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Your Tax Dollars Not At Work   March 16th, 2009
Union wage requirements in stimulus package will reduce amount of work done       

 
QUICK OBSERVATIONS

More observations...
 

It's well understood that if you have a certain amount of money available, paying a higher amount for some amount of work will guarantee that you will be able to pay for less work. Nevertheless, Provisions in the stimulus bill guarantee that taxpayers' money will not buy as much infrastructure as it otherwise could. Stipulations that union wages rather than market wages be paid ensure that the taxpayers will get less bang for our buck, and fewer jobs that the package purports to create will actually be created.

State governments that contract jobs paid for with stimulus money will be required to pay workers on construction projects union wages rather than market rates -- good news for workers but good news for not as many of them...

Higher costs per project mean fewer projects completed, especially since some "shovel ready" projects were bid as non-union jobs. Some local officials and economists say the union wage mandate means taxpayer dollars won't be stretched as far as otherwise was planned...


In other words, this provision forces the government to pay more money than it needs to. There may be companies willing to do the work for $15/hour, but the legislation may require that the companies be paid $25/hour. Non-union companies may have already bid a project for a million dollars but the legislation will require the companies to re-bid at union rates which may cause them to increase their bid to $1.5 million, or whatever it might be... for the same amount of work. Companies will be forced to bid less competitively than they otherwise would or could.

The result is that the taxpayers will end up with fewer completed projects and fewer people will be employed to do those fewer jobs. Granted, those people lucky enough to get a job will be paid a bit more... but, again, there will be fewer of those lucky people. Doesn't that kind of go against Obama's very own mantra of "it's better when you spread the wealth around?"

This stipulation guarantees that fewer people will benefit from the infrastructure spending, fewer jobs will be created, and that we'll get fewer roads and bridges from the money we've spent.

On the flip side, organized labor says it is about time workers were making higher wages, and people should not have to work three jobs to live a middle-class life.


It's getting increasingly frustrating to see people suggest that you can legislate prosperity. A job that's worth $15/hour doesn't become worth $25/hour just because a union insists on it or because the government imposes a minimum wage. You can't just mandate that a union job should be paid more because it's not "fair" that the pay rate isn't enough to live a middle-class life.

Any time wages are artificially increased beyond their natural market level, people will lose jobs. It's no more sustainable than housing prices that increased irrationally. The free market must be free to work efficiently.

Mandating that the government overpay isn't going to help anyone other than unions to which the administration owes some payback.


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