Changes in the Davis-Bacon Act regulations recently announced by the Labor Department are an excellent example of how the executive branch can bypass Congress and make major policy changes.
The Davis-Bacon Act requires federal contractors to pay the prevailing wage rate to workers on construction projects supported by federal funds. For years, builders complained that this increased wages artificially and they tried to get Congress to repeal it. But labor's strong support of the act made its repeal a political mine field.
About a year ago, the Reagan administration came up with a "solution"--avoid the bruising congressional battle by changing the Davis-Bacon regulations. The new rules redefined "prevailing wage" so that future wage levels will generally be lower, allow contractors to use far more semi-skilled (read cheaper) workers, and prohibit the mixing of data from high-wage urban areas with data from lower-wage rural areas in determining the prevailing wage. The Labor Department estimates the changes will save industry about $600 million each year from reductions in labor costs and paperwork.
Richard Haas, vice president of the Associated Builders and Contractors Inc., called the new rules "a major improvement." But AFL-CIO President Lane Kirkland said the new regulations make the Davis-Bacon Act a "farce, shell and shadow. The end result is repeal of a law by administrative action."