Unions Cost Taxpayers Money

March 10, 2010 at 11:02 am

Representative Steve King from Iowa has a hell of an idea on How to Save $11.4 Billion This Year, posted March 4th in The American Spectator. Repeal the Depression-era Davis-Bacon Act, a subsidy designed to protect American blacks from being barred from construction jobs by mandating “prevailing wages” in public contracts. In practice prevailing wages are inflated union wages. As King points out, “Davis-Bacon wage rates are on average 22% higher than the standard wage rate in an area. Similar Heritage research¬†revealed that, under Davis-Bacon law, the government pays four workers artificially inflated wages the same price it could pay five workers the local market rate.” So Obama’s “stimulus” which requires Davis-Bacon wages either costs the taxpayers a 22% wage subsidy premium or decreases construction employment by 20%!

So you would hope that given the serious deficit and 9+% unemployment, Obama would embrace this practical idea. Alas, you would be wrong. As pointed out editorially in yesterday’s WSJ, the White House is all about, Procuring the Union Agenda. Seems that Joe Biden’s “Middle Class Task Force” is drafting an Executive Order for Obama that would “oblige government procurement agencies to give contracts to “responsible contractors” who pay workers well and offer higher health, pension, sick leave and other benefits. These new mandated labor standards would have to be enforced across a company, not just at the unit bidding for a contract.” It is this new twist that puts the Davis-Bacon Act on steroids!

Unlike the disjunctive, “EITHER inflate taxpayer costs OR decrease employment” of Davis-Bacon, this executive order by expanding Davis-Bacon beyond the bidding unit will “BOTH inflate costs AND decrease employment.” The greatest adverse impact here is on small businesses, formerly the job creation engines of this economy!

So instead of competitive bidding to get the best quality at the best price, we have the Obama administration doing the unions’ bidding. Obama is owned by the unions; at least they own the biggest part of him!

Tom Motherway