A Shameful Proclamation

NYT reported On Thursday, President Bush issued a proclamation suspending the law that requires employers to pay the locally prevailing wage to construction workers on federally financed projects. The suspension applies to parts of Louisiana, Mississippi, Alabama and Florida. By any standard of human decency, condemning many already poor and now bereft people to subpar wages - thus perpetuating their poverty - is unacceptable.

You have a LOT of people out of work. Do you really want to force employeers to go through the large pool of potential employees to find the few with enough experience to justify a high wage, or would it not be better to get a lot of people back to work, and drawing a paycheck, immediately.

It is also bad for the economy. Without the law, called the Davis-Bacon Act, contractors will be able to pay less, but they'll also get less, as lower wages invariably mean lower productivity.

There is no justification for a stupid statement like that. It is the law of supply and demand, and in times when there is huge demand for jobs, wages will go down.

EconoPundit blogged Only a little checking on the internet turns up evidence the Davis Bacon Act protects a small minority of privileged workers by enshrining into law the (then and partially-still) lilly-white labor aristocracy of the 40's and 50's. The same checking also uncovers lots of evidence the Act raises construction costs and lengthens project times by seriously complicating hiring procedures. What's most "shameful" in all this (to use NYT-language) is the editors' assumption readers can't easily check on the internet to find the other side of the argument. Labor advocates will charge Bush is opportunistically tampering with labor law -- in effect, using the Katrina disaster to further weaken organized labor's position. They'll do so at risk of sounding like opportunists themselves, however. The Bush side of the argument appeals to intuition. Most Americans would agree any labor law to which the rebuilding process is subject should be as simple as possible. If the NYT is going to argue against this intuitively obvious proposition, it should do so without invoking junk economics (e.g. the laughable statement "lower wages invariably mean lower productivity").