|New Obama Administration Rule Greases Union Wheels, But Runs Over Taxpayers|
By Timothy H. Lee
Thursday, April 15 2010
Barack Obama promised to bring an end to old-style crony politics during his “post-partisan” 2008 presidential campaign.
This week, he again betrayed the fatuousness of his self-professed political raison d'etre by issuing a rule transparently rewarding his Big Labor campaign benefactors.
But don’t worry, America. The new rule promises to increase federal spending and the nation’s budget deficit even more. What a small price to pay for keeping labor bosses happy.
Under the Obama Administration’s new rule, federal agencies can only award large public construction projects to contractors who agree to union representation for workers. Under current law, union representation on federal construction projects was neither prohibited nor required, but the White House’s new rule makes it mandatory. As a result, intransigent labor unions will now possess the ability to make up-front bargaining demands on wages, hours and working conditions.
If you thought government projects were slow and inefficient already, just wait until Obama’s new rule takes effect and unions hold out for whatever concessions they choose to demand. Apparently with a straight face, Obama’s order pronounces that it “encourages the use of project labor in order to promote efficiency in federal procurement.”
Hey, it worked for the domestic auto industry, right?
What makes this new order particularly egregious is the fact that only 15% of the national construction workforce is unionized, leaving 85% of contractors excluded. That constitutes an enormous, immediate reduction in open and competitive bidding for federal projects. The economic rules of supply and demand often escape those on the political left, but did anyone within the administration pause to fathom what will happen when the supply of eligible contractors is suddenly reduced by 85%?
According to construction trade group studies, forcing unionization upon contractors increases the cost of public building projects by 20%. An independent study commissioned by the federal Department of Veterans Affairs concurs, stating that “the result of a project labor agreement that dictates work rules, double benefits, team structure and activities on non-union type contractors will be that production costs will increase – given these union-related requirements.”
Happy April 15, taxpayers of America.
Sadly, Obama’s costly new rule constitutes a raw political payback to Big Labor for its campaign support.
During the 2008 election cycle, labor leaders steered tens of millions of dollars toward Obama and Democrats. Indeed, the $85 million of workers’ hard-earned wages steered toward Obama by the Service Employees International Union (SEIU) alone constitutes the largest group contribution to either political party. For all of the recent talk of “unlimited corporate donations” following the Supreme Court’s Citizens United v. FEC decision, it speaks volumes that the SEIU spent more than any other organization on the 2008 election.
After steering so much of their members’ wages toward political campaigning, Big Labor naturally expected payback. Its wish list included Obama’s failed “stimulus” spending, the Detroit automaker takeover, ObamaCare and now this federal contracting rule. As noted by Associated Builders and Contractors Chairman Jim Elmer, “anti-competitive project labor agreements are special interest kickback schemes that end open, fair and competitive bidding on public projects.”
This new unionized contracting rule also comes on the heels of Obama’s recess appointment of pro-union radical Craig Becker to the National Labor Relations Board (NLRB). Becker has advocated back-door implementation via the NLRB of “card check” rules that would eliminate the secret ballot in union elections, since card check legislation appears stalled in Congress. Think of the Becker recess appointment as the card check version of “deem and pass.”
Sadly, the construction industry currently suffers an unemployment rate of 27%. For jobless workers in that hard-hit sector, however, the Obama Administration’s new rule will only make potential federal construction projects more costly and therefore more rare.
It’s bad enough that union leaders extract members’ wages for partisan campaigning. By raising the cost of federal construction projects to reward Big Labor, the Obama Administration now seeks to make every taxpayer a source of political donations via union middlemen.
Fortunately, Mr. Elmer promised that “we will exhaust every opportunity to challenge this policy, which is effectively a federal government endorsement of union set-asides.” If Barack Obama isn’t going to look out for American taxpayers during April 15 tax week, at least somebody else is going to try.
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