Construction Wage Rollback Bill Lands in Senate

By Tyrone Richardson
January 25, 2017

Construction businesses would be allowed to trim wages on federally funded infrastructure projects under a bill Sen. Jeff Flake (R-Ariz.) introduced Jan. 24, he said during a Senate hearing.

The legislation, the Transportation Investment Recalibration to Equality (TIRE) Act, would suspend the Davis-Bacon Act’s prevailing wage requirements for transportation and other infrastructure projects. The 86-year-old law requires construction businesses to pay their employees a prevailing wage set by the Labor Department for work on public infrastructure contracts. The union-level wages are as much as 22 percent above market rates, according to studies.

“The bottom line is, every time Davis-Bacon applies to a federal project, less money is going to construction and more money is going to meet onerous wage requirements,” Flake said on the Senate floor.

This legislation marks the latest Republican attempt to limit or repeal the Davis-Bacon Act. It will need the backing of at least some Democrats to get the 60 votes to avoid a filibuster in the Senate. The bill didn’t have any co-sponsors as of late afternoon Jan. 24. It stands to get some resistance from labor unions and some Democrats who have lauded the law as a means to offer strong wages for the industry.

Democrats Willing to Agree?

That includes Democrats such as Sen. Sherrod Brown (D-Ohio), who told Bloomberg BNA Jan. 19 that he wouldn’t support “efforts to chip away at worker protections and wages.”

Brown’s comments could be echoed by many other Democrats since the legislation is a “stand-alone measure,” Paul DeCamp, an administrator of the DOL’s Wage and Hour Division under President George W. Bush, told Bloomberg BNA Jan. 24.

“Its only effect would be to remove the prevailing wage requirement from future federal highway projects, without any countervailing provisions to address Democrats’ policy preferences,” he said. “But if this bill gets packaged with other measures, such as a commitment to a certain level of infrastructure funding, then perhaps the chances of passage improve.”

Republican Attempts to Alter Davis-Bacon Act

There have been numerous attempts to undo the measure throughout the years. One of the most recent came in July 2015, when Sen. Mike Lee (R-Utah) introduced the Davis-Bacon Repeal Act, which was co-sponsored by eight other Republicans. The proposed legislation never moved out of committee.

Flake’s office released a written statement Jan. 24 arguing the benefits of suspending the prevailing wage requirements. It said research by the Beacon Hill Institute at Suffolk University found that Davis-Bacon wage mandates “drove up labor costs by more than $2 billion dollars in 2016 alone. That figure amounts to nearly 10 percent of all federal construction spending for 2016.”

A 2008 study by the institute concluded that wages mandated by the Davis-Bacon Act were about 22 percent above market wages.

Flake told Bloomberg BNA Jan. 17 that he is confident he can rally support for the bill from both sides of the aisle. The measure is designed to curry favor with President Donald Trump, who has made infrastructure spending a key priority, he said.

Flake reiterated the importance of shrinking expenses during his speech Jan. 24.

“Fixing our nation’s crumbling infrastructure is a top priority for many in Congress, and the new administration has touted a large infrastructure package as one of its major agenda items,” he said. “However, despite the bipartisan consensus on both ends of Pennsylvania Avenue for infrastructure investment, visions for the road ahead diverge.”

Officials with the Trump administration weren’t immediately available for comment Jan. 24.

To contact the reporter on this story: Chris Opfer in Washington atcopfer@bna.com

To contact the editors responsible for this story: Peggy Aulino atmaulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer atcopfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved