[Congressional Record Volume 141, Number 153 (Thursday, September 28, 1995)]
[House]
[Page H9650]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                IT IS TIME TO REPEAL THE DAVIS-BACON ACT

  The SPEAKER pro tempore (Mr. Bunn of Oregon). Under a previous order 
of the House, the gentleman from Michigan [Mr. Hoekstra] is recognized 
for 5 minutes.
  Mr. HOEKSTRA. Mr. Speaker, I appreciate the opportunity to address 
the House this evening.
  Earlier today the Education and Economic Opportunity Committee did 
something that the General Accounting Office suggested we do in 1979: 
We began the process for eliminating the Davis-Bacon Act. Davis-Bacon 
is not right for America in the 1990's. It might have served a role in 
1931 when it was originally formatted, but today, it is an outdated 
law. It has to be changed.
  What Davis-Bacon requires is that workers on Federal construction 
projects be paid a wage at or above the level determined by the 
Department of Labor to be the prevailing wage in the area. Since 1937, 
the prevailing wage provision has been extended by many statutes to 
involve construction, financed in whole or in part by the Federal 
Government.
  In 1979, the General Accounting Office recommended the repeal of the 
Davis-Bacon Act. They stated that it appeared to be impractical to 
administer. Davis-Bacon is impractical to administer due to the 
magnitude of the task of producing an estimated 12,400 accurately and 
timely generated prevailing wage determinations.

  Mr. Speaker, what we have here is the Department of Labor trying to 
determine prevailing wages in specific job categories around the county 
for every country. It does not make any sense in 1995. Prevailing wages 
can be determined very effectively through the competitive bidding 
process.
  I would like to yield to my colleague from Michigan [Mr. Smith] to 
just give us an example of what happens when the Department of Labor 
tries to determine prevailing wages throughout the country.
  Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for 
yielding.
  Mr. Speaker, I would like to give a quote from George Will. He says:

       Although there is stiff competition for the title, `Dumbest 
     Thing the Government is Doing,' a leading candidate is the 
     government's refusal to repeal the Davis-Bacon Act.

  Mr. Speaker, guess who said this? Milton Friedman:

       Davis-Bacon is not outdated; it never made sense. From the 
     outset, it was special interest legislation designed to have 
     the taxpayers provide a subsidy in concealed form to members 
     of the construction unions and to the union leaders. It never 
     should have been enacted, and it should be repealed.

  Mr. HOEKSTRA. Mr. Speaker, let me also just inform some of my 
colleagues of what is happening. In the State of Oklahoma, two wage 
analysts have been responsible for handling the data submitted to and 
generated by the Department of Labor for the 11-state region that 
includes Oklahoma. What has happened in Oklahoma?
  In mid August the U.S. Department of Labor faxed copies of 49 WD10s. 
This is the form that various people voluntarily submit to the Federal 
government. It was indicated that several of the projects were entirely 
bogus and virtually all of the submitted forms contained grossly 
inflated or otherwise inaccurate information. The end result: Taxpayers 
end up paying more for construction than they otherwise would have to.
  Among the bogus WD10 forms is a form indicating the use of seven 
asphalt lay-down machines and seven roller finishers for an Internal 
Revenue Service building in downtown Oklahoma City. In reality, the 
parking lot is very small, fewer than 30 total spaces, and is made of 
concrete, not asphalt. A bogus form intended solely to drive up the 
rates on the prevailing wage scale.
  Specifically in the case of the asphalt lay-down machine operators, 
the bogus wage and fringe benefits were 44 percent higher than the 
union collective bargaining agreement and 30 percent higher than the 
prevailing wage rate in existence at that time. A clearly fraudulent 
attempt to take money from the American taxpayers.
  At best, in 1995, the Davis-Bacon wage rates reflect a 7-year-old 
reality. The average prevailing wage study is 7 years old. At worst, 
they reflect a fraudulently manipulated wage well above market rates.
  We do not need to reform Davis-Bacon. It cannot be reformed. It 
cannot be fixed. It does not make sense in 1995. It did not make sense 
in 1931. Mr. Speaker, I yield to my colleague from Michigan.
  Mr. SMITH of Michigan. Mr. Speaker, for example, electricians in 
Philadelphia average $15.76 per hour on private contracts, but the 
prevailing wage for them is $37.97. There are many similar examples, as 
you point out.
  Mr. HOEKSTRA. Mr. Speaker, we need only use the same wage determiner 
as used in the Private sector, which is supply and demand. Only the 
market can accurately set wages that reflect reality.

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