Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Obama proposed several ways to create more jobs in last week's speech, but he neglected to address the Davis Bacon Act, which is now distorting the labor market.
"If construction jobs are Obama’s focus to recovery, a suspension of Davis-Bacon and prevailing wage (law effectively requires government contractors to pay above market wages or union-scale wages) laws must be enacted. Disallowing contractors to pay market wage creates less jobs and production. As shown in the Mercatus study relating to the ARRA spending, '6 percent more workers could have been hired on Davis-Bacon projects, and more roads, could have been repaved, more houses insulated, more levees repaired if ARRA-receiving organizations could have paid market wage.'"