Davis Bacon is also known as the prevailing wage law. It is a federal law that was sponsored by two Republican legislators and signed by Republican President Hoover in 1931. Republican Representative Davis of Pennsylvania and Republican Representative Bacon of New York had been approached by contractors in their states who were unable to compete against low wage workers from the south. The law requires employers to pay the “prevailing wage” (wages & fringes) on federal and service contracts.
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"We insist that labor is entitled to as much respect as property. But our workers with hand and brain deserve more than respect for their labor. They deserve practical protection in the opportunity to use their labor at a return adequate to support them at a decent and constantly rising standard of living, and to accumulate a margin of security against the inevitable vicissitudes of life."
Fireside Chat, 1936
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Yes. Davis Bacon applies to federally funded projects. State Prevailing Wage Laws, sometimes referred to as the Little Davis Bacon Laws, apply to jobs using state or local taxpayer dollars.
Contracts funded with taxpayer dollars are required to be awarded to the lowest responsible bidder. This prevented elected and appointed officials from awarding contracts to family and friends. But, the requirement that the work be awarded to the lowest bidder also created other problems. Employers from the south were using low wage workers from the south to enable them to underbid local contractors and their employees. Those employers and their workers added nothing to the local economies. They took their paychecks and their profits and left.
Sometimes the lowest wage does not translate into the best value. If employers are forced to compete on the basis of who can find the cheapest workers either locally or by importing labor from other regions, the quality of the project may suffer. If low wage, unskilled workers are unable to complete the project on time or other workers have to be brought in to correct problems, this could lead to unexpected costs.
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"The AFL-CIO has done more good for more people than any (other) group in America in its legislative efforts. It doesn't just try to do something about wages and hours for its own people. No group in the country works harder in the interests of everyone."
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No. The prevailing wage is the total of wages and benefits paid for construction work in each county regardless if those construction workers are union or not. For example: If the majority of the work in a county were being performed by nonunion electricians receiving $15.00 in total wages and fringes and the union electricians in that county were receiving a total package of $30.00; the prevailing wage would be $15.00.
Workers and employers living in a particular county and paying taxes that are used to build schools, fire houses, police stations, court houses, jails, roads, libraries, parks etc should have an opportunity to work on those projects. The use of local contractors and employees paying wages equal to the wages that are most common in that county help to promote a strong construction industry. A strong construction industry encourages construction workers to remain in that industry and improve their skills.
A highly skilled workforce that competes on the basis of productivity produces buildings that will cost less to maintain and operate than competition based on low wage unskilled workers who must compete by driving down wages.
