AWF Supports Repeal of Davis-Bacon
AWF Supports Repeal of Davis-Bacon Act
Government Wage Control is Fiscally Irresponsible
Washington, D.C. – The Alliance for Worker Freedom (AWF) urges Congress to repeal the Davis-Bacon Act as it requires that any federal construction project in excess of $2000 be paid using the “prevailing wages” of the area in which in the construction is taking place. In practice, this means that union-shop construction companies get to set the rate for any federal project which directly interferes with free-market price setting.
Economists estimate that the Davis-Bacon Act covers 20 percent of all construction projects, and 25 percent of all construction workers. It imposes over $1 billion in extra federal construction costs and over $100 million in administrative burdens year-in and year-out. Various estimates have put the added Davis-Bacon premium at anywhere from 25 percent to 33 percent of the cost of every federal construction project.
Bottom-line, the Davis-Bacon Act is a Depression-era wage subsidy law enacted in 1931. Its time has run out. In the 21st Century, especially in the new competitive global economy, it is essential to allow the free-market system determine wages. Command-and-control government regulations do not foster a free and open society. Rather, further regulatory policies will result in a stagnation of the labor market with the benefits reaching only a few special interests.
Once again, Alliance for Worker Freedom encourages the repeal of Davis-Bacon, as this directly interferes with free-market enterprise and the basic fundamentals of a market-driven economy. No responsible legislation should attempt to control and define wages.
