From the Wall Street Journal--paid registration required.
We've long argued that the federal government's super-minimum wage requirements for construction projects are union payoffs that bilk taxpayers. So we're delighted to see that no less a liberal bastion than the District of Columbia government agrees.The District--and the private contractor--are suing in federal court.
In late May the district sued to overturn a federal Department of Labor ruling that applied Davis-Bacon to a $700 million downtown development project called CityCenterDC. Davis-Bacon is the 1931 law that requires contractors on all federal projects to pay a "prevailing wage"—which means the highest local union wage. Study after study has shown that the law inflates costs and mires projects in red tape.
As bad as Davis-Bacon is, it has at least only applied to "public" buildings or works—meaning those funded, owned or occupied by the U.S. or D.C. governments. CityCenter meets none of those requirements. Private developers are funding the project, and neither the federal nor D.C. governments will occupy CityCenter. In 2009 the Carpenters Union petitioned to have Davis-Bacon applied, but a civil servant in the Labor Department's Wage and Hour Division declined.
Yet in June 2011 Nancy Leppink, the acting administrator of Wage and Hour and an Obama appointee, summarily reversed that ruling. She took the position that while the D.C. government has leased the land to developers for 99 years, it still technically owns it and retains some (token) regulatory construction oversight. She added that because CityCenter will supply jobs and tax revenue for the city, these "economic benefits" mean the project is a "public work."
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