http://news.moneycentral.msn.com

October 26, 2005 11:42 PM ET
Bush reinstates prevailing wages for Katrina work

The Bush administration on Wednesday yielded to growing bipartisan pressure and agreed to reinstate a workers rights law - the Davis-Bacon Act - that had been waived in the immediate aftermath of Hurricane Katrina.

The emergency order allowed federal contractors rebuilding areas destroyed by the hurricane to pay workers less than the area's prevailing wage.

The suspension of Davis-Bacon on September 8 had been widely criticised by lawmakers on both sides of the aisle and union leaders, who said the act further undermined a workforce that had been devastated by the storm.

"You may save a couple of dollars an hour by suspending Davis-Bacon, but you invite all kinds of other problems, including the hiring of unskilled workers and illegal workers in the Gulf Coast," said Frank LoBiondo, a New Jersey congressman.

A White House spokesperson on Wednesday said the law allowed temporary waivers of Davis-Bacon and that the administration had said all along that its action was due to special conditions.

Democratic lawmakers praised the White House's reversal, claiming that the move was the result of pressure from Democrats, labour leaders and religious groups.

"Bush reversed his decision after a public outcry and bipartisan opposition to his worker pay cut in the House and Senate," said John Sweeney, president of the AFL-CIO, the labour union.

Copyright 2005 Financial Times