[Congressional Record Volume 142, Number 82 (Thursday, June 6, 1996)]
[House]
[Pages H6002-H6004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1900

  The closest you get to that with Davis-Bacon workers are electricians 
who make $12,476; ironworkers $12,391; the bricklayers all the way down 
to $11,363; a carpenter, 9,000; backhoe operator, 7,546.
  On and on it goes. Oklahoma City, a lot of furor around Oklahoma 
City, and there are people who are saying you cannot rebuild the 
Federal facility in Oklahoma City until you get rid of Davis-Bacon. I 
have heard that said several times.
  Davis-Bacon is not a problem in Oklahoma City, I assure you. The 
wages are higher than they are in Macon, GA, thank God, and they are 
higher than they are in Gainesville, FL. They are higher than they are 
in North Carolina. Thank God for that. But they are not above the 
average worker's income. The average workers are being paid some 
$24,370. Asbestos workers in Oklahoma City are paid $23,200. You are 
getting close. The average pay--I am sorry, the average pay of all 
workers is $23,000. Asbestos workers on Davis-Bacon projects actually 
come in above the average workers. For the first time you have an 
example of they come in above. Everybody else comes in below. Backhoe 
operator, $19,800; electrician, $18,871; carpenter $15,631; labor, 
$10,672.
  You can see from all of these salaries that these are members of the 
middle class who will have to be put at the lower end of the middle-
class scale. The middle class--it may be you have a steady job, but if 
these are members of the middle class, as they were when Davis and 
Bacon first made the law, the wages of construction workers were kept 
at a level where they were far higher in comparison to other workers 
and they worked in the middle class.
  We have destroyed the middle class, even under Davis-Bacon. The 
salaries have gone down. What the people are trying to do who want to 
repeal Davis-Bacon is wipe out the middle class that is generated 
through the construction industry, working people who work very hard, I 
assure you. Construction work is some of the dirtiest, hardest, most 
dangerous work in America. They deserve to be paid far better than any 
of the wages that you see here. Raleigh-Durham, Chapel Hill, NC, the 
average pay for all workers is $23,000. North Carolina. They are paying 
other workers far higher than they are paying Davis-Bacon workers.
  Average pay for all workers in the Raleigh-Durham, Chapel Hill area 
is $23,000. Boilermakers are the highest under that, and they are 
almost--they are a little more than half, $12,000; electricians, 
$11,000; ironworkers, $10,000; bricklayers $10,000. So in the Raleigh-
Durham area, to work under a Davis-Bacon contract and to be paid the 
very best, the boilermakers, means that you make half as much as the 
average worker makes. When I say half, I am talking about $12,164.
  The myth is a big lie. It is not really a myth. Myths have some 
basis. To have such a discrepancy between the facts and the reality 
means that somebody is perpetrating a big lie. Somebody is. There is 
some collusion here, a conspiracy here. The conspiracy is not in the 
Department of Labor. The conspiracy is not here on Capitol Hill.
  The conspiracy is out there with all those people who are generating 
these lies, the people who can go to ABC news, I guess producers of 20/
20, and have 20/20 produce such a lopsided, distorted picture of Davis-
Bacon. That did not happen by accident. That has to be a conspiracy to 
make that kind of lopsided journalism, to put it on the air on a major 
network. I suppose we will hear more of that, but I invite all of the 
journalists, especially those at the ABC network, those who put 
together the 20/20 piece, to come and take a look at the picture across 
the country. Tulsa, Oklahoma, average household--I mean the average pay 
for all workers is $21,599.

  There is one category that gets above that, boilermakers, but the 
ironworkers, $19,000; electricians, $15,000, and it goes down. Tulsa, 
OK, Oklahoma City, they seem to be far better than North Carolina. But 
no matter where you go, you will find the same pattern. That is, that 
Davis-Bacon workers are making less, in some cases criminally less than 
the average working person who is working on an hourly wage job.
  The facts speak for themselves. As I said before, the Senate has 
voted 99 to 0, the other body has voted 99 to 0 not to repeal the 
Davis-Bacon Act. They are willing to discuss a reform of the Davis-
Bacon Act. Anything that has existed for as long as Davis-Bacon can 
afford to be reformed. There are changes that could be made which would 
benefit the people who the act was designed to help.
  Let us reform, let us join the Senate, let the House join the Senate 
in indicating that the business of reform is an appropriate business. 
It is an honorable business. That is all we are going to engage in.
  To wage war against Davis-Bacon, to try to carry out a contract to 
destroy it is to try to destroy families and communities. The myths 
that keep--that are continually perpetrated, I will run through a few 
of them:
  The Davis-Bacon Act requires all contractors to pay union wages, even 
when the average wage in an area is well below the union rate. That is 
a myth, a big lie. Of the 12,500 prevailing wage schedules issued by 
the Department of Labor during fiscal year 1994, roughly 29 percent 
reflect all union wage rates, while 48 percent of the wage schedules 
are nonunion. Mixed schedules, those that contain both union and 
nonunion wage rates, make up the remaining 23 percent of the universe 
of wage rates out there.
  The perception that the Davis-Bacon Act rate is synonymous with the 
union rate is a holdover from the days when the rate paid to 30 percent 
of the workers in a classification could be considered the prevailing 
rate. For more than a decade, union wages are the locally prevailing 
rate only when the union rate is paid to at least 50 percent of the 
workers in a particular classification, which is very rare that union 
workers, the union rate is being paid to 50 percent of the workers in a 
particular classification.
  The Davis-Bacon Act is inflationary and adds billions of dollars to 
the Federal budget. That is the other myth. The payment of prevailing 
wages does not necessarily inflate costs, but does prevent costs from 
being cut at the expense of employees' wages.
  The director of the Congressional Budget Office, Robert D. 
Reischauer, testified before Congress on May 4, 1993, that the higher 
wage rates do not necessarily increase costs. If these differences in 
wages were offset by hiring more skilled and productive workers, no 
additional construction costs would result.
  A 1992 study commissioned by the International Union of Operating 
Engineers compared the average cost per mile for highway and bridge 
construction in five high-wage States to five low-wage States and found 
that the construction costs per mile were actually lower in the high-
wage States. In the States where the Davis-Bacon was,

[[Page H6003]]

the prevailing wage was higher, the actual construction cost was lower 
because the workers were more productive, more skilled, and more highly 
motivated.

  The Davis-Bacon Act is discriminatory in origin and blocks 
affirmative employment of women and minorities in the construction 
industry. I have dealt with that already. That is a myth. That 
certainly does not stand when you examine it closely.
  Davis-Bacon was not designed to be a civil rights act. Davis-Bacon, 
however, has accrued to the advantage of workers who were locked out by 
providing training programs of combined efforts of management and labor 
which have benefited minority workers a great deal.
  The other myth, the Davis-Bacon Act is poorly administered and wage 
determinations are woefully out of date.
  Wage and Hour has made a number of improvements in the administration 
of the Davis-Bacon Act over the last few years, including making wage 
determinations available on line through Fed-World, computerization of 
the wage determination updating system, and improved training and 
outreach efforts.
  Wage and Hour would like to be able to conduct more surveys; however, 
resources are limited.
  This is how the Davis-Bacon prevailing wages are determined, by the 
Wage and Hour section. They are limited resources. The budget has been 
cut by the Republican majority, and they are under great strain to try 
to enforce the act properly.
  What happens is that the workers are put at a disadvantage. If these 
Davis-Bacon surveys of the prevailing wages were updated and kept up to 
date, wages would go up, not down. We would have a situation where 
Davis-Bacon workers would be making more, if we had the personnel and 
the resources that have been denied by the Republican majority out 
there to administer the law properly.
  Another myth is that Davis-Bacon Act is no longer necessary in 
today's market economy. The purpose and need for the Davis-Bacon Act is 
as great today as when the act was first passed. Competition for work 
in the construction industry remains intense. In the aftermath of the 
Los Angeles earthquake, construction workers and contractors from 
outside areas sought to bid for the extensive work by offering lower 
rates.
  Unlike private industry, the Federal Government and most federally 
assisted entities must put primary emphasis in awarding construction 
contracts to the lowest bidder, and it is difficult, if not impossible, 
for agencies to award to the contractor with a slightly higher bid 
because that contractor does better work.
  The Davis-Bacon Act encourages contractors who compete based on 
efficiency and quality rather than who pays the lowest wages.
  As you know, the Los Angeles earthquake meant that large amounts of 
Federal money, billions of dollars went into Los Angeles and to the 
California economy. In fact, the California economy rebounded greatly 
as a result of the between $6- and $8-billion of Federal money that 
went into California. Most of that was for construction, rebuilding. 
The fact that Davis-Bacon was in force meant that the community 
benefited more, not less.
  I submit in its entirety an item labeled ``Davis-Bacon Act, Myth and 
Reality,'' along with other items I submitted for the Record:

                   Davis-Bacon Act, Myth and Reality

       Myth: The Davis-Bacon Act requires all contractors to pay 
     union wages, even when the average wage in an area is well 
     below the union rate.
       Reality: Of the 12,500 prevailing wage schedules issued by 
     DOL during FY 1994, roughly 29% reflect all union wage rates 
     while 48% of the wage schedules are non-union. Mixed 
     schedules, those that contain both union and non-union wage 
     rates, make up the remaining 23% of the universe.
       The perception that the DBA rate is synonymous with the 
     union rate is a hold over from the days when the rate paid to 
     30% of the workers in a classification could be considered 
     the prevailing rate. For more than a decade, union wages are 
     the locally prevailing rate only when the union rate is paid 
     to at least 50% of the workers in a particular 
     classification.
       Myth: The Davis-Bacon Act is inflationary and adds billions 
     of dollars to the Federal budget
       Reality: The payment of prevailing wages does not 
     necessarily inflate costs, but does prevent costs from being 
     cut at the expense of employees' wages.
       The Director of the Congressional Budget Office, Robert D. 
     Reischauer, testified before Congress on May 4, 1993, that 
     ``higher wage rates do not necessarily increase costs * * * 
     if these differences in wages were offset by hiring more 
     skilled and productive workers no additional construction 
     costs would result.''
       A 1992 study commissioned by the International Union of 
     Operating Engineers (IUOE) compared the average cost per mile 
     for highway and bridge construction in five high-wage states 
     to five low-wage states and found that the construction costs 
     per mile were actually lower in the high-wage states.
       Myth: The Davis-Bacon Act is discriminatory in origin and 
     blocks affirmative employment of women and minorities in the 
     construction industry.
       Reality: In 1993, the NAACP passed a resolution supporting 
     the Davis-Bacon Act. The DBA protects all construction 
     workers from exploitation and wage cutting. Former Secretary 
     of Labor Ray Marshall has written that the ``workers most 
     often victimized by unscrupulous contractors are the minority 
     workers.''
       Available data refute the argument that Davis-Bacon 
     operates in a manner that discriminates against minorities 
     and women. In fact, there is no difference in the employment 
     of minorities and women by Federal construction contractors 
     and contractors who do not do Federal construction work.
       Disadvantaged workers can be employed on DBA contracts 
     under approved training programs that offer opportunities for 
     real careers rather than the dead-end jobs that could result 
     without the Davis-Bacon framework. The Department of Housing 
     and Urban Development's STEP-UP apprenticeship program is an 
     example of how DBA can work in harmony with structured 
     training programs that provide meaningful employment 
     opportunities for unemployed public housing tenants.
       Myth: The Davis-Bacon Act is poorly administered and wage 
     determinations are woefully out-of-date.
       Reality: Wage and Hour has made a number of improvements in 
     the administration of the DBA over the last few years 
     including making wage determinations available on-line 
     through Fed-World, computerization of the wage determination 
     updating system, and improved training and outreach efforts.
       Wage and Hour would like to be able to conduct more 
     surveys; however, resources are limited. Thus the survey 
     program is carefully planned to target those areas where the 
     the most Federal construction is planned and where there is 
     evidence that wage patterns have changed. To the extent that 
     wage rates are out-of-date, that usually results in wage 
     rates that are too low rather than too high.
       Wage and Hour is exploring new ways to reinvent the process 
     to make it work even better.
       Myth: The Davis-Bacon Act is no longer necessary in today's 
     market economy.
       Reality: The purpose and need for the Davis-Bacon Act is as 
     great today as when the Act was first passed. Competition for 
     work in the construction industry remains intense. In the 
     aftermath of the LA earthquake, construction workers and 
     contractors from outside areas sought to bid for the 
     extensive work by offering lower rates.
       Unlike private industry, the Federal government and most 
     federally-assisted entities must put primary emphasis in 
     awarding construction contracts to the lowest bidder, and it 
     is difficult if not impossible for agencies to award to the 
     contractor with a slightly higher bid because that contractor 
     does better work.
       The Davis-Bacon Act encourages contractors to compete based 
     on efficiency and quality rather than on who pays the lowest 
     wages.
                                                                    ____



                                        Ernest D. Menold, Inc.

                                          Lester, PA, May 28, 1996
     Re Davis-Bacon reform, S. 1183.
     Senator Rick Santorum,
     U.S. Senate, Washington, DC.

       Dear Senator Santorum: I am writing to thank you for the 
     key role you played in defeating the attempt in the Senate to 
     repeal Davis-Bacon and to offer instead Davis-Bacon Reform 
     legislation in the form of S. 1183.
       Next year Ernest D. Menold, Inc. will celebrate its 50th 
     year in business. Over the course of those many years I, and 
     my father before me, have taken great pride in watching young 
     apprentices enter our industry, develop into skilled 
     mechanics, raise families, send their children to college, 
     have their medical needs taken care of, and for many, retire 
     with dignity to enjoy the fruits of their years of hard 
     labor. We take as much pride in those accomplishments as we 
     do in the jobs we have done and the reputation we have built.
       We are proud to be one of the more than 22,000 socially 
     responsible contractors in this country who share in these 
     same accomplishments. We hope that our federal government 
     will always see fit to play a leading role in setting the 
     standards that will allow the American construction worker to 
     look forward to a stable, productive and rewarding career in 
     our industry.
       Again, thank you for your support on this issue.
           Very truly yours,
                                           Ernest R. Menold, P.E.,
                                                        President.

[[Page H6004]]


                                           The General Contractors


                                 Association of New York, Inc.

                               New York, NY, November 7, 1995.

     Terry G. Bumpers,
     Director, National Alliance for Fair Contracting, Washington, 
         DC.
       Dear Mr. Bumpers: I enjoyed your letter to Brian Lockett. 
     If the occasion arises, you can distribute this letter to 
     anyone who questions the commitment of heavy construction 
     contractors to union contracting. The General Contractors 
     Association of New York, Inc. represents the heavy 
     construction industry active New York City. We have over 700 
     contractors using the collective bargaining agreements, that 
     have negotiated with fourteen different locals of the 
     building and construction trades. Our members are firmly 
     committed to union contracting because it is the only sure 
     way to obtain a steady supply of trained and capable workers 
     in New York City over the long term. The support of 
     prevailing wage legislation and union contracting is our 
     protection for the future for all of our members.
       The prevailing wages in the heavy construction industry of 
     New York City, at over $35.00 an hour in wages and fringe 
     benefits, would seem high to many. But the annual take home 
     pay of most of our workforce still leave them eligible for 
     most subsidized housing programs in New York City. We know 
     that we pay a fair wage that allows our workers to support 
     their families and to contribute to their communities in 
     their non-working hours. But we're not paying them enough to 
     live on Park Avenue.
       We also know what happens in New York City when there is no 
     prevailing wage legislation like Davis-Bacon protecting the 
     wage levels of construction workers. We have seen in the 
     unregulated building sector in New York City that wages can 
     be driven down to under $10.00 an hour by preying on the 
     desperation or illegal status of workers. At that level 
     workers earn barely enough to survive. We know that the 
     unregulated industry has no steady workforce, appalling 
     safety records, and little stake in the continuing health of 
     the communities in which its workforce must reside.
       Our heavy construction contractors survive and thrive on 
     the effectiveness of their workforce, not on the shine on the 
     equipment. The best assets leave each day at the end of the 
     shift. Those assets are most productive when they are paid 
     enough to work without family worries and to contribute to 
     their communities. We know that decent wages are the key to 
     attracting competent people to enter and stay in the heavy 
     construction workforce.

                          ____________________