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ABC Wisconsin and WILL Release Joint Study Demonstrating Davis-Bacon Act Drives Construction Costs Up Across the Board

May 28th, 2020 | by NEWCA

The Wisconsin Institute for Law & Liberty (WILL) recently partnered with ABC Wisconsin to conduct a study that found “clear evidence the federal law known as the David-Bacon Act (DBA) artificially raises the cost to taxpayers by as much as 50% in some professions, and Wisconsin construction companies indicate a repeal would spur more project bids. As Wisconsin recovers from the COVID-19 response, the Davis-Bacon Act distorts wages, limits competition, and raises costs for taxpayers at a time when Wisconsin can ill-afford it,” according to a press release from WILL.

Using Bureau of Labor Statistics (BLS) data to crunch the numbers between average market wages to the reported prevailing wages in specific construction jobs, they found:

- Roofers in Wisconsin make 50% more under DBA than they do in the private sector.
- Carpenters and plumbers earn a DBA wage premium of about 20%.
- Steel workers earn an 8% DBA wage premium.
- Construction workers in the Milwaukee area earn the largest wage premium in the state of more than 20%.
- The entire Western portion of the state, including Dane County, earns the next highest premium between 10 and 20%.

The survey of a 125 Wisconsin businesses and contractors found:

- 90% of construction companies report DBA increases employment costs.
- 68% reported bidding on jobs that involved DBA compliance in the last year.
- 67% would be more likely to bid on projects that currently require compliance with DBA if the act was lifted.
* 24% report the DBA does not affect whether or not they bid.
* Just 3% said the DBA increased their likelihood of bidding.

“The Davis-Bacon Act distorts wages, limits competition, and increases the cost of employment for Wisconsin contractors," said Will Flanders, Ph. D., research director for WILL. “If Congress is to undertake significant infrastructure investment, they must turn an eye towards reforming the DBA to ensure that taxpayers pay market wages for construction.”

You can read the entire study here.

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