This Labor Day, Celebrate Your Local Flagman
by Morgan Reynolds
by Morgan Reynolds: Moon
Dust, Rocket Engines, and NASA
A few weeks
ago I was charging along on U.S. 50 in West Virginia, enjoying the
stateís great August weather during a brisk, twisty ride up a mountain
on my motorcycle. Then east of Aurora I turned south onto WV 24
and soon encountered a flagman stopping traffic for highway repair
work. I was the sole motorist there for a while and it didnít take
me long to dismount from my black Honda ST1300 and strike up a conversation
with the flagman.
She was an
attractive young lady, friendly too, an undergrad at WVU. After
a few minutes of conversation, ice appropriately broken, I asked
her what she made at her job. Somewhat embarrassed, she answered,
"$35 an hour." "Wow, thatís incredible," I responded.
I blurted out Ďincredibleí as anyone might, even though I knew right
away why she was overpaid. Itís called the Davis-Bacon Act. In the
absence of this intervention, of course, her market wage for performing
such unskilled work would have been more like $12 an hour. Any responsible,
able-bodied adult could immediately and competently perform her
job of talking into a walkie talkie and turning the sign from "STOP"
to "SLOW" and back again. Oh yes, some days she drove
the "FOLLOW ME" pick-up truck too.
My dear wife
was none too happy to hear what the flag(wo)man made. Pat
exclaimed, "But Iím responsible for the lives of all these
I guess the flagman could reply that sheís responsible for highway
worker and motorist safety too, but does anyone see these responsibilities
and skills demanded as comparable? Pat is an RN who graduated from
a prestigious Philadelphia nursing school back in 1967, earned a
bachelorís degree in business at a small West Virginia college in
the 1990ís (salutatorian), and held many responsible positions in
nursing over the years. She currently works part-time as an RN for
a nursing home chain in Arkansas, traveling the state as necessary
and earns $28 an hour with few fringe benefits, most prominently
two weeks paid vacation annually. RNs average $33
an hour nationally and $69,000 per year.
of the mountain state earn only about 80% of U.S. median or mean
hourly wages, and average under $18 per hour across all occupations.
West Virginia is saved only by Mississippi from being the lowest
income state. In Preston county WV, home of highway 24, the
average residentís weekly pay is $704
while nationally average pay across all occupations and industries
is $955. The lovely coed flagman would make $1,400 per 40-hour week,
twice that of the typical wage earner in Preston county and considerably
above average national pay too.
Act was passed in 1931 after a sharp decline in construction activity
at the beginning of the Great Depression. The law requires that
workers on federally financed construction be paid wages at "local
prevailing rates" for comparable construction jobs. The clearly
stated intent was to protect local workers from competition (horrors!
competition! be gone!) by migrant workers and contractors. Many
contractors and building trades unions welcomed monopoly protection
from what one congressman declared "carpetbagging sharpie contractors."
and virtual impossibility of determining what exactly is the "prevailing"
wage rate for each occupation has allowed the U.S. and state departments
of labor (like WV) administering their little Davis-Bacon Acts to
fix minimum rates at union wage rates in about half of its wage
determinations. Government-determined wage rates sharply compress
the wage structure compared to market rates too. In Preston county
WV, for example, federal construction wage minimums range from $37
per hour in wages plus fringes for Class 3 Laborer, which includes
flagman, to $48 per hour for certain power equipment operators and
$49 per hour for electricians at the top of the "labor aristocracy"
level. Even the West Virginia Division of Labor imposes a rate of
$30.58 for a flagman in Preston county. Donít ask what the Davis-Bacon
labor rates are in New York City. OK, just double those in Preston
county WV and you will be close.
wide variety of groups including the Government Accounting Office,
The New York Times, the U.S. Chamber of Commerce, Associated
Builders & Contractors, and many economists have urged repeal of
the act(s). Construction workers are among the highest paid in America
although only about 20 percent of all construction work is regulated
by Davis Bacon and the parallel state governmentsí "little"
Davis-Bacon acts. Ten states have repealed their little Davis-Bacon
acts and eight states never had one.
Among the deleterious
effects of governmental overpricing labor is sharply boosted cost
of building and maintaining "infrastructure" including
schools, streets and highways, ports, and airports, probably 30
percent more expensive, thereby ripping off taxpayers; reduced employment
among unskilled and low skilled labor; shriveled "stimulus"
impacts of government spending; and jobs and income transferred
from local contractors and their employees to organized labor and
unionized contractors. Davis Bacon also discourages minority contractors,
most of whom are nonunion, from bidding on government contracts,
contrary to government policy aimed at favoring minority enterprises.
Reynolds [send him mail]
is professor of economics emeritus, Texas A&M University, and
a former chief economist in the U.S. Department of Labor. Visit
© 2012 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
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