the prevailing wage contribution and benefit rates for workers who will be working on government contracts. Stated another way, Davis-Bacon fringe benefit contribution requirements is a case of the Government telling private businesses how much to pay their employees with public money.
Thus, it seems as though both wings of the Republican party should be up-in-arms over Davis-Bacon, agitating for its repeal. To the ideological, small-government wing, you would expect that they would want the government out of the construction market on, well, ideological grounds: namely, that the Government shouldn’t be meddling in the free-market by making prevailing wage determinations. To the anti-waste, fiscal conservative wing, you would expect that they would want an end to Davis-Bacon wage determinations because prevailing wage means that public works projects are more expensive as a result of higher wages paid to construction workers. But, of course, there is no such agitation for ending prevailing wage. In fact, the Republican Party is all but silent when it comes to Davis-Bacon. And while there are no doubt countless reasons why, one that bears consideration is this – prevailing wage (or open-shop) contracting is a powerful hedge against unions. Think about it. The principal justification for union organizing (and the reason for their creation in the first place) is that the market doesn’t look after workers; as a result, so the union argument goes, only a union can guarantee higher wages, and a better standard of living, for workers. But with Davis-Bacon, the union isn’t setting the prevailing wage – the government is.
So, regardless of what you think about the value and importance of unions, it doesn’t change the fact that Davis-Bacon undermines the need for construction workers to join them because the Government has taken on the role of their protection. Which means that general contractors (and their subs) can offer construction workers higher pay rates (better standards of living!) while insuring profit margins. And better-paid workers have less motivation to unionize. And less motivation means more pressure to maintain union ranks. Which all adds up to pressure on the unions. And, as everyone knows, the Republican Party is no friend to the unions. So, the next time you don’t hear a Republican candidate criticize a prevailing wage determination ask yourself – by supporting (or, not opposing, as the case may be) prevailing wage contracting through the Davis-Bacon and Related Acts, is the Republican Party quietly waging war on the unions; and, if they are, is it working? Tell us what you think.
Stay tuned for our next post – the Democrats’ dilemma of prevailing wage