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Jun
2014
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Hot Topic: Davis-Bacon, Prevailing Wages Suddenly the Talk of the KY Senate Election

Recent polls show Democratic challenger Alison Lundergan Grimes up 3 points.

Recent polls show Democratic challenger Alison Lundergan Grimes up 3 points.


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As the race to represent Kentucky in the U.S. Senate heats up between incumbent Republican Mitch McConnell and popular Democrat Alison Lundergan Grimes, the prevailing wage is becoming an unexpected pivoting point in the race.  The Senate Minority leader may be attempting to shed his image as a major driver of obstruction in Washington (and Congress’ six percent approval rating), but he’s taking an odd approach: By attacking working people across Kentucky.

Last week, in a move the Grimes campaign labeled “desperate,” McConnell attacked the American Federation of Government Employees (AFGE) even though two of its locals had endorsed him for reelection.  Not satisfied with back-stabbing public sector workers, McConnell announced a push to repeal the Davis-Bacon Act under the guise of improving infrastructure.  According to McConnell, spending on roads and bridges can only come at the expense of the people building and repairing them.

Perhaps not surprisingly, the latest round of polling (from Republican-leaning Magellan Strategies nonethless) shows Grimes has surged to a three-point lead.  

McConnell’s lack of connection with reality is evident in his plan to gut the prevailing wage before a hotly contested election.  In defense of his proposal he cites a report from the nonpartisan Congressional Budget Office (CBO).  The problem? He is misinterpreting the report. The CBO makes it clear that McConnell’s plan would:

• Lower the earnings of construction workers;

• Decrease the amount of jobs for Kentuckians on in-state projects;

• Jeopardize the quality of public works projects.

Laying out the facts for working class Kentuckians, the Grimes campaign notes McConnell’s false claims, explaining that a repeal of Davis-Bacon would have a chilling effect on wages:

— McConnell’s Plan Would Cut Kentucky Jobs, Decrease Wages, And Result In “Lower-Quality Work.”
The CBO wrote, “An argument against repealing the Davis-Bacon Act is that it prevents out-of-town firms from coming into a locality, competing with local contractors for federal work using lower-paid workers from other areas of the country, and then leaving the area upon completion of the work. Another argument against repealing the act is that doing so would lower the earnings of some construction workers. An additional argument against such a change is that it might jeopardize the quality of construction at federally funded or federally assisted projects. When possible, managers of some construction projects would reduce costs by paying a lower wage than what is permitted under the Davis-Bacon Act. As a result, they might attract workers who are less skilled and do lower-quality work.” [CBO, 11/13/13]

— Repealing Kentucky’s Prevailing Wage “Will Not Lead To Lower Construction Costs.”

A report from a University of Utah economist stated, “We will see below that paying workers less will not lead to lower construction costs because lower wage rates result in lower labor productivity. Construction is a skilled occupation that relies on the construction worker’s training, experience and judgment in order for the job to be done safely and done right the first time. Pushing wage rates down to $14 per hour runs the risk of losing skilled and experienced workers, increasing labor turnover, endangering the safety of the job and interrupting the workflow through mistakes and accidents.” [Peter Philips, accessed 6/23/14]

For Grimes, the pitfalls of weakened construction wages are obvious:

Repealing Kentucky Prevailing Wage Legislation Would Cost Kentucky Workers $250 Million A Year, Decrease Tax Revenues $20 Million A Year. A report from a University of Utah economist stated, “Using Kentucky’s annual average construction employment and earnings over the 2003-2012 period as the baseline, we find that in the absence of prevailing wage laws: Construction blue-collar earnings will be lower in Kentucky by $75 to $152 million (in 2013 dollars), or 3.2% to 6.5% of the blue-collar construction wages…Taking this induced effect into account, the total lost income to Kentucky workers inside and outside of construction ranges from $125 to $252 million annually…Kentucky would lose from $10 million to $20 million in tax revenues annually.” [Peter Philips, accessed 6/23/14]

Lundergan Grimes recently earned the endorsement of the powerful International Brotherhood of Electrical Workers (IBEW).

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