The Libertarian

Vin Suprynowicz
Website: Liberty Book Shop
On Sept. 8, President Bush signed an executive order suspending the Davis-Bacon Act and allowing contractors to pay actual going rates to rebuild flood-stricken New Orleans.

The AFL-CIO immediately began squawking. “Employers are all too eager to exploit workers,” thundered labor boss John Sweeney. “This is not a time to make this easier.” Taking up the war cry on CNN -- which may or may not stand for “Collectivist News Network” -- host and commentator Lou Dobbs, who appeared to be at risk of having a major neurologic mishap as he thundered his increasing incredulity, insisted Republicans couldn’t be serious about this suggestion to cut federal red tape in order to make a faster start at rebuilding.

Let’s leave aside for the moment the question of whether all of New Orleans should be rebuilt on its present, sunken site at federal expense -- especially if private insurers prove wary of embracing the risk of another flood without further, hidden, federal rate subsidies.

What seemed close to driving Mr. Dobbs to hydrophobia was a proposal to suspend the federal Davis-Bacon act, which requires all workers on federal construction projects to be paid not merely the federal minimum wage, not merely the wage at which men are willing to work at the locale in question, but a much higher arbitrary wage set with input from the construction unions and euphemistically dubbed the “prevailing wage.”

The act specifically allows presidents to waive and suspend its provisions in times of economic hardship or emergency. The current president’s father suspended its demand that federal contractors pay far-above-normal wages during the rebuilding after Hurricane Andrew. President Nixon suspended Davis-Bacon for a month in 1971 to ease its inflationary pressure. Even the saint of modern “Progressive” socialism, FDR, suspended Davis-Bacon for three weeks at the start of the New Deal.

The act which requires this extra waste of tax funds on federally funded projects was introduced by a Long Island congressman in 1931. Upset that the policy of awarding federal contracts to the low bidder had allowed “bootleg” southern labor to build a veterans hospital in his district in the 1920s, Long Island Congressman Robert L. Bacon and other sponsors specifically stated a major purpose of their 1931 federal bill was to block “cheap colored labor” from taking jobs from local white workers.

This racist law worked just as intended, and it has continuing to perform precisely the same function, ever since.

Proponents keep throwing around the assertion that a “prevailing wage” law would merely require contractors to pay an “average” wage of $9 an hour to workers rebuilding New Orleans. In fact, a similar law here in Nevada required in the year 2000 that elevator constructors be paid $51.17 an hour -- even though the overwhelming majority of hours reported for elevator constructors in Clark County in 1998 were paid at $38 per hour -- and the highest wage reported was $45.46.

Nevada’s “baby Davis-Bacon law,” which sets wages by polling labor unions and a few contractors, the same as the federal system, required that plumbing foremen be paid $43.61 per hour in the year 2000 -- even though no plumbing foreman surveyed was actually paid more than $40.86 per hour in the base year of 1998.

Think many inexperienced black New Orleans laborers are going to find work at those rates? Let us hear somewhat less of this “nine dollars an hour.” Suspending this racist law would impose “the penalty here obviously against the very people who need the most help,” Mr. Dobbs told his CNN viewers, after announcing “There’s outrage tonight over a presidential decision today that could hurt Gulf Coast workers looking to rebuild their lives and earn a living.”

In fact, suspending Davis-Bacon would make it at least somewhat more likely that Katrina survivors -- any that are actually seeking work -- might land some of those construction jobs.

Instead, if faced with a federal requirement that they pay inordinately high wages, the contractors chosen to rebuild the sunken city would be foolish to hire local workers whose lesser training or experience makes their time less valuable, per hour. Instead, workers whose white complexions will not be as close a match for the local populace would far more likely be brought in, in hopes of cutting the losses imposed by this ancient, wasteful, racist sop to the labor unions.

Just as Congressman Bacon intended, all those years ago.