Contention Over Bush’s Suspension of Davis-Bacon

In an effort to clear the way for the Gulf Coast reconstruction effort President Bush took advantage of a rarely used Presidential power yesterday:

President Bush yesterday suspended application of the federal law governing workers’ pay on federal contracts in the Hurricane Katrina-damaged areas of Alabama, Florida, Louisiana, and Mississippi.

On the surface the rationale for the President’s actions in suspending this prevailing wage law is simple; allowing contractors in the Hurricane stricken areas to pay laborers below the federally mandated minimum will make it more attractive for businesses to get involved in the reconstruction effort thereby created thousands of jobs for those left unemployed by the disaster. Unlike the World Trade Center post 9/11, whose reconstruction has been bogged down in NY City political wrangling, the Gulf Coast reconstruction effort must happen as soon as possible.

Back on September 1, just days after Katrina made landfall, the Wall Street Journal editorial pages called for Bush to quickly sweep away what it referred to as “impediments to a speedy reconstruction effort.”

The Bush Administration would also be well-advised to remove all federal impediments to a speedy reconstruction effort. One such impediment is the Depression-era Davis-Bacon Act, which requires the government to pay prevailing local wages in federal construction projects. The act effectively excludes non-union workers and contractors from reconstruction projects while adding billions in costs.

Being a business person, I can understand the logic behind these actions but the question still remains as to whether it is indeed the right thing to do. On the one hand, suspending Davis-Bacon will certainly make it more attractive for business owners since they can effectively expect to make a considerably higher profit margin on any work they do in the area. But what about the workers? The suspension of Davis-Bacon will certainly mean more jobs for low wage laborers but most certainly at a very low pay scale.

There is no question the prospect of this suspension has ticked off the labor unions.

AFL-CIO President John J. Sweeney denounced the Bush announcement as “outrageous.”

“Employers are all too eager to exploit workers,” he said. “This is no time to make that easier. What a double tragedy it would be to allow the destruction of Hurricane Katrina to depress living standards even further.”

Davis-Bacon has never been a popular law among American Conservatives, as a matter of fact in researching the history of this law it is nearly impossible to avoid calls from every corner of the right for it’s permanent removal. The prevailing wisdom on the right is that Davis-Bacon is either racist or unfair to small business. Of course there is no lack of effort in the form of talking points from the left to try and refute these claims either.

In my opinion we can expect this action by the President to benefit three groups; business owners, illegal/migrant workers and anyone poor or desperate enough to take work at the same pay rates of the former. Will this speed the reconstruction efforts? Will it help out the people of the Gulf Coast? Only time will tell.

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