President Obama today signed into law the jobs bill that will provide $18 billion in tax breaks to businesses and pumps $20 billion into highway and transit programs.
Don’t start gassing up all that idled machinery just yet Mr. Construction Industry.
Just because you throw money at a problem doesn’t mean it’ll always work (for an example, please see my 1994 Jeep Wrangler).
With the jobs bill, the government has decided to throw money toward infrastructure. That’s great, but it doesn’t mean new jobs will open up tomorrow.
According to a report from a professor at George Mason University, each $1 billion the government spends on construction projects directly employs 14,300 workers.
Here’s the problem: That $1 billion spent on construction is $1 billion less the government spends elsewhere in the economy, the private sector for example. So while one construction worker might find work building a road, an office worker in the construction industry might not get called back to work. All the while the deficit increases with more stimulus money being tossed around like it grows on trees.
Instead, how about suspending the Davis –Bacon Act, which requires government contractors to pay wages averaging 22 percent above market rates. Suspending the DBA would allow the government to hire new workers and build more infrastructure without increasing the deficit.
The DBA, when it was enacted in 1931, was a good idea. It required prevailing wages on public works projects and ensured many in the industry were paid solid wages for an honest day’s work.
But times have changed. I would rather see 1,000 construction workers paid a fair wage than 500 paid a prevailing wage.
Joe Yovino is the Web editor at The Daily Reporter. He should have worked prevailing wage into his salary.