Congress passed the Davis-Bacon Act in 1931, then designed to counteract the effects on local contractors of cutthroat competition by itinerant contractors scouting the country during the Depression and underbidding local firms on government projects. The act requires contractors to pay "prevailing wages" on construction projects funded with federal money.
The passage of the Davis-Bacon Act was followed by a flurry of similar laws being enacted in many states, so-called "little Davis-Bacon Acts," which impose wage requirements on construction projects funded with state, and sometimes local, money. Thirty-seven states to date have such laws.
The Davis-Bacon Act also has stirred a considerable amount of controversy which has increased ever since its inception. Nearly every study conducted on the act has concluded that it has an adverse effect both in terms of economic cost and employment opportunities of nonunion and minority employees. Under the administration of the Department of Labor, critics point out, the effect has been to favor large unionized urban contractors at the expense of open shop and small local contractors. Cost estimates have pegged the extra expense resulting from the act at as high as 34 percent over comparable private industry construction, primarily due to the Labor Department's method of calculating "prevailing wages," which more often than not leads to the adoption of union scale rates. Not surprisingly, Davis-Bacon finds its only supporter in organized labor and its friends.
Academic and professional research and cost analyses concerning Davis-Bacon have generally been sporadic, fragmented and usually oriented toward the federal act. This issue of Review features a comprehensive summary by Armand J. Thieblot, associate professor, University of Maryland, of the state-level prevailing wages laws. A comparison reveals wide variations among state laws, according to Dr. Thieblot, and a historical examination shows that some laws even pre-date the federal act, while others were passed relatively recently. The general trend has been either toward repeal or limiting coverage, but some states however, have decided to expand.
Dr. Thieblot's work is a welcome addition to the body of knowledge of Davis-Bacon and its state level counterparts. In addition to being a guide to the national picture of prevailing wage laws, it provides detailed analyses of each one of the state acts, historical understanding of their development and a sense of future direction. This is part of a larger study of federal and state prevailing wage legislation being completed by the Industrial Research Unit of The Wharton School, University of Pennsylvania.