Undoing the Gulf Coast Wage Cut — now, with momentum

September 22, 2005

The House Dems’ drive to undo Bush’s executive order suspending the Davis-Bacon Act is starting to pick up steam. Three developments of note:

First, the number of cosponsors jumped yesterday from to 186, as 15 House Dems jumped on board. This means 95% of the entire House Dem caucus has signed on to this effort — and we’ll likely get the other 10 holdouts before much longer.

Second, I heard from a reliable Hill source that a Senate companion bill will likely be introduced as early as this week. The lead sponsor will probably be Ted Kennedy.

And, finally, the issue is starting to also become a political nuisance for the White House. Yesterday, reporters pestered Scott McClellan with questions about Bush’s executive order, looking for some kind of explanation.

In particular, a press corps member noted that Rep. Frank LoBiondo — a Republican — has begun circulating a letter to his House colleagues, calling on Bush to rescind the order. McClellan was asked if the president would consider a reversal.

McClellan: We suspended that act for the reasons that we stated previously. This will open up access to more business — small businesses, including women-owned and minority-owned businesses. It cuts through the red tape and helps us move forward quickly to address the needs of the people in the region and to provide substantial savings. We’re talking about savings here in terms of spending. That’s an important part of that, too.

Q: But how does lowering people’s wages help with rebuilding the economy?

Funny, McClellan never quite got around to answering that one.

So, let me get this straight. This is going to allow woman-owned and minority-owned businesses to be involved in rebuilding the gulf coast because they wouldn’t be able to otherwise? Are woman-owned and minority-owned businesses to cheap and/or poor to pay fair wages? Is this affirmative action or something?

  • Everybody knows lower wages increases profits for the businesses involved, putting the same amount of money into the region, but carefully choosing whose hands to place it in.

  • McClellan is just talking though his XXX. He is using the women and minority-owned businss BS because it sounds good and makes people who don’t support the prez on this look bad for not supporting women and minority-owned businesses but also makes them look obstructionist on rebuilding.

    The millions of $$$ are going to go the big contractors – who may subcontract (and judging from some of the stories I have read about people with the skills, equipment, desire – not subcontract). While the money is still likely to help rebuild the city it doesn’t seem to be intended to help locals who A- aren’t there and B- lost everything.

  • Prevailing wage is $9/hr. Offered wage is $6/hr.
    Contractor saves $3/hr. Contractor keeps $1.50/hr per
    employee for his/her company and donates $1.50/hr
    times number of employees to Ranger slush fund, or
    Tom Delay charity.
    GOP ends up with mucho dinero compliments of all
    taxpayers.
    Opportunity Rita not far off.

  • I know this is an important issue, but shouldn’t the Dem leaders be working on getting 186 cosponser for a comprehensive reconstruction bill that includes a way to pay for it? Right now, Operation Offset is the only thing getting coverage – that’s a huge missed opportunity.

    The only thing out there is HC’s comment about redoing TVA for the gulf. Can’t our policy wonks do better than that?

  • The real people who would be helped by the suspension of Davis-Bacon are the rich Texas contractor buddies of the shrub. They could use cheap illegal mexican labor and even if they got caught, the profits would not be offset by the penalty, if they were actually “punished.”

  • As a female small business owner living on the Gulf Coast, I find it appalling, but not suprising. Bush’s dad also repealed Davis-Bacon after Hurricane Andrew in 1992 but Bill Clinton pulled it out of the trash and had it reinstated before the moving trucks parked at the White House were overdue at the U Haul center.

    Repealing Davis-Bacon does little to help anyone except the big contractors who are quickly and quietly taking over the Florida panhandle. Paying a good worker a substandard wage isn’t a drop in the budget bucket compared to the cost of workman’s compensation (required in Florida). One painting company here with three employees had to recently pony up $14,000 for insurance in order to be legal and compete with the biguns. That was just for the down payment and the company had a difficult time even finding an insurance company that offers workman’s comp.

    I can’t speak for other states, but in Florida the Mom and Pops are hurting at a time when they should be flourishing as should their employees.

    It’s like Jeb wants them to fail.

  • McClellan kept trying to answer the question about a “wage cut” as if the question was about tax cuts. C’mon, the man is not that stupid. Dishonest – maybe. Stupid – not.

  • Since nobody so far has addressed the real reason why Davis-Bacon was enacted to begin with, here is my take: 1)Kansas passed the first prevailing wage statute in 1891. By the time the Act was passed, seven states, including NY, already had a state statute in place. 2)The first version of the Act was introduced in Congress in 1926 3)Ironically, the Act’s principal sponsors were Republicans. 4)One of the two principal reasons given for the need for the Act was to prevent government from being victimized by greedy contractors who hire unskilled laborers at low wages and produce SHODDY WORKMANSHIP. 5)Here is what the Act’s cosponsors argued when the bill was under consideration, as published at http://www.solidarity.com/Davis-Bacon.htm: Bacon, a former Banker, explained the need for the law when he detailed for his colleagues during debate on the bill how a construction firm from Alabama transported thousands of unskilled workers to a public project in New York. “They were herded onto this job, they were housed in shacks, they were paid a very low wage, and…it seems to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state.” Davis, the former Secretary of Labor under Presidents Harding, Coolidge and Hoover, went on to argue that “the least the Federal Government can do is comply with the local standards of wages and labor prevailing in the locality where the building construction is to take place.” 6)Suspension of the law has only happened four times. FDR suspended it for three week in 1934 during a transition to New Deal policies. The second suspension was by Nixon for twenty eight days. He said he was trying to reduce inflation pressures, until his Labor Secretary accused him of using construction workers as patsies. Then Bush Sr. suspended the law indefinitely for the recovery from Hurricane Andrew, but Clinton reinstated it lickety quick (as Nagin would say), as noted in another blog. Now this Bush Jr. move. But Wikipedia says that “Republicans have long been trying to repeal the Davis-Bacon Act on the grounds that the regulations are outdated, expensive and bureaucratic…Weakening it has been part of the Republican Party platform in 1996 and 2000.” The question is: Will we let them get away with it? Is there any chance that they can be shamed into keeping the law in place for the sake of fairness? Are there any other strategies that will work?

  • Thanks Ann….very informative entry. What this looks like is a deja vu from the Iraq experience. No-bid contracts, guarantee for corporate profits, awarding the SAME contratctors….but sadly, mistaking American workers for Iraqi workers. These same companies pay their Iraqi laborers pennies on the dollar, and it seems to me, they are trying to do the same thing…only they are treating the American worker as a third world commodity. There was a day when the unions would rise in protests against these shennagins….where are they now? Busted.

  • Some pundit on NPR said the waiving of Davis-Bacon would save 38% in construction costs. (Where DO they get these numbers?!) Will Halliburton, Bechtel et al take 38% less in profits?? What do you think?

  • This prevailing wage is a joke,the only people helped by it are the contractors.For example in 1974 the prevailing wage in Pensacola,Fl. for ironworkers(welders,rodbusters,Sturctural ironworkers) was $ 7.66 per hour,now in 2005 it has risen all the way up to the wage of $10.00 per hour.on government projects $2.34 is all that it has risen in 29 years,something smells here doesn’t it!

  • WHY do we stand for what they are doing.?Iremember geting a 1.31 an hour in 1963 are we going backwards ?.What ashame our country looks like in other countries eyes.

  • It’s very hard to keep an ebb tide from ebbing, or a flood tide from flooding. We are in a Zeitgeist of national capitalism, the corrollary to national socialism. under this new way of life, all things revolve around the produciton of profit. They do not revolve around the worker, the community, or the individual. It will take a new time to change this. When the tide is ebbing, it’s smart to put your boat into water early. When the tide is flooding, it’s smart to lengthen the anchor chain.

    We are seeing the natural swing of the pendulum, which swung a bit too far left under Roosevelt 2, and is now swinging a bit too far right under Bush 2. Have faith. It will center again.

  • Ohhh, man I’m not a republican but I’m grinding my teeth here. Republicans don’t write Econ textbooks people.

    If you have any competition then lower wages will go to lower prices or your product won’t sell. Nobody will buy the competitor’s higher priced product because the CEO has a nice car. Gahhhh!!!!

    This isn’t about profits though, it’s about bureaucracy. Even though taxes are extremely high in France most businesses complain about the reams of red tape.

    Welfare re-distributed through paychecks instead of food stamps isn’t any more dignified, it just leads to higher unemployment. The fact that Bush is incompetent doesn’t change these facts.

  • BTW, this was unintentionally hilarious:

    “Bacon, a former Banker, explained the need for the law when he detailed for his colleagues during debate on the bill how a construction firm from Alabama transported thousands of unskilled workers to a public project in New York. “They were herded onto this job, they were housed in shacks, they were paid a very low wage, and…it seems to me that the federal government should not engage in construction work in any state and undermine the labor conditions and the labor wages paid in that state.””

    You do realize here that what Bacon is bitching about is that this public project used southern Blacks instead of northern Whites. Both Davis and Bacon were outraged that southern Negroes were taking northern White jobs. Fascinating to see liberals and wannabe socialists slathering over this product of America’s racist past.

  • Suspending Davis Bacon is just plain common sense – it’s a cumbersome, bureaucratic nightmare.

    Honestly do you think a skilled construction worker will be underpaid in LA, MS or AL right now.

    It does discourage smaller contactors from working on projects – the paper work is just amazing. Fine for a 100M contractor – not
    good for smaller contractors.

    My firm will not work on projects with this provision – because of the paper work and my staff is paid more
    than the prevailing wage.

    In my own state you end up with people making $25.00/hour to cut grass – give me a break.

  • What a bunch of left wing smog here. Davis-Bacon is nothing but a give away to the blood sucking unions. Market wages and fast response will do more good for the people in the Gulf than anything Ted Kennedy has done in 30 years. Funny, funny blurb for this blog– “reality based commentary”. Yeah, sure…

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