Davis-Bacon Act

Date: June 04, 2008

The Davis-Bacon Act, a Depression-era wage subsidy law, requires that each public works contract over $2,000 contain a clause that establishes the minimum wages to be paid. Contractors and subcontractors are to pay workers a minimum wage based on the local "prevailing wage." However, these wages rarely resemble local market conditions because they are based on union recommendations. The Davis-Bacon wage scale has overwhelmingly favored large, urban and unionized contractors. Small and minority-owned businesses are discouraged from bidding on public projects by the complex and archaic rules set forth by the act. The inflated Davis-Bacon wage scale requirements and significant paperwork burdens of the Davis-Bacon Act shut small employers out of the federal construction market. In addition, the costs of public construction projects are inflated. NFIB supports allowing small business to compete for public works projects by repealing Davis-Bacon.

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