DAVIS-BACON ACT TALKING POINTS
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The Davis-Bacon Act prevents competition for federal construction contracts from artificially
depressing local labor standards. Nonetheless, critics of Davis-Bacon argue that the government
should use its bargaining power to cut local wage rates—by as much as 50 percent. Studies show,
however, that such a race to the bottom does not substantially cut public construction costs, but
worker skills, experience and motivation drop dramatically.

Subverting prevailing wage laws often leads to shoddy construction and substantial cost
overruns. Under prevailing wage laws, contractors are forced to compete on the basis of who can
best train, best equip and best manage a construction crew…not on the basis of who can assemble
the cheapest, most exploitable workforce—either locally or through importing labor from elsewhere.

A Davis-Bacon wage usually is not a “union” wage. The Davis-Bacon prevailing wage is based
upon surveys of wages and benefits actually paid to various job classifications of construction
workers (e.g. Ironworkers) in the community, without regard to union membership. According to the
Department of Labor, a whopping 72 percent of the prevailing wage rates issued in 2000 were
based upon non-union wage rates. A union wage prevails only if the DOL survey determines that
the local union wage is paid to more than 50 percent of the workers in the job classification.

Higher wages and skills result in greater productivity and lower cost. Productivity is so much
greater among high-wage, high-skill workers that projects using such workers often cost less than
those using low-wage, low-skill workers due to repairs, revisions and lengthy delays. Opponents
who claim that the government could save billions by eliminating Davis-Bacon protections ignore
productivity, safety, community development and other economic benefits which contribute to the
real cost-effectiveness of Davis-Bacon. A study of 10 states where nearly half of all highway and
bridge work in the U.S. is done showed that when high-wage workers were paid double the wage of
low-wage workers, they built 74.4 more miles of roadbed and 32.8 more miles of bridges for $557
million less.

Driving wages down will not help to balance the federal budget. It is essential to account for
the spin-off economic benefits of maintaining prevailing wages. When workers’ incomes go down,
they have less money to spend purchasing goods and making investments. When businesses close
or cut back as a result, tax revenues to the federal government decline and social expenditures rise.

The Davis-Bacon Act improves local economies. Federal construction projects help local
economies, and so do prevailing wage laws. A study done by Lionel Richman, LL.B., N.A.A. and
Julius Reich, J.D. showed that in San Bernardino, California, the prevailing wage law generates
benefits to the community that are 2.4 times the amount spent on the construction project. That’s
because workers spend part of their income in local shops and restaurants and pay local taxes,
which re-circulates throughout the economy.

Davis-Bacon Results in Increased Productivity. Construction workers in states with prevailing
wage laws are more productive. Census of Construction data show that value added per worker in
states with prevailing wage laws is 13% to 15% higher than in states without prevailing wage laws.