Thanks, Unions! Davis-Bacon Delayed, Reduced Stimulus Effect

By February 19, 2010Energy, Labor Unions

Mickey Kaus, “Unions Are Crippling Obama–Exhibit A”:

Unions vs. stimulation: The home “weatherization” jobs in the stimulus bill were subjected to Davis-Bacon wage regulations–a favorite of the AFL-CIO Building and Construction Trades Department–under which federal Labor Department officials establish “prevailing wage” rates that must be paid. Why do unions like this system? Because the “prevailing wages” are determined in a way that guarantees they are usually more than the actual market wage, sometimes by large margins.  All that finagling takes a certain amount of bureaucracy, however–and time. ABC’s Jonathan Karl:

According to the GAO report, the Department of Labor spent most of last year trying to determine the prevailing wage is for weatherization work, a determination that had to be made for each of the more than 3,000 counties in the United States. [E.A.]

As a result, the Department of Energy apparently weatherized only 22,000 homes under the program. Another pre-existing program, which doesn’t have to comply with Davis-Bacon, appears to have weatherized about 100,000 homes, if my math is right.

That’s OK. It’s not as if speed was important last year in terms of putting people to work. … Oh wait, it was.

L.A. Times, “Top of the Ticket” blog, “Obama’s federal government can weatherize your home for only $57,362 each.” The Department of Energy has since pushed back against the GAO report discussed. That report is euphemistically entitled, “Recovery Act: Project Selection and Starts Are Influenced by Certain Federal Requirements and Other Factors.

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