Suspending Flawed Policy in Katrina’s Wake

September 13, 2005 0

Hurricane Katrina’s devastation is throwing a spotlight on federal regulations that could get in the way of reconstruction. Perhaps the biggest federal roadblock is the Davis-Bacon Act. It requires that contractors pay so-called “prevailing wages” on federally-funded construction projects, which are often higher than market-based wages in a given area. Enacted during the Great Depression, its real motive was to keep non-unionized African American workers from competing with white-only unions.

Today, Davis-Bacon still favors “disproportionately white, skilled and unionized construction workers over disproportionately black, unskilled and non-unionized construction workers.” It also raises construction costs to taxpayers.

Fortunately, Davis-Bacon can be suspended in times of national emergency. President Bush did just that last Thursday, telling Congress that the suspension “will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals.”

Predictably, the president’s action was quickly attacked by politicians and union bosses who believe that only skilled union labor should be used on government projects, no matter how grave the circumstances and no matter how many lesser-skilled laborers are denied work on emergency rebuilding projects.

If suspending such flawed regulations helps people in times of emergency, we should consider suspending them permanently to benefit more people all the time.

Oregon has its own “little Davis-Bacon Act” which raises the cost and limits access to jobs on state-financed construction projects. We shouldn’t wait for an emergency here to scrap this faulty policy.

Steve Buckstein is senior policy analyst at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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