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10-26-05 -- Great News! Davis-Bacon Prevailing Wage To Be Reinstated On Gulf Coast
10-26-05 -- The end of the suspension of Davis-Bacon prevailing wage protections in the Gulf Coast is in sight. In a meeting this morning with White House Chief of Staff Andy Card, U.S. Reps. Steven C. LaTourette (R-OH-14) and Frank LoBiondo (R-NJ-2), co-chairs of the Republican Working Group on Labor, were informed that President Bush has agreed to reinstatement of the wage law in the region as of November 8.
The Davis-Bacon Act sets a minimum pay scale for workers on projects which are valued at $2000 or more and are funded in whole or part by the federal government. It requires contractors on these projects to pay the wage determined to be “prevailing” in the region for each trade. (Thus, Davis-Bacon rates are not “union rates,” as foes of paying prevailing wages often claim. Instead, they are averages of all rates within an area.) The statute also requires meticulous recordkeeping about the number of employees working, the number of hours worked, employee Social Security numbers and wages and benefits and thereby provides for accountability in federal contracting.
On September 8, Bush invoked the National Emergencies Act to suspend Davis-Bacon requirements in the counties in Alabama, Florida, Louisiana, and Mississippi that were declared disaster areas because of Hurricane Katrina. No end-date for the suspension was stipulated and it was to apply to all federally funded or federally assisted projects in the region, regardless of whether they pertain to post-Katrina reconstruction. This is just the fourth time Davis-Bacon has been suspended by a president, and in the other instances it was suspended briefly for a specified period, with the longest suspension lasting 60 days.
The White House contended that suspending the prevailing-wage law would reduce rebuilding costs and provide opportunities to minority-owned companies. Instead, LaTourette and LoBiondo say, the suspension has prompted the hiring of illegal workers over Americans and led to profiteering. “There have been many reports of illegal workers flocking to the Gulf Coast to secure jobs, and about a dozen illegal workers were recently discovered working at a naval base in New Orleans,” according to a press release issued by LaTourette’s office. (An article posted on the IBEW’s website relates that union electricians who had just begun working on a military construction project for the prevailing wage rate of $22 per hour were replaced soon after the suspension took effect by non-English speaking immigrants brought in from Texas who were willing to work for S14 an hour without benefits.)
LaTourette and LoBiondo had spearheaded a letter to the president co-signed by 37 House Republicans seeking the statute’s reinstatement. They also met repeatedly with White House officials, and they said that during a recent meeting Card admitted that payroll savings on Gulf Coast reconstruction projects were not being passed on to taxpayers.
NECA and several other union-employing construction associations had also protested the administration’s actions through letters to Congress and the White House. Thus, we applaud the president’s reversal.
As LoBiondo notes, “Those trusted with rebuilding the region must be legal, skilled and, to the greatest extent possible, local workers. The reinstatement of Davis-Bacon will furthermore ensure that there is accountability of the taxpayer’s interests throughout the process. The employment protections provided under the law will ensure that legal workers are treated fairly and that federal contracts are properly awarded and executed.”
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“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
...The statute also requires meticulous recordkeeping about the number of employees working, the number of hours worked, employee Social Security numbers and wages and benefits and thereby provides for accountability in federal contracting. ...
I'll give it that - the paper trail is unreal....it'll be interesting to see if DB requirements are enforced in comparsion to current laws against hiring illegal aliens.
This is great news, The President made a horrible decision in suspending D.B. and he owes it to the workers to correct his lack of judgement on this issue.
This is great news, The President made a horrible decision in suspending D.B. and he owes it to the workers to correct his lack of judgement on this issue.
The thing that really gets me about this is the fact that anyone considered $22.00 an hour to be exhoribant wages. That's $45,760.00 in yearly salary providing you work every possible hour in the year (2,080). These people don't get a weekly salary and if they miss work due to family sickness, holidays, or for any other reason, they won't get paid. Most of them will probably earn between $35,000.00 and $40,000.00. Now consider that they will be working outside in the heat/cold and mud of a job-site doing hard physical labor. No wonder we have such a hard time recruiting people to work in the construction industry.
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“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
The thing that really gets me about this is the fact that anyone considered $22.00 an hour to be exhoribant wages. That's $45,760.00 in yearly salary providing you work every possible hour in the year (2,080). These people don't get a weekly salary and if they miss work due to family sickness, holidays, or for any other reason, they won't get paid. Most of them will probably earn between $35,000.00 and $40,000.00. Now consider that they will be working outside in the heat/cold and mud of a job-site doing hard physical labor. No wonder we have such a hard time recruiting people to work in the construction industry.
$45k a year and free housing, medical care, and disaster right offs doesn't sound so bad.
Of course all of this translates into less reconstruction for the same tax dollars which means fewer homes repaired and lower-priority projects being canceled.
It'll be interesting to see how small employers navigate through the paperwork required...which doesn't keep illegals out unless sombody on the other end is ready to do some enforcement.
I wonder what they are going to do with the specialized labor that requires certifications and accompanying paperwork that more than likely was lost in the flooding...give a waiver?
For anyone interested heres a linky to the wage rate determination for N.O.:
$45k a year and free housing, medical care, and disaster right offs doesn't sound so bad.
Of course all of this translates into less reconstruction for the same tax dollars which means fewer homes repaired and lower-priority projects being canceled.
It'll be interesting to see how small employers navigate through the paperwork required...which doesn't keep illegals out unless sombody on the other end is ready to do some enforcement.
I wonder what they are going to do with the specialized labor that requires certifications and accompanying paperwork that more than likely was lost in the flooding...give a waiver?
For anyone interested heres a linky to the wage rate determination for N.O.:
The medical plan is not very good and if you live in the area, you won't be getting free housing. Think about it. If they got guys to work for $14.00 an hour, I'd be willing to bet they weren't paying housing, subsistance, or even health insurance. As soon as those people or their families get sick, the taxpayers wind up footing the bill.
And don't think the government was getting the savings on wages. The contractors were making more money. The costs are high because of the nature of the problem, but that doesn't translate to more building. And by using the cheaper labor, the quality suffers as the skill level is lessened.
__________________
“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
The medical plan is not very good and if you live in the area, you won't be getting free housing. Think about it. If they got guys to work for $14.00 an hour, I'd be willing to bet they weren't paying housing, subsistance, or even health insurance. As soon as those people or their families get sick, the taxpayers wind up footing the bill.
And don't think the government was getting the savings on wages. The contractors were making more money. The costs are high because of the nature of the problem, but that doesn't translate to more building. And by using the cheaper labor, the quality suffers as the skill level is lessened.
I will bet you an Arizona Cardinals hat that the only winners out of this will be the trade unions. In 2 months folks will be complaining that they are not getting any work because they are getting squeezed out.
Everyone has this misconception that DB has been restablished to help residents get employment to rebuild their own area and to keep the illegals out. Even though I doubt thats gonna happen - but thats another story.
What folks don't realize is that wages were already rising and construction companys have been hollaring that they need more more workers.
Our government and the state and local folks have set up quite a bit of programs to help every family affected by Katrina - already there's been an emergency extension of unemployment insurance benefits and loosening of regulations to make more people eligible for disaster unemployment assistance.
In addition we are also subsidizing displaced folks basic needs until they can get back to a normal life. Right off the bat this is what the Feds are going to cover - before a resident gets a job that pays davis bacon wages.
Lodging expenses reimbursement (for a hotel or motel)
Rental assistance (cash payment for a temporary rental unit or a manufactured home)
Home repair cash grant (not loans)
Home replacement cash grant (not loans)
Medical
dental
funeral costs
Transportation
and the all encompasing: Other disaster-related needs.
If you re-read the article you'll notice that just because DB has been reinstated - there is no incentive to hire any displaced resident. Not one word about companies should hire residents.
In context to the quality of work done during construction - that will be up to the folks handling the federal monies to assure the work is done right. But I honestly doubt our government is capable of turning on the light switch to become competent inspectors.
Another important aspect to realize is that by having competing long term wage scales between the feds (with Davis Bacon) and the state/local governments (no davis bacon) - the state/local projects will lose everytime one of their jobs goes out for bid. Not to mention the delays because of manpower shortage, lack of funds to attract/maintain a work force, and the increased cost of rebuilding communities.
In short - we are establishing socialist states by having set wages and prices, rather than allowing the market to establish equilibrium wages and prices - in addition to covering other expenses.
Our feds response to this disaster shouldn't be entirely based on the typical paradigm of trying to protect displaced citizens - with artifical wages.
Instead we should be helping to create an environment that gives employers the opportunity to grow.
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