Over the last several days, my colleagues at CEI have pointed out some of the worst aspects of the Farm Bill -- and it's bad. But now The Wall Street Journal shines a spotlight on a little-noticed aspect of the bill that would make it even worse:
The overstuffed farm bill now waddling through Congress -- toward a possible veto by President Bush -- has attracted so much waste that everyone with a genuine interest in agriculture is feeling disheartened. Yet the bill has earned unlikely support from the labor union lobby.
Hmmm. Could this be at all related to a new and unprecedented Davis-Bacon requirement for ethanol construction? Davis-Bacon is the Depression era holdover that forces federal construction contracts to pay a "prevailing union wage" -- determined by the Department of Labor -- rather than a market wage. This anachronism was attached to the bill last week by House Democrats; a staffer tells us he's never before seen Davis-Bacon in a farm bill.
This, of course, would make the price hikes for food and fuel that an increased ethanol mandate would engender even worse -- as a sop to the Democrats' organized labor base, this is pandering of the most vulgar sort. The President already has plenty of other reasons to veto the monstruous Farm Bill, but this fight should not end here: Davis-Bacon deserves to be repealed.
This is the first time that Davis-Bacon has been in the public spotlight since the aftermath of Hurricane Katrina, when President Bush suspended Davis-Bacon in areas affected by the storm to help facilitate rebuilding in those areas -- only to reverse his order in the face of political pressure.
As I noted at the time, Davis-Bacon was supported by all-white labor unions during the 1930s, in order to disadvantage African-American workers in federal construction projects (Any praise for Bush for suspending Davis-Bacon then is moot now, since he reinstated it soon after without even attempting to defend the suspension):
The Davis-Bacon Act, passed in 1931, was the culmination of four years of activism for "prevailing wage" legislation by politicians who were supported by unions seeking to exclude African Americans. In 1927, U.S. Rep. Robert Bacon introduced the bill that later became Davis-Bacon after some of his white constituents in Long Island, New York, complained about an Alabama contractor bringing Southern blacks to work on the construction of a Veteran's Bureau hospital. New York's existing prevailing wage law did not cover federal projects. The bill eventually passed Congress, and President Herbert Hoover signed it into law.
Contractors and unions were both unhappy with the Act, because the law did not provide for the prevailing wage's determination. As a result, the law made it impossible for contractors to know what the prevailing wage would be when they began construction, and thus had no labor costs for factoring into bids. Unions did not like the fact that contractors could argue that the prevailing wage was lower than the union wage. Subsequently, Congress amended the law in 1935 to provide for predetermination of wages by the Department of Labor, which then issued regulations requiring prevailing wages to be set at union scale in any area in which construction was at least 30% unionized.
Davis-Bacon's checkered history is well documented by George Mason University law professor David Bernstein in his book, Only One Place of Redress: African-Americans, Labor Regulations & The Courts From Reconstruction to the New Deal. As Bernstein notes, Davis-Bacon caused massive African-American unemployment by eliminating an important Depression-era incentive for hiring black labor: cost. "The only recourse African Americans had in a labor market dominated by exclusionary unions that demanded above-market wages was their willingness to work for less money than the unionists," says Bernstein. By mandating uniform wages, Davis-Bacon "prohibited African Americans from exercising that leverage."
Pork barrel projects to manufacture an uncompetitive product, which can only use expensive union labor -- could anything be worse?
Bush may well veto this bill, which would be to the good, but the only way to prevent this monster from rearing its head again is to kill Davis-Bacon once and for all. Unfortunately, no politician out there seems willing to try. (For more on Davis-Bacon, I highly recommend Only One Place of Redress by David Bernstein, mentioned above; subscription required for Wall Street Journal link.)