Forcing the government to pay wages calculated on the basis of the Davis-Bacon Act formula for construction projects cost Americans about $10.9 billion in unnecessary spending in 2010 alone. The Heritage Foundation did the math, reviewed the policies, and provides some insight into this federal law run amuck: Under the DBA, contractors on all federally funded construction projects must pay their workers at least prevailing market wages. However, the Department of Labor (DOL) estimates DBA rates using a highly flawed methodology. The Inspector General has criticized the DOL for: • Using a self-selected sample instead of a scientific random sample to estimate DBA rates; • Allowing 100 percent error rates in audited samples of returned DBA surveys; and • Permitting long delays in updating DBA surveys. • These errors cause DBA rates to bear little relation to actual prevailing wages. Table 1 displays DBA rates and market wages estimated by the Bureau of Labor Statistics for five American cities. As the table shows, DBA rates are well above market wages in most (though not all) cities.
Repealing the law would be one solid measure in attacking our out-of-control government spending.
