Business Management the Davis Beacon Thesis

Excerpt from Thesis :

When the Davis-Beacon Act was developed it was established in order to stabilize the construction industry as well as promote fair wages. The way that the Davis-Beacon act is interpreted today in regards to prevailing wages, they tend to drive the price of the labor up unnecessarily causing tremendous expenses for the government. It also tends to promote unemployment because of the high price of the labor while discriminating against minorities in the construction industry. This act needs to be looked at again and amended so that it is more appropriate for today's times. Government expenses are at an all time high and having this act adding to those expenses is unnecessary. The act needs to be revised as to make free market competition available in the construction industry when it comes to government contracts. This would help to eliminate the excessive spending, the unemployment and the discrimination that is currently going on.

The Walsh-Healy act basically disallows suppliers of manufacturing and furnishing materials from buying such products and then raising their rates before re-selling them to the government to use on contracts over $10,000. It also requires employers with government contracts to pay prevailing wages at time and half the basic rate for hours in excess of 40 in a week. The Act requires payment of prevailing wages that have been defined by the Secretary of Labor as the same level as minimum wage under the Fair Labor Standards Act. It has also been found that the overtime requirements are essentially the same as those set down by the FLSA as well.

The good that has come from this act is that suppliers of manufacturing and furnishing materials are unable to inflate prices just because they are selling to the government. This has gone a long way in keeping prices down in an already over inflated market. It has on the other hand driven many small business suppliers out of the market because they are unable to compete with the big companies. Also in regards to requiring payment of prevailing wages it has really done nothing to accomplish the establishment of minimum wage scales on most government contracts. The National Labor Relations Board has basically stated that prevailing minimum wages are nothing more than the same as those established by the Fair Labor Standards Act.

Going forward this act needs to be amended to truly establish the minimum wage scales for government contracts as the originators of the act had intended. It also needs to establish procedures for making providing of manufacturing and furnishing materials fairer so that competition within the market can be carried out just like it is in all other sectors.

In order for labor practices in this country to be fair and promote growth and success there needs to be laws that govern such practices. Without such laws labor relations would be chaotic and harmful. But the laws that are in place, such as the Davis-Beacon Act and the Walsh-Healy Act, need to be changed to reflect the present times as the years have gone by. Both the Davis- Beacon Act and the Walsh-Healy act were right for their time, but are not seen as being right by today's standards. Both need to be amended and updated in order for them to be effective tools in regulating labor relations in this country, while promoting growth and free enterprise, which is what this country was built on in the first place.


Contracts for materials, etc., exceeding $10,000; representations and stipulations. (n.d.).

Retrieved June 30, 2009, from Cornell University Law School Web site:

Davis-Bacon and Related Acts. (n.d.). Retrieved June 29, 2009, from U.S. Department of Labor

Web site:

Federal Labor Laws. (1993). Congressional Digest. 72(6/7), p164-166.

Parvin, Cordell. (1997). Davis-Bacon Act: Who's not covered? Roads & Bridges. 35(2), p12.

Prevailing Wages in Construction Contracts. (n.d). Retrieved June 30, 2009, from United States

Department of Labor Web site:

The WorldatWork Handbook of Compensation, Benefits & Total Rewards. (2007). Retrieved June

29, 2009, from Google Books Web site:


Vedder, Richard and Gallaway, Lowell. (1999). Wages, Profits, and Minority Businesses. Society.

37(1), p88-93.

Online Sources Used in Document:

Cite This Thesis:

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