Long-sought labor reform is hostage to local politics

0 Comments | Insight on the News, Dec 25, 1995 | by Lisa Leiter

Efforts to fry the Davis-Bacon Act have run afoul of Republicans worried about reelection.

If House members could cast their votes by secret ballot, Republican Rep. Cass Ballenger of North Carolina thinks his colleagues would repeal the Davis-Bacon Act by an overwhelming 300 votes. But few politicians will go on record opposing the Depression-era legislation, originally designed to channel jobs to local workers rather than low-wage Southern blacks migrating North.

Davis-Bacon forces contractors on federal construction sites to pay workers "local prevailing wages," which critics claim are set by powerful labor unions and raise construction costs by as much as 50 percent - at the taxpayers' expense. Businesses have sought to repeal the act for years, but organized labor has had the ear of Congress. With the GOP victories in 1994, Davis-Bacon seemed doomed.

Instead, repeal legislation has been bogged down in both chambers and probably will remain dormant until after the 1996 elections, according to Ballenger, chairman of the House Economic and Educational Opportunities subcommittee on Workforce Protections.

He and Sen. Nancy Landon Kassebaum, a Kansas Republican, tried to attach language repealing the law to the massive budget-reconciliation package this fall. But House Republican leaders asked the Rules Committee to drop the measure from the budget bill when they discovered it would be killed under the Senate's Byrd rule, which bars extraneous provisions from appropriations bills. Republicans didn't want to vote on a measure that was going to be dropped anyway, says one congressional aide.

"They're scared," Ballenger tells Insight. House Republican freshmen from districts with strong labor unions have begged the subcommittee chairman to lay off Davis-Bacon, saying it would damage their reelection prospects. "This is not a year to try to hurt somebody," says Ballenger in his Southern drawl. "It's a good thing to talk about, but not to vote on."

The 25-year-old Coalition to Repeal Davis-Bacon was "outraged that it came out of reconciliation," says Charlotte Herbert, vice president of government relations of the Association of Builders and Contractors, a member of the group. Her organization will continue to lobby lawmakers to scrap Davis-Bacon. It recently commissioned a survey of federal construction projects in New York that found "grossly inflated" wages compared with those earned by workers in the private sector.

An investigation into cases of Davis-Bacon fraud in Oklahoma will help Herbert's case. Last year, the Labor Department issued new wage rates for the heavy-construction industry in Oklahoma City. Although an increase was expected, the building industry went bananas when wages for some jobs doubled or tripled. State officials investigated and found three examples of inflated wages for fictitious employees and ghost projects. Because the Labor Department does not have the staff to verify all wage information, Oklahoma officials say "local prevailing wages" nationwide could be based upon fraudulent data. Sometimes the voluntary wage surveys are submitted by "interested third parties"; Oklahoma's investigation found that 100 percent of the "usable" wage surveys were submitted by labor unions.

"Why would it not be happening in other states?" asks Jeff Lester, deputy commissioner of the Oklahoma Department of Labor. "Oklahoma is a relatively low-unionization state and the level of sophistication is greater in other areas of the country." Ballenger says six other states are investigating Davis-Bacon fraud.

Oklahoma officials asked the Justice Department to investigate seven months ago and state Labor Commissioner Brenda Reneau says Attorney General Janet Reno "gave us the runaround." So 12 members of Congress fired off a letter to Reno Nov. 28, asking her to make the investigation a "high priority" and issue monthly status reports on her findings. "We predict that... the Justice Department will find that Davis-Bacon fraud is a nationwide scam," Reneau said in a statement.

So far, the only victory for Davis-Bacon opponents has been the Housing Act of 1995, where Rep. Rick Lazio, a New York Republican, won the right to exempt public-housing projects from certain Davis-Bacon provisions. Many housing officials, noting that they can't afford to pay unskilled workers unionscale wages, had condemned Davis-Bacon because it prevented them from hiring tenants or recruiting volunteers to work at the projects. One Washington complex joined a civil-rights lawsuit filed by the libertarian Institute for Justice charging that Davis-Bacon violates Fifth Amendment guarantees of equal protection under the law. Briefs arguing for summary judgment will be filed in February, says staff attorney Dana Berliner.

The Clinton administration and a bipartisan group of lawmakers support reform proposals that would make Davis-Bacon less inclusive. Terry Bumpers, director of the Contractors' Coalition for Davis-Bacon, says the repeal effort will not die until the basic law is changed, but he maintains that overall the law is a good one: "The people who are opposed to Davis-Bacon don't care about our industry, our country or anything else."