May 21, 1992 | Executive Memorandum on Labor
Sixty-five years later, many unemployed inner-city residents would jump at the chance to work for less than the local unio n scale on federal rebuilding projects. Yet as Congress and the White House prepare to send millions of dollars to south-central Los Angeles and other inner-city neighborhoods, Davis-Bacon rules will cruelly freeze these eager workers out of the chance to rebuild their own communities. Instead, federal dollars will be channeled into the pockets of other Americans, most of whom already have jobs, who will commute from well outside the affected areas. Pushing Up the Price Tag. Examples abound of how the Davi s -Bacon Act pushes up the price.tag of inner-city projects and programs, while denying jobs to local residents. Mary Nelson, director of Bethel New Life Inc., a church-affiliated social service organization in Chicago, explains that Davis-Bacon adds as muc h as 25 percent to her total costs and often prevents'her from using the local unskilled poor to help refurbish the housing projects they themselves live in. Instead, Nelson must contract with outside firms who have no roots in her neighborhood. Marshall E n gland, who runs a similar program in New York City, declares that Davis-Bacon is "the biggest inhibitor to good housing in poor areas." Even a more tragic story is the case of Duane Ehresman, who operates a small construction firm in one of Chicago's poor e r Westside neighborhoods. Using modest funds from a federal program, Ehresman made the legal mistake of recruiting some 45 black youths to rehabilitate some dilapidated apartment buildings rather than hiring skilled workers at union rates. When the local u nions complained, the U.S. Department of Labor fined Ehresman, and he was forced to fire his young workers and replace them with union tradesmen. Organized labor defends Davis-Bacon as being good for minority workers. But for every skilled minority worker who gets a job at the prevailing rate, dozens of others are denied the chance to climb the first rung on the employment ladder. Over a decade ago, after an examination of employment patterns on federal projects, a report from the Comptroller General of th e United States recommended that the Davis-Bacon Act be repealed, in part be- cause of its discriminatory impact on minority employment. Stated the 1979 report:
We could find no evidence ... that the repeal of Davis-Bacon would have any discriminatory effe ct on women or ethnic categories of construction workers. To the contrary... Davis-Bacon wage rates actually resulted in fewer construction job opportunities for low-skilled minorities....
Time to Open Up Opportunities. The choice awaiting lawmakers is a simple one. If Congress truly wishes to bring jobs back to the inner cities it can take the immediate step of repealing the Davis-Bacon Act, thereby opening up job opportunities on federal reconstruction projects. Yet George Bush need not wait for Congres s to act. The President has the executive power to suspend Davis-Bacon with the stroke of a pen in times of emergency. The term emergency is not defined in the law. The two previous suspensions of the Act were justified for very different reasons: Franklin Roosevelt suspended the Act in 1934 for "ad- ministrative" reasons, and Richard Nixon suspended the Act in 1971 out of fear it was fueling inflation. Bush could justify suspending Davis-Bacon nationally on the grounds that there is an urgent need to creat e job opportunities for minorities, and that this goal should be achieved in a manner that does not bust the budget. At the- very least, Bush can suspend the Act on all projects in high-unemployment neighborhoods. He should not hesitate to do so.
Scott A. Hodge Grover M. Hermann Fellow in Federal Budgetary Affairs}}