Congress's deconstruction theory; how Congress is beating the low cost of construction.

• Author: Barry, Patrick
• Position: Includes related article

Congress's Deconstruction Theory

What if there were a way to build more low-income housing, invigorate the national economy, and help the small business owner, all in one shot? What if the stroke of a congressional pen would help rebuild the nation's crumbling bridges and highways even as it reduces the budget deficit? While we're dreaming, why shouldn't this same initiative help minority and female workers gain a foothold in one of America's highest paying industries?

Such an opportunity exists. But standing in the way are two powerful groups that are so busy defending an old-fashioned idea that they are blind to its shortcomings. The culprits: Big Labor and its mostly Democratic support team in Congress. Even though each could score important gains in membership and power with the right move, they're not making it.

What's needed is the repeal or substantial reform of the Davis-Bacon Act, a law passed in 1931 to protect construction workers from being exploited. It was a reasonable idea back then, before minimum-wage and other labor laws were in effect. It set a "prevailing wage" on federally supported building projects, effectively guaranteeing a decent paycheck for the brickmasons and carpenters who built that era's post offices and highways. Today, though, the law has a different effect. It is a business-stifling paperwork monster that costs taxpayers $12 million annually just to administer and as much as $1 billion a year in added construction costs.

So says just about everyone, from Ronald Reagan to the Association of Minority Contractors of America to left-leaning nonprofit housing groups like Chicago's Bethel New Life, Inc., whose efforts to build low-income housing are hindered by high labor costs and dwindling federal support. A study by Oregon State University in 1982 found that the act drove up construction costs in rural areas by 26 to 37 percent. In 1979, after the GAO conducted studies of Davis-Bacon that led to negative conclusions, it did a full-scale investigation that found a program so difficult to administer fairly - and so expensive to the nation - that it wrote a scathing report with this breath-takingly concise title: "The Davis-Bacon Act Should Be Repealed."

Sacred pig

That was 10 years ago, but the act lives on, as does the cult-like respect for it on Capitol Hill. A good measure of that idolatry came last November when the Senate Labor and Human Resources Committee rejected the Bush nominee for head of the Labor Department's wage and hour division, Debra Bowland. No Democrats on the committee questioned Bowland's ability, but in voting against her, they pronounced her guilty of something apparently much worse than incompetence. Bowland's defect? She opposed Davis-Bacon.

From lock-step thinking like that, you'd never guess this legislation costs taxpayers $2.8 million a day, or, if you'd rather, $10 billion a decade. And that's only the drain on the federal budget; it doesn't take into account what that $10 billion could buy in the way of new roads to help U.S. factories institute just-in-time shipping or new housing to inject some life into the Bronx or Watts. Nor does it reflect the stifling effect the law has in the inner city, where unemployed workers are looking for entry-level jobs - not a $26-an-hour wage that no one will pay them.

"You want to know how to solve the low-income housing crisis? Get rid of Davis-Bacon." That's what Elzie Higginbottom says, and Higginbottom builds low-income housing in Chicago's grim South Side ghetto and manages his 2,500 units with a magic touch. Down the street from Chicago's biggest highrise projects, where graffiti mars the hallway outside the police station and where stores hide behind steelplate security doors, Higginbottom's manicured and tightly managed properties somehow repel broken glass and gangs. He has built high-rise housing downtown as well, luxury housing, establishing a reputation among developers and government regulators as someone who knows how to work federal guidelines for all they're worth. But he can't beat Davis-Bacon.

The Higginbottom line

The law requires Higginbottom to pay the prevailing wage to all workers on federally assisted projects of more than 11 units. In Chicago, that means...