Business, labor leaders puzzle over Trump contracting remark

By SEAN HIGGINS (@SEANGHIGGINS) 

4/12/17

Labor and business leaders have been buzzing over a cryptic remark President Trump made this month about an apparently imminent change to federal contracting rules.

Trump told the New York Times in an April 5 interview that he would make an announcement "in two weeks" regarding the wages that must be paid by contractors under a law known as Davis-Bacon. He offered no other details but added, "It's going to be good."

That led many to assume he was planning to change the formula for determining contractor wages, though whether it would be higher or lower was anyone's guess. It is apparently a mystery even to the Labor Department, which is charged with enforcing Davis-Bacon. A source at the department who requested anonymity said they could not confirm if a change was being made and indicated that they hadn't been given a heads up that one was coming.

Sean McGarvey, president of the America's Building Trades, a union coalition group deepened the mystery further when he told McClatchy on Monday that he didn't think Trump would substantially alter the rule. He must have been misquoted or he misspoke, McGarvey said.

"The president has been consistent for going on two years now that one of his main goals is to increase the economic opportunity and raise wages for Americans and it would go against his stated goals to do away with a law that just maintains a level paying field, let alone raises people's wages," the labor leader told McClatchy. McGarvey was one of few union heads to have had a face-to-face meeting with Trump, having been present at a January confab.

An administration spokesman could not be reached for comment.

Trump made no mention of Davis-Bacon in an April 4 speech to McGarvey's group, but he did talk generally about improving construction worker wages. "It will be a whole different story [under my presidency]. Because in the last decade, you lost over 750,000 — think of this — 750,000 construction jobs. Real wages in the construction sector have fallen more than 15 percent since the 1970s."

Davis-Bacon requires federal contractors to pay workers whatever is the local prevailing wage for that work. The law is important to building and construction trades unions since it makes it virtually impossible for contractors to hire low-wage, non-union workers. Business groups have long chafed under it, arguing that it drives up wages and is cumbersome and time-consuming to comply with.