Prevailing Wage Legislation and the Continuing Significance of Race

David E Bernstein:

Since the early twentieth century, labor unions have lobbied federal and state governments to enact and enforce laws requiring government contractors to pay “prevailing wages” to employees on public works projects. These laws, currently active at the federal level and in approximately thirty states, typically in practice require that contractors pay according to the local union wage scale. The laws also require employers to adhere to union work rules. The combination of these rules makes it extremely difficult for nonunion contractors to compete for public works contracts.

Meanwhile, construction unions have been among the most persistently exclusionary institutions in American society. Not surprisingly, in many cases, the history of prevailing wage legislation has been intertwined with the history of racial discrimination. Economists and others argue that prevailing wage legislation continues to have discriminatory effects on minorities today. Union advocates, not surprisingly, deny that prevailing wage laws have discriminatory effects. More surprisingly, they deny that the granddaddy of modern prevailing wage legislation, the federal Davis-Bacon Act of 1931, had discriminatory intent.