The $17.8 Billion in 'Savings' Is Mostly a Pay Cut

Congress writes a wage floor into nearly every federal construction contract.▸ The Davis-Bacon Act, passed in 1931 and now backed by more than 70 related statutes, sets minimum pay on an estimated $217 billion a year in federal and federally assisted construction spending, covering roughly 1.2 million U.S. construction workers, according to the Department of Labor's own 2023 rulemaking. In April 2026, seven U.S. senators introduced a bill to repeal it outright, citing a Congressional Budget Office estimate: $17.8 billion saved over ten years. CBO's own accounting of that figure says most of it isn't paperwork or fewer contracts — "the reduction in wages and benefits would account for most of the savings from repeal." The floor being repealed for savings has, for two decades, run on wage data a federal watchdog called unreliable.

The Department of Labor's Wage and Hour Division sets Davis-Bacon's "prevailing wage" by surveying what contractors actually pay, by trade and by county, then publishing the rate paid to the majority of workers in each classification.▸ Contractors on covered federal or federally-assisted contracts over $2,000 have to match it. The survey that produces that number has a documented skew: GAO found that of Labor's published key-classification wage rates as of November 12, 2010, 63% were "union-prevailing" — set by the rate in a collective bargaining agreement — even though only 14% of construction workers nationwide carried union representation that year, per the BLS data GAO cites. Labor's survey process doesn't test whether respondents represent the local workforce, and GAO found nonunion contractors were more likely to skip the survey altogether, in part because they have a harder time compiling the paperwork.

Union and nonunion rates update on different clocks.▸ Union rates shift automatically when a new collective-bargaining agreement is signed; nonunion rates only move when Labor completes a fresh area survey — a process GAO found could take years. As of that same November 2010 snapshot, 75% of union-prevailing rates were three years old or less, versus 36% of nonunion-prevailing rates; 46% of nonunion rates were a decade or older. A 2004 Labor OIG sample, cited in the same GAO report, had already found errors in almost 100% of the wage survey forms Labor's own analysts had reviewed and "verified."

By 2018, that gap had calcified into rates that were decades old.▸ The Department of Labor's own Inspector General found that of 134,738 unique published wage rates in Labor's system as of September 2018, 3% — roughly 4,000 rates, the majority of them nonunion — hadn't been revised in 21 to 40 years, some untouched since between 1978 and 1997. The IG traced real contracts built on them: a federal solicitation in May 2017 carried a nonunion wage rate last updated in 1988; a $140 million Texas construction contract awarded in fiscal year 2013 used nonunion rates also last set in 1988; a New York contract worth $100,000 to $250,000 in fiscal year 2017 did the same. Puerto Rico spent $38.2 million on covered construction between 2014 and 2017 under a wage determination last revised in 1995 — a rate the IG found was still unchanged as of December 2018. Zoomed out, the disparity from 2010 hadn't closed: 10% of nonunion wage rates were more than 10 years old, compared with less than 1% of union rates. The Inspector General made eight recommendations; Labor agreed with all of them.

In August 2023, Labor finalized its first comprehensive overhaul of the Davis-Bacon regulations in nearly 40 years, aimed partly at the IG's findings — allowing adoption of qualifying state and local prevailing-wage data, and expanding coverage to close gaps the agency said contractors were exploiting.▸ Enforcement narrowed this year: on June 24, 2026, a federal judge in the Northern District of Texas vacated three of that rule's expansions — coverage of onsite materials suppliers, coverage of delivery truck drivers, and retroactive application to contracts that omitted the required wage clauses — after the Trump administration's Labor Department settled litigation brought by the Associated General Contractors of America rather than keep defending them. The Act itself, and most of the 2023 rule, remain in force.

Then, in April 2026, Sen. Mike Lee and six co-sponsors introduced the Davis-Bacon Repeal Act, calling the 95-year-old law "an antiquated piece of legislation that hurts middle class workers."▸ Its evidence is the CBO's $17.8 billion, 10-year outlay-reduction estimate — a figure CBO itself attributes mostly to lower pay for the same 1.2 million workers the law was written to protect, not to fewer contracts or less construction. The survey system that sets their floor has been flagged as stale and unrepresentative in federal audits from 2004, 2011, and 2019 alike; the bill does not propose to fix it. It proposes to remove it.

Coverage and worker figures are the Department of Labor's 2023 estimate; wage-rate currency and representativeness data reflect GAO's November 2010 snapshot and the Inspector General's September 2018 snapshot — the most recent point-in-time audits either agency has published.