Return to Previous Page
Beacon Hill Institute Study Finds Davis-Bacon Wages Grossly inflated (Feb. 2008)
The Federal Davis-Bacon Act: The Prevailing Mismanagement of Wages (Feb 2008)
The Beacon Hill Institute at Suffolk University in Boston found that wages on federally funded construction projects subject to the Davis-Bacon Act are grossly inflated. The Feb. 2008 study compared methodology used by the U.S. Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) and the DOL’s Employment Standards Administration’s Wage and Hour Division (WHD) to determine the true prevailing wage for workers employed on Davis-Bacon construction projects.
Researchers examined nine occupational categories in 80 metropolitan areas and concluded that the current WHD method unnecessarily inflates wages by a weighted average of 22 percent when compared to wages determined by BLS methodology. Some of the problems found in the calculation of the prevailing wages under WHD included untimely wage reporting, poor survey design and the opportunity for unions to dominate the process.
The BHI study found that the WHD mismeasure of wages has five principal consequences for construction wages and costs:
- The WHD methods inflate wages, on average, by 22%
- The WHD methods inflate construction costs on projects subject to the DBA by 9.91%
- The WHD methods unnecessarily raise construction costs by a total $8.6 billion per year on projects subject to the DBA
- In some areas of the country, the DBA fails to protect worker wages. The study found that the government set wage is well below the BLS and/or market wage because WHD methodology is exceptionally flawed and untimely
- States that opt to use the DBA prevailing wage, the DBA methodology or the local union wages are likely to experience higher public construction costs
Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.