On July 28, ABC sent a letter to President Trump applauding him for issuing two executive orders, Regulatory Relief to Support Economic Recovery and Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities, which will help to remove burdensome barriers to job creation and help the economy continue to rebound from the COVID-19 crisis.
In the letter, ABC identified the following issues for the Trump administration and federal agencies to consider during their review of regulatory obstacles to economic recovery, which are especially important to address as Congress and the administration work towards legislation making a considerable investment in America’s infrastructure:
- Government-mandated project labor agreement policies that are inconsistent across federal agencies.
- U.S. Department of Labor policies related to the Davis-Bacon Act that stifle competition and impose enormous burdens on contractor productivity and needlessly increase construction costs.
- DOL policies that serve as barriers to workforce development.
ABC also provided highlights of how these issues have a chilling effect on competition and impede job creation and economic recovery.
1. Government-mandated project labor agreements:
- Drive up the cost of taxpayer-funded construction projects by between 12% and 20%;
- Discourage merit shop contractors from bidding on the projects;
- Harm small businesses; and
- Lead to frustrating and needless paperwork, waste and red tape associated with the federal government’s evaluation and procurement of federal contracts.
ABC is aware of only 12 contracts totaling $1.25 billion that were procured and built in the United States subject to federal government-mandated PLAs and PLA preferences (under the Obama administration’s pro-PLA Executive Order 13502) on projects exceeding $25 million, out of a total of 1,681 federal contracts worth $98.74 billion from FY2009 through FY2019. In contrast, the prevalence of PLA mandates on federally assisted projects procured by certain blue states and localities are wasting billions of federal tax dollars, slowing the velocity of new infrastructure and stifling job creation and opportunity for all industry professionals during America’s economic recovery from the COVID-19 pandemic.
2. DOL’s Davis-Bacon Act policies:
- Are burdensome and needlessly increase construction costs, which is why many ABC members do not pursue public works projects subject to federal, state or local prevailing wage laws;
- Fail to provide detailed information about job duties that correspond to each published wage rate, making it difficult to determine the appropriate wage rate for many construction-related jobs; and
- Are flawed and fail to produce accurate, prevailing or timely rates.
In recent years, union wage rates have been found prevailing in a substantial majority of classifications, even though the percentage of unionized workers in the U.S. construction industry, measured by the Bureau of Labor Statistics, has fluctuated between 12.6% and 14.5% during the past decade.
The Congressional Budget Office estimated that the repeal of the Davis-Bacon Act would save $12 billion in federal construction costs between 2019 and 2028. ABC believes the CBO vastly underestimates the cost of the Davis-Bacon Act, and this data only addresses construction costs on federal projects. It does not address federally assisted projects subject to the Davis-Bacon Act or other public works projects subject to state and local prevailing wage laws impacting state and local budgets.
3. DOL’s workforce development policies:
- Expand apprenticeship opportunities and close the skills gap.
While considering new industry programs in 2019, it appears DOL did not take into consideration that the overwhelming majority of America’s 8.17 million U.S. construction industry professionals never participated in any federal registered apprenticeship programs but are instead developed through industry-recognized and market-driven apprenticeships sponsored by companies large and small.
Graduates of federal registered apprenticeship programs supply just 3.2% of the estimated 550,000 additional construction workers needed to meet industry demands in 2020 alone, according to ABC’s estimates prior to the economic downturn caused by the COVID-19 pandemic. At current levels of graduation, it would take more than 30 years for the federal registered apprenticeship program to meet industry demands for just this year.
Read the full letter here.
ABC applauds the Trump administration’s efforts to address federal polices and regulations harming America’s job creation and economic growth and looks forward to working with officials on these important issues.