Sunday, December 28, 2008

Prevailing Wages

The Davis-Bacon Act, in effect since the Great Depression, requires any construction project receiving federal subsidies to pay "prevailing" wages--meaning, union wages--to its workers. Now the Democrat Congress, is attempting to broaden the and extend this decree even further.

The 2007 Water Quality Financing Act has passed the House, reauthorise a loan fund that lapsed in 1994 for state and municipal waterworks, sewage treatment, water conservation,etc. The bill, if it emerges from the Senate in its current form is projected to cost $14 billion over 4 years, a 250% increase over current spending levels.

This extension in its present form, would not only regulate all federal water-infrastructure to also to those funded solely by states. The Davis-Bacon Act sets artificial wage floors that freezes low-income laborers--primarily black and Hispanic--out of competition with their union counterparts. Small businesses contractors are especially hurt by compliance costs. This act automatically increases the cost of government projects amounting to mandate for more spending.
According to the Bureau of Labor statistics, only about 18% of construction workers are unionized.

I note that the proposed new museum jumped about 15% in construction costs. That was announced about the same time the Peoria Unions pledged $600,000 to the project and the museum committee announced that only union labor would be used to build the complex.

To my knowledge, no work is awarded to any contractor doing business with the county who doesn't meet the prevailing wage. It has the appearance of small non-unionized
firms being shut out of some business. If the contractor who wins any bid for say, services, hires their own labor, this labor can be non-unionized, legal or illegals doing the work and there is no question asked about the wages the winning bidder pay to their laborers or if any taxes are collected like Social Security of if the employers even submits the taxes collected on individuals to the proper taxing body.

No wonder schools can be built in right-to-work states at one half the cost they can be built in Peoria. Look for the Obama administration to encourage unions bosses to accelerate their efforts to overturn right-to-work laws.

No, I'm not anti-union. Read my past blogs where I tell of my experience as a business owner represented by the Teamsters Union for 22 years.

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