Tough Commute? Scrap Davis-Bacon Act
Liz and I traveled this past Labor Day weekend. We drove from Crystal Lake, Illinois to a golf resort in Manistee, Michigan. Traffic was bad in the Chicago area as expected, but exceptionally slow traffic continued all the way through Indiana, and even into Michigan, all along I-94 until we reached Michigan 31. M-31 breaks off from I-94 roughly at St. Joseph. It was several hours of driving hell starting out, and continued late into the evening, near midnight.
I bring this up because I stumbled on a MarketWatch article Hate your commute now? Just wait 5 years
Indianapolis to Chicago, I-65
Labor Day traffic on Interstate 65 from Indianapolis to Chicago is 49% higher than average at its peak. Unless a major transportation project is undertaken in the next five years, commuters will experience this level of congestion on the average day by the year 2033.
I-65 intersects I-94 near Gary Indiana. I-80 and I-90 merge in close by. It is one hell of a congestion. My experience previously was things start getting better near the Indiana-Illinois border.
That didn’t happen this Labor Day trip.
Obviously states are strapped for cash, but there were three or four sections of highway under repair in Indiana and a couple more in Michigan.
One of the problems is prevailing wage laws such as Davis-Bacon drive up .cost of repairs. Unions and prevailing wage laws massively drive up construction costs.
Even FDR was against the notion of public unions.
I have discussed Davis-Bacon on many occasions. Inquiring minds interested in a background on the original purpose of the act should read My Thoughts on the Davis-Bacon Act.
“… while the sponsors and supporters of the Act also intended it to disadvantage immigrant workers of other races, these thinly veiled references make it clear that the Act was primarily intended to discriminate against blacks.”
The Davis-Bacon Act as amended, requires that each contract over $2,000 to which the United States or the District of Columbia is a party for the construction, alteration, or repair of public buildings or public works shall contain a clause setting forth the minimum wages to be paid to various classes of laborers and mechanics employed under the contract. Under the provisions of the Act, contractors or their subcontractors are to pay workers employed directly upon the site of the work no less than the locally prevailing wages and fringe benefits paid on projects of a similar character. The Davis-Bacon Act directs the Secretary of Labor to determine such local prevailing wage rates.
There are 117 classifications of jobs for which some set of bureaucrats must determine “prevailing wages”. Here is a partial list:
ASBE = International Association of Heat and Frost Insulators and Asbestos Workers
BOIL = International Brotherhood of Boiler Makers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers
BRXX = International Union of Bricklayers, and Allied Craftsmen
(bricklayers, cement masons, stone masons, tile, marble and terrazzo workers)
CARP = United Brotherhood of Carpenters and Joiners of America
ELEC = International Brotherhood of Electrical Workers
(electricians, communication systems installers, and other low voltage specialty workers)
ELEV = International Union of Elevator Constructors
ENGI = International Union of Operating Engineers
(operators of various types of power equipment)
IRON = International Association of Bridge, Structural and Ornamental Iron Workers
LABO = Laborers’ International Union of North America
PAIN = International Brotherhood of Painters and Allied Trades
(painters, drywall finishers, glaziers, soft floor layers)
PLUM = Operative Plasterers’ and Cement Masons’ International Association of the United States and Canada
PLAS = United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada
ROOF = United Union of Roofers, Waterproofers and Allied Workers
SHEE = Sheet Metal Workers International Association
TEAM = International Brotherhood of Teamsters
Even FDR Understood the Problem
Public unions get into bed with management and politicians and work out sweet deals for themselves at taxpayer expense. No one looks out for the taxpayer. Even FDR understood the problem.
Message From FDR
Inquiring minds are reading snips from a Letter from FDR Regarding Collective Bargaining of Public Unions written August 16, 1937.
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.
The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees.
A strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.
Time to Scrap Davis-Bacon, End Public Union Collective Bargaining
Before any project can be economically viable, labor costs must be addressed, and that is exactly why we need to scrap Davis-Bacon and all prevailing wage laws. We also need to eliminate collective bargaining of public unions.
Unless and until we do that, we will dramatically overpay for infrastructure projects and taxpayers will pay through the nose for them.
Government should strive to provide the most services at the least cost. Public unions strive to provide the fewest services at the most cost. Is it any wonder cities and states are broke?
About the Author: Mike Shedlock is the editor of the top-rated global economics blog Mish’s Global Economic Trend Analysis, offering insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education. Every Thursday he does a podcast on HoweStreet and on an ad hoc basis he contributes to many other websites, including UnionWatch.