As the Occupational Safety & Health Administration marked its 40th anniversary at the end of April, agency officials pointed to an impressive two-thirds reduction in workplace fatality rates since 1970 (report, OSHA timeline, page 14).
While OSHA’s history is not without questionable inspection and citation tactics, the agency has helped standardize sensible worker protections in concrete production and construction. Rules defining confined spaces, machine guard conditions or hard hat zones have allowed many plant managers and site supervisors to conclude workdays reflecting on productivity and progress, not accidents. Better performing operators have benefitted by the agency making life difficult for competitors lacking worker safety commitment.
OSHA arose out of the Occupational Safety and Health Act, signed in late-December 1970. The agency’s 40th anniversary coincides with record federal budget deficits and greater scrutiny of how dollars from Washington, D.C., are spent. One aspect of federal construction spending subject to questioning is the Davis-Bacon Act, administered along with the OSH Act under the Department of Labor. If Labor officials had to document each act’s returns on taxpayer investment, they could show how one promotes while the other abuses the public trust.
The Associated Builders & Contractors (ABC) describes Davis-Bacon as an 80-year-old wage subsidy for employees of contractors and subcontractors on federally financed projects. With the federal government struggling to cough up dollars for building and transportation projects, all construction cost drivers are fair game.
Testifying on Capitol Hill last month at a hearing, “Examining the Department of Labor’s Implementation of the Davis-Bacon Act,” ABC representative Thomas Mistick (Church Restoration Group, Cranberry Township, Pa.) observed, “At a time of shrinking public construction budgets, the Act’s fundamentally flawed system is arbitrarily limiting the amount of construction that can be built by needlessly increasing project costs. Jobs have been lost, businesses have closed and taxpayers are getting four buildings for the price of five because of this broken process.”
Mistick told House Committee on Education and the Workforce Subcommittee on Workforce Protections members how Davis-Bacon “hinders economic growth, increases the federal deficit, and imposes an enormous paperwork burden on contractors and the federal government.” The answer to those problems is to repeal Davis-Bacon, he added, “and let the market set acceptable wage rates through open and competitive bidding.”
A new Government Accountability Office (GAO) report notes how Labor’s Davis-Bacon survey process suffers from a lack of transparency in how published wage rates are set and contains data errors regarding the number of employees and hourly and fringe benefit rates. “The Department has repeatedly issued wage determinations vastly inflated above rates seen on private sector construction projects,” Mistick told lawmakers.
Among other outspoken Davis-Bacon critics is George Mason University Professor Walter Williams. In “Congress’ Insidious Discrimination,” he traces the act from its shameful roots—sponsors eager to protect white contractors—to its current role as a “super minimum wage” distorting a free market for federal construction services.
Long before the GAO tracked survey problems plaguing Davis-Bacon-bound work, Dr. Williams wrote how the act sees the Secretary of Labor illegally set a project’s ‘prevailing wage’ at a union or higher rate, regardless of the affected locality’s average wage. “If Davis-Bacon requires that any worker handling a hammer and a nail, for example, be paid $25 an hour, no contractor in his right mind is going to hire a worker with $10-an-hour skills and pay him $25,” he argued.
The math lesson here: OSH Act-guided workplace safety + free-market principles – Davis-Bacon wage inflation = Improved taxpayer ROI.