President Bush suspended on Sept. 8 the law that requires employers to pay locally prevailing wages to construction workers taking part in federally financed projects in areas of Mississippi, Louisiana, Alabama and Florida affected by Hurricane Katrina.
The executive order applies to 81 Mississippi counties, 64 Louisiana parishes, six Alabama counties and three Florida counties.
The Davis-Bacon Act, a 1931 statute that established the requirement for paying “prevailing wages” on public works projects, has been suspended before. In 1992, President George H.W. Bush suspended Davis-Bacon in parts of south Florida and coastal Louisiana hard hit by Hurricane Andrew.
According to President Bush’s proclamation, had the act remained in place, it would have increased the federal government’s cost of providing assistance to areas damaged by Hurricane Katrina.
Under the Davis-Bacon Act, prevailing wage rates must be paid on all federal construction contracts in excess of $2,000. The act also stipulates, however, that prevailing wage requirements can be suspended during a “national emergency.”
Prevailing wages on the Gulf Coast are among the lowest in the country, under $10 an hour in most job categories.
“This suspension will not only accelerate efforts to rebuild the Gulf Coast, but even more importantly, create job opportunities for those urgently needing work,” said Kirk Pickerel, president and chief executive of the Associated Builders and Contractors. “With the suspension of Davis-Bacon, entry-level helpers will now be allowed to participate in the rebuilding effort. This proclamation will lower rebuilding costs, cut through red tape and streamline the entire rebuilding process.”
AFL-CIO President John Sweeney disagreed with those projections about the outcome of the act’s suspension and called the proclamation “outrageous.”
“Employers are all too eager to exploit workers,” Sweeney said. “This is no time to make this easier. What a double tragedy it would be to allow the destruction of Hurricane Katrina to depress living standards even further.”
But Rep. Jeff Flake, R-Ariz., says the suspension is just what the damaged communities need to shorten the rebuilding process. “The Davis-Bacon Act can add weeks to federally financed construction projects,” Flake said. “The victims of this disaster deserve the swiftest and most efficient response that the federal government can provide.”