AS ORGANIZED LABOR seeks to reassert its
leadership among both its membership and the wider liberal community, it will have to pick its targets carefully. This may mean re-examining some matters of longstanding dogma. Two cases in point--both the subject of recently proposed Labor Department regulations--are the Service Contract and Davis-Bacon acts requiring federal contractors to pay "prevailing wages" for services and construction.
The new Labor Department rules are not the sweeping rollbacks that industry groups had sought. Partly this is because more substantial revisions may require new legislation. The Service Contract regulations will, however, take the Labor Department out of the dubious business of interfering with employer pay and work practices in a host of occupations from computer processing to timbering in which the case for federal wage protection was extremely thin. Since enforcement of the act has always been lax, and since the most vulnerable types of service workers--cleaning crews and the like-- will still be protected, the changes should be relatively noncontroversial.
Not so the Davis-Bacon reforms. Davis-Bacon has acquired a symbolic importance to both its proponents and detractors that is totally disproportionate to its probable impact. The changes proposed are quite modest--likely to produce neither the several hundred million dollars in savings claimed by the administration nor the total disruption of the construction industry claimed by the building trade unions. Davis-Bacon will still apply to all federally aided construction projects costing more than the absurdly low $2,000 limit set back in the 1930s. A slightly higher ratio of "helpers" to high-paid "journeymen" will be allowed on projects and employer record-keeping will be cut substantially. To answer the frequent objection that the prevailing wages determined by the Labor Department tend to be the union level wages, the rule will require that the wage set for each craft be either that received by 50 percent of local workers--rather than the 30 percent previously used--or, if no such uniformity can be found, the average local wage.
Allowing the use of more lower-paid workers should save money, at least where collective bargaining agreements permit. Savings from the new wage-setting procedures are more speculative. What studies exist--and none of them is very good--do not show that the old 30 percent rule, whatever its conceptual failings, produced generally higher wages than the use of an average wage. Either procedure is sure to drive wages up somewhat--if they didn't it is hard to imagine why the unions would be so concerned. The inflationary effect is stronger in the predominantly non-unionized residential construction sector but probably minor in the heavily unionized commercial sector. With federal money scarce and getting scarcer, inflated wages mean less construction and fewer jobs.
The fight over Davis-Bacon is only heating up. Senatorial opponents, with the strong support of non-union builders, will continue to whittle away at Davis-Bacon coverage in each of the several federal construction bills to which it now applies. As organized labor prepares for battle it might want to consider whether--with so much other pressing public and private business on its agenda--it is worth dissipating the time, money and influence that will be needed to defend every jot and tittle of a law that has probably outlived its usefulness.