Davis-Bacon and the minimum wage
I haven't yet heard anyone say what I'm about to say in this post. But it needs to be said that suspension of the Davis-Bacon Act is necessary to rebuild those areas hit by Katrina that aren't urgent at the same time as the rebuilding of the areas that are urgent.
For those of you who don't know, the Davis-Bacon Act requires contractors rebuilding after a natural disaster to pay the "prevailing wage in the region" or higher to all those involved in rebuilding. Well, Bush suspended the law in Katrina-affected areas, and leftists threw a tantrum. "You're going to allow greedy corporations to chisel their employees!" they cried. Well, it turns out that the free market is attracting construction workers to needed tasks with a higher wage than was necessary under the silly law.
So what was the point in suspending it if it wasn't going to make a difference anyway? Well, it still could have made a difference - by keeping contractors from doing jobs that aren't worth $9 an hour. They can hire the less skilled, less productive people to do the less urgent, less important tasks for $8, $7, or (gasp!) even $6 an hour, if anyone unable to attract a higher wage is wont to accept it. Under Davis-Bacon, they wouldn't have a job at all, making them and the rebuilding effort both worse off. As the estimable Walter E. Williams demonstrates in the article of his I directed my readers to in an earlier post, it is the poor, young, unskilled workers who suffer from minimum wage laws (and Davis-Bacon is a minimum wage law). That's because they can't do the jobs that employers are willing to pay minimum wage or higher for, and employers are thus going to hire better-educated, more productive people who are worthy of the wage anyway. Instead of hiring someone they would have hired below the minimum wage, they may pay some highly productive over-educated bachelor gobs of money to work overtime. Or the work, as already noted, might not get done at all.
Thomas Sowell and Walter E. Williams, both brilliant economists, have proved that minimum wage laws effectively punish the poorest members of society, and help to maintain any existing racism in hiring. Also, if I may depart from the Katrina/Davis-Bacon issue a moment, high school students, dropouts, and even middle school students who are priced out of work by minimum wage could work after school (or in the case of dropouts, all day) doing light work worth $3 or $4, if they wanted to, if there were no minimum wage laws. This would help them build job experience, increase their personal wealth, keep them away from crime, and increase the overall standard of living in society by increasing the number of productive (wealth-creating) people. Sure, their prospects might not seem pleasant, and many of them may not choose to avail themselves of these new options. But at least they'd have the freedom to work.
SRS
For those of you who don't know, the Davis-Bacon Act requires contractors rebuilding after a natural disaster to pay the "prevailing wage in the region" or higher to all those involved in rebuilding. Well, Bush suspended the law in Katrina-affected areas, and leftists threw a tantrum. "You're going to allow greedy corporations to chisel their employees!" they cried. Well, it turns out that the free market is attracting construction workers to needed tasks with a higher wage than was necessary under the silly law.
So what was the point in suspending it if it wasn't going to make a difference anyway? Well, it still could have made a difference - by keeping contractors from doing jobs that aren't worth $9 an hour. They can hire the less skilled, less productive people to do the less urgent, less important tasks for $8, $7, or (gasp!) even $6 an hour, if anyone unable to attract a higher wage is wont to accept it. Under Davis-Bacon, they wouldn't have a job at all, making them and the rebuilding effort both worse off. As the estimable Walter E. Williams demonstrates in the article of his I directed my readers to in an earlier post, it is the poor, young, unskilled workers who suffer from minimum wage laws (and Davis-Bacon is a minimum wage law). That's because they can't do the jobs that employers are willing to pay minimum wage or higher for, and employers are thus going to hire better-educated, more productive people who are worthy of the wage anyway. Instead of hiring someone they would have hired below the minimum wage, they may pay some highly productive over-educated bachelor gobs of money to work overtime. Or the work, as already noted, might not get done at all.
Thomas Sowell and Walter E. Williams, both brilliant economists, have proved that minimum wage laws effectively punish the poorest members of society, and help to maintain any existing racism in hiring. Also, if I may depart from the Katrina/Davis-Bacon issue a moment, high school students, dropouts, and even middle school students who are priced out of work by minimum wage could work after school (or in the case of dropouts, all day) doing light work worth $3 or $4, if they wanted to, if there were no minimum wage laws. This would help them build job experience, increase their personal wealth, keep them away from crime, and increase the overall standard of living in society by increasing the number of productive (wealth-creating) people. Sure, their prospects might not seem pleasant, and many of them may not choose to avail themselves of these new options. But at least they'd have the freedom to work.
SRS
posted by weblogbob83 at 5:34 PM
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