‘Affordable Housing’ Too Costly For Taxpayers

‘Little Davis-Bacon’ Schemes Inflate Price of Public Works

Citing enormous costs, Nevada GOP Gov. Joe Lombardo is now calling for suspension of the Silver State’s so-called “little Davis-Bacon” law for $250 million in proposed taxpayer-funded residential construction projects. 

Nevada’s and other similar state laws were inspired by New York GOP U.S. Rep. Robert Bacon’s federal wage-fixing measure. Mr. Bacon first introduced what ultimately became known as the Davis-Bacon Act in 1928, in the midst of booming job and wage growth, as a means of restricting competition in the construction industry. 

In fact, a key purpose of this legislation, as supporter Miles Allgood (D-Ala.) bluntly admitted on the House floor, was to prevent “colored labor” from coming into “competition with white labor throughout this country.” 

Unshamed by the racist origins of the federal and many state wage-fixing laws, Big Labor politicians fight to keep such statutes on the books and even expand their scope, causing major problems in taxpayer-subsidized construction across much of the country. 

Davis-Bacon Schemes Can Inflate Construction Costs as Much as 25%

“Nonpartisan experts agree that Davis-Bacon schemes effectively block union-free construction firms and their hard hats from competing for public-works projects,” noted National Right to Work Committee Vice President John Kalb. 

“Decades of scholarly studies have found Davis-Bacon jacks up construction costs significantly. A 2008 New York study estimated that extending little Davis-Bacon mandates to low-income housing construction drives up the cost per unit by up to 25%! 

“Ignoring such facts, Big Labor politicians in a number of forced-dues states have expanded Davis-Bacon further and further to cover virtually all construction that receives any government support whatsoever, including tax incentives. 

“This creates a negative feedback loop that continues to increase costs for consumers as well as taxpayers and dramatically lowers the quality of public services. And with the share of all construction employment that is unionized having fallen to just 11.9% last year, the cost of Davis-Bacon in lost opportunities for union-free hardhats and contractors is now greater than ever.”

Building-trades union bigwigs routinely seek to diminish the supply of labor and drive up prices, and little Davis-Bacon laws are one of the key weapons they wield to, in the words of former Minnesota union welder Karl Ludwig, stem the “growth . . . of skilled labor.” 

The near-impossibility of building almost anything affordably in forced-dues states like New York, New Jersey, Massachusetts and California has contributed to the exodus of their citizens to states with greater worker freedom, especially those with no or very narrow little Davis-Bacon laws. 

“To make his state more competitive, Gov. Lombardo is pushing for a prevailing wage carve-out in A.B.540, a bill that furnishes funds for affordable housing projects,” said Mr. Kalb. 

“Thanks to its Right to Work Law, Nevada has grown rapidly for decades, but housing construction has not kept up, especially at the lower end of the market. 

“Knowing this, Mr. Lombardo is walking back, at least a little, from his past attempts to appease Big Labor by supporting Davis-Bacon. He has seen how so-called ‘affordable housing projects’ in San Francisco, Chicago, and New York have been anything but due to these unnecessarily high costs.”

Recent Efforts to Repeal Davis-Bacon Pair with Right to Work Expansion

Positive step that the Nevada effort is, nothing compares to full-on repeal of Davis-Bacon handouts to the construction union brass. 

Over the past four-and-a-half decades, many states have repealed their little Davis-Bacon laws. Today barely more than half still have one. 

In four states — Indiana, Kentucky, West Virginia and Wisconsin — recent little Davis-Bacon repeals were contemporaneous, or nearly so, with the passage of Right to Work. 

“Finally heeding Right to Work supporters and taxpayers, lawmakers in state after state have leveled the playing field for union-free hardhats and contractors,” Mr. Kalb said.

 “Given the positive results in reduced construction costs, the Committee is supporting little Davis-Bacon repeal efforts in both existing Right to Work states and in those states where passage of Right to Work is seriously on the table. 

“The Committee also opposes expansions of current little Davis-Bacon laws.” 

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