On his CNN show this morning, GPS, Fareed Zakaria repeated his proposal to fast track public infrastructure projects but speeding up environmental readiness requirements and "suspend" the Davis-Bacon Act of 1931.
President Obama should announce a national jobs emergency. Infrastructure projects listed under this rubric should be fast-tracked through the environmental review process, with approvals granted within 60 days. Additionally, the requirement that people have to be paid union wages should be suspended, so that skilled and unskilled workers can be hired.Congress created incentives not to use low-wage migrant workers by guaranteeing projects pay local prevailing wages in the Davis–Bacon Act
The Davis–Bacon Act of 1931 is a United States federal law which established the requirement for paying local prevailing wages on public works projects. All federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar projects.
The act is named after its sponsors, James J. Davis, a Senator from Pennsylvania and a former Secretary of Labor under three presidents, and Representative Robert L. Bacon of Long Island, New York. The Davis-Bacon act was passed by Congress and signed into law by President Herbert Hoover on March 3, 1931.
Zakaria's suggestion that the President declare a "national jobs emergency" is key because the DBA can be suspended during national emergencies as has happened 4 times, twice by a Bush.
In 1934 President Franklin Roosevelt suspended the Act for three weeks in order to manage administrative adjustments in light of the New Deal.Just to put this union busting corporate power grab into perspective, the prevailing wage in New Orleans was $9/hour. Bush thought that $9/hour was too high a wage to rebuild New Orleans!
The Davis–Bacon Act was suspended by President Richard Nixon for 28 days in February 1971 in an effort to reduce inflation pressures. Labor Secretary Peter J. Brennan accused the Nixon administration of treating construction workers as patsies. Shortly afterward, Nixon reinstated Davis-Bacon enforcement and ordered the establishment of the Construction Industry Stabilization Committee.
In September 1992 President George H. W. Bush indefinitely suspended the Davis–Bacon Act during the recovery from Hurricane Andrew in 1992. After Bill Clinton became president, he reinstated the Act in March 1993.
On September 7, 2005, President George W. Bush, citing a national emergency, again suspended the Act in the areas of Alabama, Florida, Louisiana and Mississippi ravaged by Hurricane Katrina. He reinstated it on October 26, 2005.
President Bush yesterday suspended application of the federal law governing workers' pay on federal contracts in the Hurricane Katrina-damaged areas of Alabama, Florida, Louisiana, and Mississippi. The action infuriated labor leaders and their Democratic supporters in Congress, who said it will lower wages and make it harder for union contractors to win bids.
The Davis-Bacon Act, passed in 1931 during the Great Depression, sets a minimum pay scale for workers on federal contracts by requiring contractors to pay the prevailing or average pay in the region. Suspension of the act will allow contractors to pay lower wages. Many Republicans have opposed Davis-Bacon, charging that it amounts to a taxpayer subsidy to unions.
In a letter to Congress, Bush said he has the power to suspend the law because of the national emergency caused by the hurricane: "I have found that the conditions caused by Hurricane Katrina constitute a 'national emergency.' "
Bush wrote that his decision is justified because Davis-Bacon increases construction costs, and suspension "will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals."
AFL-CIO President John J. Sweeney denounced the Bush announcement as "outrageous."
"Employers are all too eager to exploit workers," he said. "This is no time to make that easier. What a double tragedy it would be to allow the destruction of Hurricane Katrina to depress living standards even further."
Zakaria has been rightly focused on jobs and the US is clearly facing a national jobs emergency but reducing wages is not the way to satisfy Americans hunger for jobs. If this outrageous idea is a carrot to entice Republicans to pass jobs legislation then Americans need to object loudly. Let's not quietly let it pass that the call to reduce wages even more was eased into Americans' minds on CNN this Sunday morning, all made to sound so logical and patriotic.
Fareed Zakaria, CNN Obama should declare a jobs emergency
America's jobs crisis persists and there often seems to be little we can do about it. But there is one one area where government can create jobs - even if consumers are spending and businesses aren't hiring - and in a way that is productive for long-term growth: Rebuilding America. The American Society of Civil Engineers estimates that America's crumbling infrastructure needs $2 trillion worth of repairs, upgrades and expansions. With needs on that scale, President Obama's infrastructure proposals are at one-20th the size of the problem. We need a big plan and a grand bargain between left and right to get it.Let's leverage the experience in the recovery act to fast track readiness for construction projects without lowering standards. Reduce administrivia without reducing quality. Davis-Bacon, like environmental standards, protect the quality of these projects. Otherwise, public works work against the public.
The first element of the bargain would be funding. Already, there are several good proposals for infrastructure banks. Relatively small public investments can be leveraged to attract much larger sums of private capital. Compared with other nations, the United States has astonishingly little private-sector involvement in the building of infrastructure such as roads, bridges and highways. With interest rates at historic lows, borrowing $200 billion by issuing 30 or 50 year bonds to rebuild America would add just a few billion a year to the deficit.
Then you need to actually build it. Obama said he was surprised that there are so few shovel-ready projects. Well, the regulations, reviews and permits required to approve infrastructure ensures that any major project takes years, often decades, to be shovel-ready. In fact, one study of a set of infrastructure projects found that, of all countries examined, the United States has the highest proportion of projects stuck at the "pre-approval stage" - announced but still 3 to 10 years from construction. This is more than 3.5 times the number of such projects, by value, in Europe.
President Obama should announce a national jobs emergency. Infrastructure projects listed under this rubric should be fast-tracked through the environmental review process, with approvals granted within 60 days. Additionally, the requirement that people have to be paid union wages should be suspended, so that skilled and unskilled workers can be hired. In return for these exemptions, Democrats should seek $200 billion in capital for the new infrastructure banks, which could easily attract private capital of hundreds of billions within weeks.