From category archives: ABC Academy & GA Articles

Dual GAO Studies Find Negative Impact of Davis-Bacon Prevailing Wage Requirements on Recovery Act Projects

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. 

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Public Policy Foundation of West Virginia: An Economic Examination of West Virginia’s Prevailing Wage Law

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 The study also found that as many as 1,500 more jobs could be created if West Virginia's prevailing wage law were repealed or reformed to reflect actual market wages. 

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GAO Report: The Federal Government Could Save More Than $4 Billion Over Five Years if the Davis-Bacon Act Were Repealed

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.

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The Beacon Hill Institute: The Federal Davis-Bacon Act: The Prevailing Mismanagement of Wage

The Beacon Hill Institute (BHI) at Suffolk University in Boston, Mass., found that wages on federally funded construction projects under the Davis-Bacon Act (DBA) are grossly inflated. The February 2008 study compared the methods 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 prevailing wage for workers employed on federally funded construction projects. 

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Minnesota Taxpayers Association: Prevailing Wage Rates in Minnesota

A study conducted by the Minnesota Taxpayers Association (MTA) found the state's method for calculating prevailing wage rates on public construction increased project costs between 7 percent and 10 percent. Minnesota and California use a “modal” calculation, in which the rate that is most frequently reported in a survey is designated as the “prevailing” wage.

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Mackinac Center for Public Policy: The Effect of Michigan’s Prevailing Wage Law

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.

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California Institute for County Government at California State University, Sacramento: An Analysis of Market and Prevailing Wage Rates for the Construction Trades in California

An August 2003 study from the California Institute for County Government at California State University, Sacramento shows that federal commercial prevailing wage rates and state prevailing wage rates in California are on average 36 percent to 55 percent higher than market wages.

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University of California, Berkeley: The Effects of Prevailing Wage Requirements on the Cost of Low-Income Housing

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.

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Ohio Legislative Bureau: The Effects of the Exemption of School Construction Projects From Ohio's Prevailing Wage Laws

The Legislative Bureau of the Ohio Legislature determined that rescinding prevailing wage requirements for school construction saved $487.9 million in aggregate school construction during the post-examination period, an overall savings of 10.7 percent. This study provides background information and evaluates the amount of money saved by school districts and education service centers due to the exemption, the impact of the exemption on the quality of school building construction, the impact of the exemption on the ways of construction of public school buildings, and summarizes the findings and discusses the limitations.

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Kentucky Legislative Research Commission: An Analysis of Kentucky’s Prevailing Wage Laws and Procedures

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.

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