Highway Reform Bill Takes Aim at High Labor Costs

Published April 1, 2009

Congresswoman Virginia Foxx (R-NC) has introduced H.R. 687, the Highway Trust Fund Reform Act of 2009, which may reinvigorate discussion of two of the most costly aspects of federal transportation funding.

The measure would repeal Sections 113 of Title 23 and 5333(a) of Title 49 of the United States Code.

Section 113 of Title 23 applies federal Davis-Bacon prevailing wage requirements to federal highway program contracts. This provision was added to the law because states contract for most highway projects that involve federal funding, and many states do not have prevailing wage laws. Davis-Bacon prevailing wages usually drive costs far higher than what truly prevails, however, because union wages dominate even though most workers do not belong to unions.

In addition, the U.S. Department of Labor makes separate wage determinations for highway work that are usually even higher than those on other building construction covered by Davis-Bacon.

Section 5333(a) of Title 49 is also known as Section 13(c) of the federal transit law. It requires transit agencies to reach an agreement with labor unions before federal transit funds can be released. That gives labor unions virtual veto power over transit grants.

Labor unions have used this leverage to demand contract and other concessions that saddle urban mass transportation with high labor costs. The 13(c) agreements also virtually guarantee nothing can be done to bring labor costs under control.

— David Denholm