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Sunday, September 25, 2011

So What If It Cost an Arm & a Leg

The federal government's paying for it.  So stop complaining.

Besides, there is another aspect to Obama's "stimulus" plan, one that's playing out here in Virginia, that you should find more galling.

From Senator Mark Obenshain (R-Harrisonburg):
An Obama Union Payoff in Virginia?

Call it the Obama administration's payback to organized labor - and we're paying for it. That is, Right-to-Work states are paying, like South Carolina -- and now Virginia.

We all know about the NLRB veto of Boeing's move to South Carolina. Now, the Department of Labor is using an old federal law to divert Virginia jobs to out-of-state union shops.

The Davis-Bacon Act is nothing new. Enacted in 1931, the law requires all workers on federal projects (really any project using $2,000 or more federal dollars - which now is virtually everything with the prevalence of stimulus dollars) to be paid the "prevailing wage" - which tends to be the local union wage, if not higher.

By aligning jobs with union pay scales, the policy eliminates the hard-won advantages of Virginia contractors, as 95% are not unionized. These jobs will go to out-of-state union shops - which can now compete because Virginia's contractors will actually be prohibited by federal law from paying lower wages (even if they reflect the local market). In effect, union pay scales become the federal minimum wage for certain jobs.

Just look at what's happening in the marketplace. Where I live, the Davis-Bacon minimum wage for an electrician soared by 235% -- up from $15.80 to $53 an hour - just this year! In the same period, the minimum federal hourly rate for pipefitters jumped from $27 to $45 and the new wage for sheet metal workers is now $48. When minimum pay rates jump to this level this fast (and without reason), it suddenly allows otherwise uncompetitive out of state union shops to compete with and take jobs away from Virginia contractors.

But how can this happen? Simple the Department of Labor bases the rate sheets on optional local wage surveys - surveys that tend to draw a disproportionate union response. Still worse, if the Department decides that the response "isn't large enough," it uses the rates from a "nearby" region: D.C., Baltimore, or Philadelphia.

Virginia's right to work law is working. Our unemployment rate is well under the national average and our industries are rebounding from the recession. But in the construction industry, one of the hardest-hit sectors, This costly federal requirement is holding us back in industries like construction, one of the hardest-hit sectors, by imposing job-killing union wages on us. This is a direct assault on our right to work laws.

It used to be that Davis-Bacon applied only to federal projects, but with passage of the stimulus bill it was extended to all projects funded in any way by the Federal Government."

We are literally forcing contractors to charge the government substantially more than any of their other customers. Davis Bacon drove up the construction cost of one nearby school by more than 25% and this is quickly becoming the norm.

This use of Davis Bacon is every bit as outrageous as the NLRB action against Boeing's move to South Carolina. If Virginia wants to challenge another example of federal overreach, this may be it.
Outrageous indeed. And par for the course.

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