For monthly unemployment rates during the Depression, see Richard K. Vedder and Lowell E. Gallaway, Out of Work: Unemployment and Government in Twentieth-Century America, Updated Edition (New York: New York University Press, 1997), p. 77.
For a more detailed review of the racial dimensions of the Davis-Bacon Act, see Richard Vedder and Lowell Gallaway, Cracked Foundations: Repealing the Davis-Bacon Act (St. Louis: Center for the Study of American Business, October 1995).
The problems of administration and fraud are covered extensively in two hearings jointly held by the Subcommittee on Oversight and Investigations and the Subcommittee on Workforce Protections, both of the Committee on Education and the Workforce, U. S. House of Representatives. The first was held on June 20, 1996, and is reprinted as Joint Hearing on the Davis-Bacon Act: Focusing on Allegations of Fraud and Barriers to Employment in Serial No. 104-79 (Washington, D. C.: Government Printing Office, 1996). The second, entitled Joint Hearing to Review the Davis-Bacon Act was held on July 30, 1997, and is reprinted in Serial No. 105-68 by the Government Printing Office in 1997. In the first hearing, see especially the testimony of Brenda Reneau, Oklahoma Commissioner of Labor. In the second hearing, read especially the statements of Charles C. Masten, Inspector General, U. S. Department of Labor and George S. Werking, Assistant Commissioner in the Bureau of Labor Statistics of the Labor Department.
In 1996, for example, public construction was over $141.1 billion, almost precisely one-fourth the total new construction of $568.9 billion. See the U. S. Bureau of the Census, Statistical Abstract of the United States: 1997, p. 715.
On the "strength" of state prevailing wage laws, see A. J. Thieblot, "A New Evaluation of Impacts of Prevailing Wage Law Repeal," Journal of Labor Research, 17(2), Spring 1996, p. 317. The states with strong prevailing wage laws are Michigan, Illinois, Missouri, Rhode Island, Minnesota, Ohio, Washington, Hawaii, California, New Jersey, New York, and Massachusetts.
Michigan's law was invalidated late in 1994, too late to have any material impact on construction employment. Similar results are obtained using 1993 data, when Michigan unambiguously was covered by prevailing wage legislation the entire year.
The author thanks the Michigan Bureau of Consumer and Industrial Services and Mark L. Fischer and Robert P. Hunter of the Mackinac Center for Public Policy for their assistance in providing data.
The seasonal adjustment procedures were done using the Econometric Views computer software, following standard procedures used by the U. S. Department of Commerce and other federal government agencies.
Some employers probably reasoned that if the appellate court reversed the district court decision, they potentially might be liable for extra wage payments if they paid less than the prevailing wage, thus they behaved as if the prevailing wage law were still in effect.
See U. S. Bureau of the Census, Census of Construction Industries, 1992, or the 1997 Statistical Abstract of the United States, p. 713.
The author is indebted to the Associated Builders and Contractors of Michigan for this information.
The governmental revenue and expenditure data reported here were obtained from the U. S. Bureau of the Census World Wide Web site, www.census.gov.
For information on how school districts can earn the voter trust essential for needed bond proposals, see Michael Arens, The Need for Debt Policy in Michigan Public Schools (Mackinac Center for Public Policy, May 1998), accessible by Internet at www.mackinac.org/article.asp?ID=363.
Quoted in "Kuipers: End prevailing wage law: Representative says move could save millions," The Holland Sentinel, April 8, 1999, p. A1.
A standard reference is George Akeroff and Janet Yellin, Efficiency Wage Models of the Labor Market (New York: Cambridge University Press, 1986).
To be sure, there would be some budgetary complications that would have to be resolved, such as the fact that capital outlays are financed by motor fuel taxes, property taxes, and other revenue sources. Some reduction in those levies might be appropriate in lieu of the income tax reduction used here for illustrative purposes.
Much attention has been given to a Utah Study that purports to show that repeal of prevailing wage laws would raise costs to taxpayers. See P. Phillips, G. Mangum, N. Waitzman, and A. Yeagle, Losing Ground: Lessons from the Repeal of Nine "Little Davis-Bacon Acts," (Salt Lake City: University of Utah, 1995). Thieblot, op. cit., has decisively refuted the claims and methodology in the Utah study. A detailed discussion is beyond the scope of this study.
The Michigan prevailing wage law dates only from 1965, when deliberate attempts to use laws to promote racially discriminatory behavior had largely passed from the scene. This does not negate the possibility, however, that the Michigan law could have had unintended adverse consequences for members of minority groups.
See the U. S. Bureau of the Census, 1990 Census of Population: Social and Economic Characteristics (Washington, D. C.: Government Printing Office, 1993), Vols. CP-2-1, pp. 81-82, and CP-2-24, pp. 209-210.
See Robert P. Hunter, "Union Racial Discrimination is Alive and Well," Mackinac Center for Public Policy Viewpoint on Public Issues 97-26, September 1997, accessible by Internet at http://www.mackinac.org/article.asp?ID=325.
One factor closely associated with prevailing wage laws is unionization. The average percentage of the work age population that was unionized in the strong prevailing wage states was 11.20 percent compared with 4.26 percent in states without prevailing wage laws. For good data on the economic impact of unions, see Barry T. Hirsch and David A. Macpherson, Union Membership and Earnings Data Book (Washington, D. C.: Bureau of National Affairs, 1998).