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The American Recovery and Reinvestment Act of 2009 (ARRA) expanded federal Davis-Bacon requirements to 40 additional federal programs, according to a Feb. 2010 study conducted by the Government Accountability Office (GAO). Although the impacts of these requirements vary among agencies (primarily because many are not directly involved in construction activities), several--including the U.S. Department of Energy (DOE)* –report that Davis-Bacon has had a negative impact on ARRA-related program administration and goals.
The Public Policy Foundation of West Virginia on Feb. 16, 2009, released a study that concludes West Virginia's average state prevailing wage rate is at least 49 percent, and as high as 74 percent (using adjusted figures), above West Virginia's true market prevailing wage in the construction industry. The study also found that as many as 1,500 more jobs could be created if West Virginia's prevailing wage law were repealed or reformed to reflect actual market wages.
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In a March 2000 report, the General Accountability Office (GAO) estimates the federal government could save more than $4 billion in discretionary spending outlays over a five year period by repealing the Davis-Bacon Act.
A study by the Mackinac Center for Public Policy estimates that Michigan's prevailing wage law, which requires union wages to be paid on state construction projects, costs state taxpayers about $250 million per year. The main effect of this extra cost is to boost the wages of construction workers, most of whom earn compensation well above the average for Michigan residents, according to the study. Michigan's prevailing wage law also appears to decrease the number of construction jobs in the state.
A working paper released in September 2003 by the Program on Housing and Urban Policy at the University of California, Berkeley presents new evidence on the increased costs of prevailing wage laws on construction. The paper estimates that new prevailing wage requirements signed into law by eventually-recalled Governor Gray Davis in 2001 increased costs on state-subsidized low-income housing in California between 9 percent and 32 percent under the most credible statistical models.
In May of 2001 the Program Review and Investigations Committee authorized a study of Kentucky's prevailing wage law. The committee staff suggested changes to the prevailing wage laws so they would more accurately reflect local wages.