Governments are infamous for sordid policies that enrich the well‐connected at the expense of taxpayers and consumers, and the Davis‐Bacon law is a good example. Originally designed at least in part to block minorities from gaining jobs on government‐funded construction projects, the law now serves to line the pockets of labor bosses — with taxpayers picking up the tab. Yet as the Wall Street Journal opines, the House of Representatives actually wants to expand this bill. That’s the bad news. The good news (though it hardly creates a feeling of confidence if the track record is any indication) is that the White House has threatened a veto:
The 2007 Water Quality Financing Act, passed by the House late last week, reauthorizes a loan fund that lapsed in 1994 for state and municipal waterworks, sewage treatment, water conservation projects, etc. If it emerges from the Senate in its current form, the bill is projected to cost $14 billion over four years, a 250% increase over current spending levels. The bill not only extends the 1931 Davis‐Bacon regulations to all federal water‐infrastructure projects, but also to those funded solely by states. Economists have shown repeatedly that the artificial wage floors of Davis‐Bacon freeze low‐income laborers — primarily black or Hispanic — out of competition with their union counterparts. Small‐business contractors are especially hurt by the compliance costs. Davis‐Bacon also dramatically increases the cost of government projects, amounting to a mandate for more spending — and all for the sole justification of satisfying the AFL-CIO. According to the Bureau of Labor Statistics, only about 18% of construction workers are unionized.