The Department of Labor announced Wednesday that it will change how it calculates so-called prevailing wages paid to government contractors working on construction and infrastructure projects. In its announcement of the new rule, the Labor Department claims the changes are meant to “modernize Davis-Bacon,” the 1931 law that governs compensation for federal building projects.
Actually, the changes are a significant step backward. Biden is effectively undoing a major change made by the Reagan administration—changes that were made, fittingly, to help combat inflation.
That change, made in 1982, repealed the “30 percent rule” that guided the process for determining what wages would be paid on which projects. Under the 30 percent rule, the prevailing wage for any particular area would be based on the highest wages paid to at least 30 percent of workers within the same area.
You don’t need an advanced degree in accounting to see how that mandate could artificially hike wages on federal projects.
[You don’t need a political science degree to recognize a payoff to Big Labor, either. — Ed]
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