May 24, 2006

Temporary Workers and the Davis-Bacon Act

A reader writes:

Excellent coverage of the "guest worker program," one of the most awful ideas anybody has proposed since the 1960s. However, it seems to me the Democrats have done us a favor:

The bill extends Davis-Bacon "prevailing wage" provisions — typically the area's union wage that applies only to construction on federal projects under current law — to all occupations (e.g. roofers, carpenters, electricians, etc.) covered by Davis-Bacon. So guest workers (but not citizen workers) must be paid Davis-Bacon wage rates for jobs in the private sector if their occupation is covered by Davis-Bacon. Presumably because Senate Democrats' union bosses thought this provision too modest, an amendment by Senator Barack Obama, approved by voice vote, extended Davis-Bacon wages rates to all private work performed by guest workers, even if their occupations are not covered by Davis-Bacon.

Doesn't this mostly neutralize the program, since no employer is going to import Pakistanis to work at $15 an hour? Maybe Microsoft can bring in a few more Indian programmers, but how do would-be sweatshop owners overcome this requirement? (Of course these rules might not be effectively applied. And it would obviously be better not to have indentured servitude written in our laws, even if it is neutralized by other provisions.)

I suspect the procurers can figure out a way around this, such as via upfront fees or kickbacks or whatever. For example, currently under the deal that farmworker procurer Motty Orian worked out with the UFW, his firm gets from the growers $4 per hour worked by guestworkers that they pocket. So, the cost to the growers is quite high, not far off the Davis-Bacon wage, I imagine.

If the government really enforced the Davis-Bacon law in the future, and I was him, I'd charge farmworkers back in their own country a big upfront fee to get into the program, then I'd pass on that $4 per hour to the workers and not collect an hourly fee. I'd come out about the same.

In general, once people are physically within the United States, the laws passed by Congress take a backseat to the Law of Supply and Demand.

My published articles are archived at -- Steve Sailer

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