From category archives: ABC Academy & GA Articles

DOL Inspector General Releases Report on Davis-Bacon Wage Audit

On March 29, the U.S. Department of Labor’s Office of Inspector General released an audit examining the DOL’s Wage and House Divisions survey process for collecting and determining the prevailing wage rate in four types of construction projects. According to the report, the OIG found that, as of September 2018, 3% of WHD’s 134,738 unique published rates, roughly 4,400, had not been updated in 21 to 40 years. Additionally, of seven sampled surveys that analyzed 124 wage rates, the OIG found 48% of the rates were not determined from data about a single construction worker within the 31 counties that the published rates represented. Finally, the report found union wages prevailed for 48% of the wage determinations, despite the fact that just 12.8% of the U.S. private construction workforce is unionized.

 

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The Heritage Foundation: Labor Department Can Create Jobs by Calculating Davis–Bacon Rates More Accurately

According to a report issued by the Heritage Foundation, the United States Department of Labor   uses unscientific and flawed methods to estimate the Davis-Bacon Act prevailing wage rates. The report found, amongst other findings, that current surveys do not use statistically representative samples have tiny sample sizes and combine data from economically unrelated counties or set local wages using statewide data. Furthermore, nearly half of the surveys are over a decade old and don’t account for economic changes over the last ten year. The report concludes by suggesting the DOL should switch to Bureau of Labor Statistics data to get a more accurate reading of wage data.

 

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George Mason University: Prevailing Wage Legislation and the Continuing Significance of Race

A study released in June 2018 by the George Mason University Antonin Scalia Law School found that prevailing wage laws discriminate against minority construction workers who have been traditionally underrepresented in labor unions. By examining the Davis-Bacon Act and the original intent of the law to exclude African-American construction workers from working on federal projects, to looking at the continuing effects of prevailing wage laws and the lack of minority participation in labor unions, the authors conclude  that prevailing wage legislation has been a disaster for minority construction workers.

 

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Minnesota Center for Fiscal Excellence Finds Flawed and Outdated Prevailing Wage Calculation Process

A study released by the Minnesota Center for Fiscal Excellence found that the
prevailing wage determination process utilized by the Minnesota Department of Labor and Industry leads to inaccurate wage rates on construction projects. A disproportionate 75 percent of prevailing wages reflected union rates in the period analyzed in the study, even though just 32 percent of private construction workers in Minnesota belong to a union. The authors also discovered that 72 percent of all prevailing wage rates were set using old rates, imported rates or a combination of both.  

 

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Wisconsin Taxpayers Alliance Finds Flaws in State Survey Calculations to Determine Prevailing Wage Amounts

The Wisconsin Taxpayers Alliance found the survey method used to calculate prevailing wage led to wages that: "do not reflect varying county construction wages or regional labor markets; are more "costly" in low-wage, low-income counties, particularly those in northern Wisconsin; can fluctuate widely and unpredictably from year to year, rather than change slowly and consistently as market wages typically do; can require contractors to pay un-skilled workers more than skilled workers in some situations; and may cost state and local government hundreds of millions of dollars in excess costs."  

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Anderson Economic Group Study finds Increase in Cost of Education Construction in Illinois due to Prevailing Wage Laws

A report by Anderson Economic Group, LLC found that an estimated $2.9 billion in education construction expenditures are subject to Illinois prevailing wage law and in the absence of the state's prevailing wage law, Illinois could have saved $158 million on average each of the past ten years. With an additional cost of $158 million per year due to prevailing wage laws, Illinois could have saved $1.6 billion dollars on school construction from 2002 to 2012.   

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Anderson Economic Group: The Impact of Michigan’s Prevailing Wage Law Education Construction Expenditures

A study by East Lansing-based Anderson Economic Group (AEG) found that Michigan’s prevailing wage law is costing taxpayers and draining millions of dollars per year from the state’s public universities, community colleges and school districts by driving up the costs of construction projects. The study found the prevailing wage requirement increases construction costs by approximately $224 million annually. Additionally, the study found that with no additional taxpayer funding, more than 315 additionally elementary buildings could have been built in the previous decade with the money lost because of the state’s prevailing wage requirement. 

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Columbia University: The Complex Worlds of New York Prevailing Wage

The study found the New York system of using collective bargaining agreements to establish wage rates is likely invalid given that union membership is presently lower than 30 percent in most localities. In fact, unions now represent only 24 percent of the state's construction workforce, yet New York still relies on union collective bargaining agreements when establishing prevailing wage rates. Near the turn of the last century, New York established wage standards to ensure construction workers were receiving a normal, or "prevailing," private-sector wage and benefits on public construction work. 

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GAO: Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey

An April 6, 2011 report published by the Government Accountability Office (GAO), titled, "Davis-Bacon Act: Methodological Changes Needed to Improve Wage Survey," highlighted serious flaws in how wages are determined under the Davis-Bacon Act, and recommended steps for the Department of Labor (DOL) to take to remedy some of the issues. GAO examined how DOL has addressed previous concerns from stakeholders, and also looked at new issues that need to be resolved.

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Cato: Prevailing Wage Laws: Public Interest or Special Interest Legislation?

A study published in the Cato Journal, Vol. 30, No.1, concludes the purpose of prevailing wage laws are to limit competition and provide significant benefits to labor unions. These policies come at the expense of taxpayers that are forced to pay more than otherwise necessary for projects that require prevailing wage mandates. George Leef, Director of Research at the John W. Pope Center for Higher Education Policy, concludes that no societal benefits result from union favoritism.

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