Highway Robbery: The Davis-Bacon Act Increases Costs, Decreases Employment

Mar 31 2011

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  • The Davis-Bacon Act requires that all federally-funded projects worth more than $2,000 must pay workers the “prevailing wage,” which is typically set equal to the local wage paid to more skilled union workers.
  • In addition to paying an average of 22 percent above market wage rates, the Davis-Bacon Act requirements bog down contractors with extra paperwork and compliances which can lead to unanticipated and costly delays.
  • Today, excessive project costs are particularly straining on the Highway Trust Fund.
  • For highway construction, the average Davis-Bacon wage paid in the counties sampled was 34 percent higher than the average Occupational Employment Statistics wage reported by BLS.
  • Instead of taxing individuals more to support unnecessarily costly highway projects, repeal of the Davis-Bacon Act would reduce costs for federally-funded highway projects, increase construction employment, and help improve the solvency of the HTF.

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