wage rates to be resumed and to be continued. The only solution is the prompt repeal of these laws, and certainly, to begin with, the elimination of all Davis-Bacon Act requirements in the Federal Housing programs. A specific example of inequities caused by application of the Davis-Bacon Act is cited in a letter attached to our printed statement from Mr. David R. Bean, President of Bean Construction Company in Keene, New Hampshire. Mr. Bean relates in detail the differences in wage rates on two similar side-by-side construction jobs, one subject to Davis-Bacon rates, the other bid during the Davis-Bacon suspension of 1971. The same type of work was performed on both jobs, but there were differences in hourly rates paid as follows, the Davis-Bacon rates first: Laborers $4.30 versus $3.25; and so forth. Mr. Bean goes on to estimate a savings of $15,000.00 on his work done as a general contractor due to the suspension, and over $4,000.00 for only one of his subcontractors. An additional $10,000.00 savings is estimated for the remaining subcontractors, for a total estimated savings of roughly $30,000.00. The total contract price on the job was $220,000.00, the savings estimated amounting to some 12%. When it is realized the materials and non-wage services amount to roughly half the contract price, and do not fluctuate with Davis-Bacon applicability, the amount saved emerges as roughly one-quarter, since wages represent roughly half the contract price. In another example from a member, also appended, a contract which was disallowed by the Wage Determination Board of the Department of Labor would have saved an overall 8%, or 15% in wages. The contract was agreed to and is still supported by the unions, management and owners in an effort to create more housing at reduced cost. The govern ment alone (Wage Determination Board) disputed it. A package of two final examples, again appended, was prepared by the Mississippi Valley Flood Control Branch of AGC, and concerns first, two projects parallelling each other, one on the Mississippi River, and the other about two miles away on the Gulf. Both projects were constructed under Davis-Bacon, but the rates are vastly different. The projects were similar, but the Gulf project rates, established on the basis of highway construction work (although it amounted to the same levee work as the river project) were 98% higher. The average hourly rate on the river project was $2.71, while the same kind of construction was performed on the Gulf at an average rate of $5.38. The only justification was a Department of Labor decision. The second example of the pair was also on the Mississippi River; it concerns a project divided into two sections, one in Davis-Bacon territory, and one in an open shop area. The difference in the average hourly rates reflected a 104% increase, due to Davis-Bacon. A LABOR DAY STATEMENT By C. J. Haggerty, President Building Trades Department "On this Labor Day of 1970... this may be the occasion when we might appropriately and beneficially indulge in objective self-appraisal, in an assessment of what we stand for and what we will not stand for. Since we are not flawless, since we never have pretended to be without faults, such introspection would reveal our shortcomings as well as our strengths. There is no doubt that we have the finest craftsmen in the world. We have the finest training programs. Each year we put in place a volume of construction greater than anywhere in the world. We know these things. We are properly proud of these things. Being strong, we should have no apprenhension about raising and considering some fundamental questions about some of our shortcomings, such as: Are we using our skills and our productive capacity to deliver a full day's work for a full day's pay? Do we honestly and rigidly observe the provisions of our collective bargaining provisions? Is our rate of absenteeism and quits higher than normally should be expected because of personal whims rather than actual illness or other compelling reasons? Are the continuous and devastating work stoppages as a result of jurisdictional disputes justified in any way at all?" RESTRICTIVE PRACTICES OF THE BUILDING TRADES PART I HISTORY, REASONS, EFFECTS "The most powerful oligopoly in the American economy today is 1 This same Building Trades group gave lip service to the "Ten Commandments'' in 1958. This set of rules provided for the suggested elimination of all those evils of construction, caused by an abuse of union power. There was no enforcement of the provisions of the document and its contents have apparently faded from view. Just as important a consideration in determining excessive costs in construction are the restrictive practices of the building trades. These restrictive practices fall into four broad catagories of concern: a. Jurisdictional Disputes b. Building Codes c. Apprenticeship and Training d. Working rules It has been argued that restrictive practices give some protection both to employers and the labor force in face of cylical variations in construction volume. This, of course, is what they were intended to do; and the question may be raised, as indeed it was on one occasion by Justice Brandeis, whether industry would be better off if subjected to the full force of a relentless competition or whether there are limits to which competition may be "desirable" and within which some restraint may be justified. 2 If this were the only consideration, the trade restrictions could be treated simply as a possible contributor to the continuity of building activity. But there is little evidence that in any real sense they make such a contribution. They have been more effective in cost maintenance than in employment maintenance; and they certainly have not prevented construction activity from sinking to disasterous levels. Many of the common restrictive measures do not merely stabilize costs but tend rather to increase them above a level that known techniques and inherent productivity would otherwise permit. This has been accomplished by discouraging technological advancement and thwarting incentives to increased productivity. They have, in other words, prevented growth. As a result, buyers of construction have been forced to pay more than necessary while the construction industry itself has suffered from artifically created limitations on its potential market and on its ability to meet the changing characteristics of demand. As instruments for effectuating true industrial stability, trade Although resistance to technological advance and the restriction of output were used as techniques to safeguard jobs late in the nineteenth century in the United States, the full-fledged development of restrictive practices with its many ramifications did not occur until the twentieth century was well under way. The hope of holding the same job through an entire working life became less realistic. Strong unions sought ways to protect their members from the scourge of unemployment and technological displacement. Make work policies were adopted in many instances. Economic security has become one of the major goals of workers, unions, and the labor movement, but this orientation has raised questions as to whether economic growth, a factor necessary to develop and maintain higher standards of living, will be adversely affected. Thus far, economic theory has provided few answers to the complicated problems connected with restrictive practices, also known as featherbedding. |