Flying under the radar amongst the Katrina hysterics is the fact that President Bush signed an executive order suspending the Davis-Bacon wage regulations on Federal contracts related to Hurricane Katrina recovery and rebuilding efforts.

Here is a link to the actual executive order.

Suspension of the guidelines, which have been in effect since FDR, is not unprecedented. However, such suspensions were usually for a specific period of time. This particular order does not have an expiration date.

Questions for Debate:
1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?

1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

The suspension of the wage guidlines for recovery efforts seems like it could be helpful if the government is going to foot the bill. Since they want the most out of the money going to rebuilding and everything else I think that this is one way to go about it. But I do think it is a bad idea to suspend the bill without an experation date. To this bill makes logical sense because the prevailing wage in an area is usually proportional to living expenses in that area. If you wanted to hire a plumber in Manhattan and want to pay him the same rate as a plumber in Coatsville, Indiana then there is no way s/he is going to be able to pay for living expenses. It seems to me that this law is really to protect federal workers who are hired out.

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?

Well, the government has to save money some way right? Why not screw over the blue collar workers? If the gov. cuts costs with repealing the Davis-Bacon rules then they can save millions by paying the absolute minimum for labor, no matter what the circumstances.

1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

Okay- only if we will suspend pay of the CEOs and allow no profit to the companies that help in the recovery effort, after all, fair is fair, and it would be helpful to the rebuiding, right? Why is it that in this country, it is okay to screw over the little guy, but <gasp> to even suggest that the guy at the top have to live by the same guidelines, it is like stealing?

There is no reason whatsoever for this- other than to make GWs friends (with contracts already in hand it seems) a whole lot richer.

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?

Once again- why doesn't this apply to the companies themselves- why is it they are allowed to make massive profits, making lots of money off of others money, but shouldn't have to live by basic fed guidelines- poor widdle Cheney just can't rake it in fast enough? This kind of stuff is what really outrages me more than any other thing and why I despise this current republican leadership and GW so much- they are going to be throwing out billions to thier buddies- but begrudge the little guy his nine bucks an hour. What incredible evil scumbags these guys are. There will be no savings in the rebuilding- they just pocket that money for themselves instead. How lame.

Okay- I am all for it for savings for tax payers- if, we hold all bidding contracts to only 10% profit margin, and no employee can make more than 2 times the wage of the lowest paid employee in the company- after all, same reasoning applies, right?

The rebuilding money goes to mre than just rebuilding homes- it rebuilds the economy while lots of folks are out of work due to the damage- if anything, it should be a tad bit higher, with a little bit of purposeful inflationary wages, to build back up the area, start a small artificle boom. THAT would do more good than this- oh, that, and hold all CEO pay to 18 bucks an hour LOL

This article makes a very compelling case for Bush to take this action. It makes sense and contrary to popular belief it will benefit the people in the effected areas.

1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?
I'm looking at my pocket-size Constitution and can't find in the list of enumerated powers of Congress where they have the right to regulate wages, federal contracts or otherwise. Seems that this kind of regulation would raise the cost of federal projects. Let's say you're building a house - would you want your builder to require high wages, making your home more expensive, or should they seek the best workers they can find for a fair price?

Seems that the prevailing wage will be the, um, prevailing wage. If there is a scarcity of carpenters on the Gulf Coast, wages will go up, and smart carpenters will go there and make good money rebuilding. Let's call this "capitalism" and see how it works.

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?

As for the pork in the highway bill, wouldn't it be refreshing if Congress took $20 or $30 Billion of the pork they just passed and said "let's not" and re-directed it to hurricane relief. Maybe just the proposed $2 billion Knik Arm Bridge for starters. Our big government is so fat and bloated, and yet we are still surprised it takes them 72 hours to do anything.

Your experiment would likely be successfull, CW, were it not for a few mitigating factors. First, you now have a glut of cheap labor available in Louisiana due to thousands of people losing their jobs. Combine this glut with profit motive and the normal reliance of developers on extremely cheap labor and you have artificially low wages for people that are very likely trying to rebuild their lives from a horrific disaster.

My source for this escapes me at the moment (will add it in if I find it), but the prevailing wage that would have been in effect had the XO not been issued is a whopping $9 an hour. That is hardly what I would consider to be price gouging.

Also, how exactly can the government honestly claim a concern on cost controls when they are awarding no-bid, cost-plus (ie, guaranteed profit) contracts out of the 62 billion already awarded by Congress? In fairness, Congress does seem to have an eye on this but such awards have already begun to the tune 1+ billion dollars. (source)




I like both of these suggestions, CW. Too bad common sense is anything but common in Washington.


I see. So the "moral" decision is that instead of paying one person a wage they can possibly live on, we can now pay two people half that wage and claim the moral high ground? That whole editorial from the Heritage Foundation was nothing but a "Bush really thwarted the labor unions on this one, woo hoo!" piece. Labor unions is *not* what this discussion is about. I really don't see workers looking at an opportunity to exploit Federal contract labor rates, do you?

This is the same line of argumentation that is used in the immigration debates, and its the exact area where capitalism has a black eye. Saturation of the labor pool (esp for low skill labor) forces wages artificially low and makes it impossible for anyone to recover. Davis-Bacon would have protected this to some degree and made it possible for some of the people of the gulf coast to take part in the rebuilding of their communities and rebuild their lives in doing so. If they do this with artificially depressed wages due to profiteering by the no-bid contract owning companies, how exactly can that happen?

Doc

Yes, I see absolutely no outrage whatsoever on the no cost, no competitive bid, management salaries, and all the other things that cost far more than a 9 buck an hour worker-

and CW- lay off our bridge, we need that thing, you don't even know how bad we need that thing LOL- now, the Ketchican bridge to nowwhere- that one you can have LOL

I wouldn't really use this as a reason to support Bush's decision. Basically, the case being made here is racially-motivated. "Davis-Bacon forced federal government contractors to use caucasian workers because African-American workers were required to receive prevailing wages." That, in essence, is what the Heritage Foundation was advocating in that article.

Pardon me if I find offense in that concept--why shouldn't African-Americans receive equal pay to anyone else? How is "We can use African-Americans because they work for less" any less reprehensible than Wal-Mart hiring illegal immigrants because they'll work for less?

Representative George Miller [D, California] said this:



In this case, the suspension of the "prevailing wage" clause simply opens the possibility that federal contracts will be slightly less expensive. Wages are still set by the marketplace.

The entire premise of Davis-Bacon is absurd. Every job in America pays the prevailing wage. All this statute does is prop up overpaid unions. I don't know how contractors are suddenly going to pay their workers less. I've never seen a situation where an employer cuts wages across the board.

Davis-Bacon hurts the lowest paid workers the most. Here is an article from the Heritage Foundation that is over 15 years old:



We have to decide of priorities here: do we try to rebuild New Orleans as quickly and as efficiently and as cheaply as possible or do we want to make sure the people there make more than they otherwise would? Do we want to hand out federal contracts to those that are the lowest bidders, or do we want to pad the contracts by making sure that every floor sweeper makes as much as a union floor sweeper?

1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

I confess that I can't even attempt to answer this one. American labour laws are a mystery to me, especially when unions come into things. Mostly this isn't because I don't undertand a specific law, but because the underlying ethos is just very alien to me. Red tape to protect workers is utterly anathema, because they can always go work somewhere else. But red tape to protect the consumer or the stockholder (who can go elsewhere REALLY easily with little or no upheval in most markets) is perfectly OK.

I just don't get that emphasis.

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)

Yes, this seems very inconsistent, even trying to apply the government's own (as I say, quite alien to me) logic.

And I must say I'm with CruisingRam. Why is it okay to tweak the law to allow the restructuring and rebuilding to take place at the lowest possible labour costs, but then give the contracts out on a cost-plus basis that guarantees the businesses involved a bigger profit than they would otherwise get? Especially since many more of these businesses are based outside LA so the so-called "trickle-down" benefits couldn't help the region (even if they weren't mythical).

In effect, why is it okay to subsidise businesses to do business, but not okay to subsidise workers to work (by paying them more than they would otherwise get)? It seems that the authorities would rather subsidise workers not to work, which is effectively what they'll be doing by paying the ones who might afford to work if the protection remained in place with the welfare cheques that they'll get instead.

I think we have hit on one of the real chasms in the conservative-liberal philosophical divide here. These are things that rile liberals up pretty good. Yet a conservative will see hypocrisy or contradiction in the doting on high wages thing.

These contracts are going out on the basis of what? Who gets these contracts? How do they get them?

I am a firm believer in the concept of prevailing wage. When the government acts it takes all of its baggage with it. One of these pieces of baggage is that government contracts should make sure that labor hours are going to benefit the laborer.

I think this is a very important consideration whether it be contracts used in Iraq or in New Orleans. This reconstruction should also help shore up the local economy. At times like these people will work for anything. I believe that there should be protections to make sure that they don't.

We already have enough downward pressure on labor wages in this country. Katrina shouldn't add to it.

Us liberals tend to be quite cynical about the ability of the those receiving the contracts in these situations to either blatantly or stealthily profiteer.

I only see such a provision hurting the lowest paid worker in the sense that someone who would have worked for $2 an hour is being passed over for someone who will work for $9 an hour. Like in the days of the depression when this provision was created, there is a need to get help into the area of Louisiana in the form of paychecks for those in the area. The contractors often will be based from out of the area, much of the labor force will need to be local.

This is a little to rambly, to conclude, I think waiving the prevailing wage is impolitic and bad policy. One of the things that disturbs me most about the Bush administration (although I believe these actions are done with a feeling that they are on a better path economically and that existing ways are wrong for the country) is that it is situation like these that labor protections are attacked. In the aftermath of 9-11 it was undoing the benefits and wage system of government workers moved into the Department of Homeland Security, and here it is to save contractors labor cost by allowing them to use labor without using the prevailing wage. I simply don;t think the federal government should be using Walmart's hiring and wage policies. It is what I believe, many of you honestly disagree with me.

Nice understatement there, Amlord. Only problem is you completely dismissed the fact that a) the labor market in the gulf coast will be flooded with available workers, thus depressing wages and b) without Davis-Bacon guidelines, contractors can pay a pittance and still get workers pounding their doors. But I guess we should just let market forces be in a disaster area, eh?


Under normal circumstances, I could see a case for your point about propping up labor unions, but in the wake of Katrina this line of reasoning is absurd. The AFL-CIO to my knowledge hasn't setup shop at the Superdome negotiating contract labor. There is a good chance that the lions share of contracts will be non-union. Especially, when we're talking a whopping $9 an hour as the prevailing wage. Or do you honestly believe that minimum wage is actually a livable wage?


Interesting article, and perhaps a decent indictment of Davis-Bacon guidelines when it comes to minority hiring and contracts. However, even if I placate the assumption that normal conditions invalidate the usefulness of Davis-Bacon (I don't), how does it apply here? You were able to quickly identify the prevailing wage in NOLA, why can't that be used by the department of labor?


Again, you're overplaying the union card here, Amlord. If you can find something telling me Unions or union wages would have been at play in this circumstance, maybe you have something. Otherwise this measure wreaks of the very philosophical differences Eeyore spoke of.

Doc

Here is a link to the Orleans county "prevailing wages" as determined by the US Department of Labor for commercial work.

Here is the link for residential work.

I have another link for highway work.

There are 3 links for Heavy Industrial work.

This is all for one county is Louisiana. Go outside that county, and you have a different set of rates.

The lowest rate for commercial work is $9.32 for mason tenders. Mason tenders are the guys who haul around the stuff needed at a construction site. The only skill required is a strong back, basically.

I don't want to dwell on the wage part, however.

What I wanted to say is that for unionized companies, conforming to these guidelines is not a problem, since their job descriptions are already set up along these lines. It is easy for them to prove, for instance, that they pay their Mason Tenders at least $9.32 an hour.

Now, move to a small, non-unionized firm. They may have more general laborers who do both electrician work and pipefitting. Do they pay these guys at least $22.09 base pay and at least $6.00 fringe benefits (as an electrician) or do they pay at least $21.55 an hour base plus $5.70 fringes? Can they easily prove (before getting a contract) that they meet the requirements? What if they move to a different parish with a higher wage schedule?

Clearing up this nonsense is simply a way to streamline the process. It is not, as some would suggest, a cover for "Screwing the little guy"™. It is a way to get smaller companies, non-union, and minority owned companies a piece of this business.

I am really surprised at some people defending Davis-Bacon. It is a throwback piece of legislation with a racist origin. It keeps minorities and non-union shops out of government contracts. It is a barrier to entry for the little guy. It was challenged in court in 1993 by minority business owners as being un-Constitutional. link

Davis-Bacon sets an unreasonably high rate of pay on jobs for these contracts. It freezes out unskilled (often minority) workers from doing jobs that they should be able to do. In the process, it robs them of the on the job experience they could acquire to obtain better skills (and pay).

For example, after the Rodney King riots in LA, unemployment in the areas affected by the riots for minorities was at 27.6%, despite the availability of laborers. Local firms simply could not pay that wage level and remain competitive.

After Hurricane Andrew, President Bush (41) suspended Davis-Bacon, which resulted in the creation of between 5,000 and 11,000 jobs locally.

When you force firms to pay inflated wages, they are going to hire people they know have the skills required. They cannot hire unskilled labor and use them (or train them) for skilled positions. In other words, people cannot even help to rebuild their own homes unless they are paid an inflated rate.

The drawbacks that Davis-Bacon have had over the years keep minorities down and keep unskilled laborers unskilled. Fixing wage prices has never worked.

Why are local Congresspersons praising the suspension of Davis-Bacon? Are they committing political suicide?

Administration Grants Norwood Request for Temporary Suspension of Davis-Bacon Act Restrictions on Rebuilding After Katrina


The rhetoric surrounding this makes it sound like Bush is doing something no other President would dare. An AFL-CIO spokesman said this is a "shameful government-sponsored wage race to the bottom for workers". Others have called it government looting of workers wages. Presidents Franklin Roosevelt (during New Deal projects ), Nixon (to ease inflation), and George HW Bush (Hurricane Andrew) have all suspended Davis-Bacon. It is nauseating to hear that some people think that the people who were left behind with no transportation are being hurt by this. If anything, they are being helped. I highly doubt that there are many construction workers (skilled tradesmen) who had no car and were left behind because of it.

These people have an opportunity now to get a job (at a lower wage, probably) and build up a skill set so they can improve their lot in life. Starting mason tenders at $9.32 means that only experienced (and reliable) workers will be employed. Newly unemployed or long-time job seekers need not apply.

Amlord, that was a thoughtful and extremely well-researched post.

After reading through your links I go back to my original statement about this being an ideological divide.

I think $22 hr for a licensed electrician is a fair rate. I think the areas hit by these storms could use good jobs to fill in these positions. And I think it is at times like this that people with the skills needed who likely did have a truck and the means to get out of town, will need to be drawn back to town by good reliable work.

I still disagree with the suspension of this rule, regardless of the racist tones of the people who wrote the law.

The type of red tape being cut in this situation would be the type that would expedite a good bidding system and getting contracts authorized that follow the rules of good governance as quickly as possible. I know this is asking a lot of government, but we give a lot.

I have to admit, Amlord, you sold me. Davis-Bacon probably is a bad prevailing policy for Federal contracts.

I would even cross the philosophical divide and agree even in this case that waiving Davis-Bacon is a good thing, if the bidding system had (or gains) some fairness to it. I'm willing to accept it as a condition as there does seem to be some momentum to be had in Congress monitoring the contract system related to Katrina efforts. Some of the early contracts seem to wreak of the good ole boy system, especially the cost-plus guarantees. Now, if some of those contracts go to smaller, and minority firms in some instances maybe we'll have some success in avoiding the scenario I described earlier where you have the likes of large monolithic developers paying immigrant wages (ie. below minimum wage and often off the books) because you have thousands knocking on the door to become mason tenders.

Bear in mind I don't want the focus here to shift to the bidding process because that would obviously be off topic. But as this topic has evolved it seems like the two are pretty closely related. In order for the workers to be protected from wage exploitation you have to have some ability for federal contract recipients to be monitored and punished when necessary. I think you'll agree, there has been little success in doing that when it comes to our contractors in Iraq under the same guidelines.

Doc

I'm confused how you can admit that Davis-Bacon is bad policy, but you need further convincing that lifting it in this instance requires further proof.

There are probably 100,000 potential workers who have been displaced in New Orleans. Certainly people who worked at Wal Mart, Target, and other businesses which will not re-open soon have no jobs. The previously jobless still have no jobs.

Davis-Bacon rules prevent entrepreneurial companies from offering these people work in the reconstruction of their own city.

It boggles my mind that we expect individual workers to be simply prey for big companies. I know that when I am looking for a job, I have an expectation of salary. If a company doesn't offer that level of compensation, my answer would be "thanks but no thanks".

Before you accuse me of being some out of touch uppity Republican (something you would never mistake me for if you knew me personally), let me assure you that I believe it is the same for every profession. I doubt highly that companies will find many candidates for electricians (for example) at $10 an hour when the prevailing wage was over $26 an hour before Katrina. Especially when the government is subsidizing the living expenses of many of these people.

My objection to Davis-Bacon is that is robs opportunity from those who are less experienced. It robs them of the chance to gain skills by actually doing some of this work. No one is going to pay an inexperienced electrician $26 an hour. They will hire a proven commodity. Smaller firms cannot underbid larger (unionized) firms since they must pay the same wages and increase their overhead to accommodate filling out the necessary paperwork associated with government contracts, specifically as related to Davis-Bacon.

I totally agree with you on this. It's a shame that most people can't or won't acknowledge the basic laws of economics on this. It's not only Davis-Bacon, it's the very idea of "prevailing wage" or even "living wage." All artificial means to prop up wages have the same result - less entry-level, low skill jobs are available for unskilled workers to fill.

This was never more obvious than here in Las Vegas, where the union was paying (unskilled) picketers $6 per hour with no benefits to stand in the hot sun and protest Wal Mart. Of course, the workers at Wal-Mart average $10 per hour, have affordable benefits, and work in air conditioning.

A better approach to creating more local jobs in the Katrina rebuilding would be to require proof of citizenship for every construction worker. Even if we give them 60 or 90 days to scare up replacement paperwork, I'd do that and deport every illegal worker retro-actively, to ensure that illegal immigrants aren't taking American jobs in the rebuilding. Illegal immigration does more to depress construction jobs than anything else in this country.

What this will do is allow for some of the displaced people to find work in the restoration projects that they wouldn't otherwise have. Many of these would be jobs that either these workers would not have skills or experience in, or which could be done differently using higher wage earners (ie...a bulldozer and operator vs. 10 guys with shovels). This has nothing to do with race...people of any ethnicity could easily find themselves in this situation. Further, consider the simple fact that, given a choice between paying a skilled, experienced worker a certain wage, or paying that same wage to an unskilled, inexperienced worker that same wage simply because they happen to have lived in that area...which one would most companies choose? The fact is that those displaced would be excluded from most of the restoration effort with this legislation in place....removing it creates an opportunity to employ those workers, and also therefore will provide an incentive for them to return to New Orleans, making the restoration more justifiable (why rebuild for people who aren't there?). What is the problem with that?

For those who are convinced cronyism and corporate favors are the motive...time will tell. I would like to hear from this camp what their plan is to get those people displaced in NOLA and other areas to want to come back, and also what they would be doing for work if they did, considering that most of them would not be qualified for the restoration work at prevailing wages.

That's why I bundled my position change on the bidding process, Amlord. Placed in a vacuum, I agree with you that Davis-Bacon is bad policy. But when you combine that bad policy with no-bid, cost-plus contracts that automatically shut out the entrepaneurs you seek to engage, both sides lose. The workers lose because the monolithic corporations can bottom line wages and the small business lose because they never had a shot at the business to begin with.


Again, assuming normal market conditions this would be a typical example. Market conditions are far from normal on the gulf coast. As you've pointed out there are gonna be a ton of people out of jobs looking for low or no skill work.

Now, where we seem to disagree is whether forcing companies with Federal contracts to provide a minimum wage of $9/hour would prevent most of those workers from getting jobs. My answer is no, because they companies have to have the labor regardless. What Davis-Bacon in this context prevents (and not a single one of you has refuted thus far) is a developer from staring one of these future mason tenders in the eye and saying "I know you want a job, and you'd like it at $9/hour, but I see 2,000 people in line behind you who will do it for $4.50." Some of you call that economics, I call that exploitation. Take the "no-bid" off the contract process and get some companies with vested interests in the people of the area, and I'll have a lot more faith in corporate responsibility to provide a fair wage without Davis-Bacon in effect.


Assuming they are given a chance to bid in the first place, I would agree with this analysis.


Ok, I'll give you the air conditioning, but there are more than a few lawsuits on file that would disagree about the wages and especially the benefits. Walmart has a horrible track record in this area.


I couldn't agree with you more, CW. But that would require that we actually deport illegal aliens in this country, and that seems to be the exception of our immigration policy today, rather than the rule.

It seems like we're all in agreement that we'd like to get as many folks on the gulf coast that were unemployed by Katrina back on their feet and working. Where we seem to disagree is whether the government should provide some short term wage supports to ensure that folks can actually do this. I agree that in a long-term, non-disaster context, Davis-Bacon may fail to meet those goals. But given that economic conditions are far from optimal in the gulf coast region, especially in NOLA, a short term intervention might provide the greatest good.

So Davis -Bacon wages are bad or unfair or whatever- my answer is "so what?"- why is it, and no single person that supports this has answered this- why do we only deal with one side of the equation- why is it we only suspend what is good for the little guy- but no such thing for say, Kellog root brown- you know, suspend CEO salaries, no bid contracts, etc etc. At no point has one conservative here suggested maybe that any REAL savings and economic help is NOT going to be by suspending davis bacon wages- but by the excesses of folks like the Cheney group?

Won't even address it I bet- because while suspending decent wages for the folks rebuilding is okay- to even suggest that somehow rich poeple live by the same standards of capitalism seems to be taboo.

OK, I'll bite....please let me know how many displaced Kellog Root Brown CEO's there are who are currently going to be looking for work as general contractors in the NOLA area? Hmmmm...zero, maybe? Sooo, what you are proposing wouldn't accomplish anything towards helping displaced workers relocate back to NOLA, which I believe is the goal of this move. That is why it isn't being discussed here, because it simply isn't relevant.

You know, there is a simple cure for excessive executive salaries. Next time you're offered such a position, simply turn it down. In keeping with good libertarian philosophy, let others then make that same decision on their own, as well. Problem solved, no need for further discussion. LOL !

My argument is that Davis-Bacon hurts the little guy. It is a barrier to entry into the construction market. It hurts little employers and it certainly hopes those that do not have the skill set.

CEO pay is a private issue. What's that got to do with government contracts? Do you really want the government to mandate that some people (in this case, CEOs) work for free?

Who, exactly, is the Cheney group anyway? Some boogyman invented as scapegoat.

Do you really expect companies to do things without profits? I know you know how capitalism works and it isn't by doing something for nothing.

My objections to Davis-Bacon (the topic of this thread) are that it hurts the little guy and helps the entrenched union worker. It is a barrier to entry into the employment marketplace, which is always bad in a capitalist system. I'd agree with you that in many cases no-bid contracts are also a barrier to entry. In certain situations (especially where speed or specialized knowledge is important) they might be beneficial.

So you only want capitalism to apply to the lowest rung- we don't want no capitalism for CEOs- who set the rules for thier own salary- if the all the reasons you listed were truly for the little guy and the rebuilding effort- we would suspend all no bid contracts, and allow no outside contractors, or even better yet, no contractors that are publically traded, and only corporations with 500 employees or less- you know, so the small contractor to compete-

but what you have here, is only applying capitialism to one segment- and letting the other segment have basically a goverment entitlement- but only to the top 1%

Amlord and Hobbes- you seem to suppose that somehow those top salaries that will be paid are actually private- when, like senators, there is no capitalist check and balance here, they set the rules for thier salary, then are able to lobby in order to make sure no one competes with them-

The cheney group refers to any affiliation with Haliburton or Kellog Root brown BTW- the GW money spigot if you wish

I am all for capitalism- as long as everyone has to live by it- not just those making less than 9 bucks an hour.

If it helps to get a handle on this- you have a type of socialism here- corporatism really- that gives benefits to corporations, but takes them away from the worker- if all things were equal, and we had some kind of real market force driving it- I would be fine with the suspension, but that CLEARLY is not the case- we are only applying this to one group of poeple, the most vunerable- while, once again, we give a "pass" to the Rich Republican (capital letters here) - because, let's face it, he who gets the fat contract, gaveth the mosteth to his lord the republican party.

Absolutely. Yes, we should employ the full bid process, to delay the rebuilding effort the longest possible time. Also, we should only work with small companies, since those are the very ones least likely to have the skills, experience, and resources necessary to accomplish such a massive rebuilding project. As a bonus, they also have no resources to compensate for their failures when they occur. Eliminating public contractors is also a fantastic idea, since those are the only ones who have to publicly disclose their finances and investors...this should be the perfect front for the other side of the Cheney group.



How is restricting salaries, especially those not even directly related to the rebuilding effort, employing capitalism?



How do they set the rules for their salary? That is decided before they ever take the job, giving the corporation the full ability to simply say 'No thanks'. Ditto for competition...if there is someone else out there who can run the company better for less, the company is certainly open to replace them.



Interesting name choice then, since Cheney has no affiliation with Haliburton or KBR, as I'm sure you're well aware. Consider that as someone who lives in Alaska, and therefore directly reaps the benefits of the oil industry, you yourself have a stronger affiliation with Haliburton than he would....do you attend the Cheney group meetings?



Apparently what you are against then (aside from the rant against executive salaries) is making it possible for the rebuilding effort to incorporate the unskilled labor pool that many of the evacuees would find themselves part of in the rebuilding effort...thereby making the entire rebuilding questionable since many of those who lived there would have no reason to return. I guess, then, that KBR wouldn't need to participate in the rebuilding process, thereby preventing them from earning profits?

ABSOLUTELY BAR HALIBURTON AND KRB from the bidding proccess, in fact, we SHOULD start investigating them under the Rico act instead of actually using them again- haven't you heard about the <ahem> "accounting failures" in other areas where they are working for the goverment (it is an accounting failure if you are rich, theft if you are poor)

So it is a delay if we make the corporation live by the same set of ideals as we do the worker? Amazing myopy here- free bidding proccess, accountability and capitalism only works if it is applied to the common laborer, not the CEO-

and to even suggest that the "free market" comes into play for CEO salaries shows an amazing lack of knowledge of the proccess on how to earn those salaries- the CEO stacks the compensation board with cronies, they all gauruntee each other golden parachutes and exorbant salaries, by first gathering proxies of voting stock by essentially gaurunteeing the same for large stock holders- corporations are not a component of free enterprise for some time- and to suggest otherwise is just plain silly. It simply has no basis in the reality of how business is done at that level.

Who do you think is getting these contracts? Do you seriously think that the best able to do the job is going to get them, or do you think the best connected is going to get them?

If the best corp for the job were getting these contracts, I would agree, let the market prevail- but that is simply not the reality.

Barring the most capable organization in the world from the rebuilding effort isn't going to help. Investigating, and punishing, them for past or future issues I have no issue with.



No, it is a delay if we employ the usual government bidding process, which, at a minimum requires a 60 day posting period before responses can even begin to be evaluated. That has nothing to do with any ideals whatsoever...it is a fact of governmental policy and processes. With the normal bidding process, it would take at least an additional 6 months to get work started...I'm not sure how that helps the problem. Perhaps this myopia is contagious? LOL

As for implementing capitalism....that is the goal of removing this restriction...allowing the free market to operate for the common laborer. Davis-Bacon Wage Rules restrict the free market (by definition), suspending them enacts it.



Off topic, but deserves a reply. Of course the free market comes into play for CEO salaries. Even if everything you describe above were true, that is just the free market in action, with a huge dose of networking applied (nothing about capitalism conflicts with connections...that is just playing the game more effectively). I don't particularly like it either...but that doesn't mean its not capitalism. Companies could only do these things if they improved their competetive advantage...otherwise that company would cease to exist, paying no one any salaries. That aside...how does a CEO who hasn't even been hired yet stack the board, guarentee anybody anything, or gather any proxies? Compensation is dictated at time of hire, when the CEO has no power to do a darn thing, he's just a schmuck looking for a j o b...just one who happens to have highly desired skills/experience, and probably good connections.



How does restricting executive compensation effect this issue? It doesn't. I don't disagree with you on the problem (other than that this problem has nothing to do with the one relating to the suspension of Davis-Bacon Wage Rules). I think executives are frequently overpaid. However, I have to wonder...how many of us turn down more money, or would consciously decide not to use the system to provide job security if you could? I also think that those who rail against executive compensation fail to appreciate the fact that executive success often means success for literally hundreds of thousands of workers, and millions of stockholders. I wonder how many of them would prefer to have a low-paid, but ineffective, executive team...costing them their jobs and their retirement? Certainly, restricting the rebuilding process to those companies who have the least demonstrated ability to do the job isn't going to help any.

Yes, but how many of us get to determine our own salary, wages and other compensation as well? We don't get to walk on to the job and say "okay, I will take this much, and if you fire me, I get my salary for the next five years as well"-

Executive pay rarely has anything to do with actual performance at all- it is all about crony-ism- you sit on the compensation board now- but if you want a shot at the big chairs, the actual board, you better play ball!

There is a list of executives, fired for basically incompetancy, that make millions per year for years on end after leaving the company- not exactly free market principles IMHO

to boil it down to why I don't favor the suspension of davis bacon wages IN THIS CASE (otherwise, in a true free economy, with open bidding, and true competition, I am against Davis Bacon wages- let me make that distinction very clear IN A TRUE FREE MARKET ECONOMY, WERE THERE IS FREE AND OPEN COMPETITION FOR EVERY JOB, EVERY MARKET, I AM AGAINST DAVIS BACON- hope that comes out loud and clear )

There is no free market here- the contracts have been awarded- NOT on the basis of who is best to get the job done, NOT on competitive bidding, NOT on free market principles- but by who you have paid off in Goverment- and, to top it off, the biggest is going to a company that has shows time and time again it is completely and absolutely corrupt.

If I were allowed to bid on say, residential rebuilding of New Orleans- with building season almost over here in Alaska- I could have 5 thousand workers down there in a month, if I were even allowed to bid on the process (in reality, I could not do this, because there are guys here with major construction companies that could do it better- I should have said "there are poeple that could have...) and those would be just the foremen, and specialty skilled folks- like HAZMAT removal types- the rest could be hired locally- but, quite frankly, they are not allowed to bid, or even participate in the process- they have to go through KRB, and attempt to subcontract through them.

You keep ASSUMING that this company, and Haliburton, are somehow the best to do these jobs- but we will never know will we? NO ONE ELSE IS ALLOWED TO ATTEMPT IT-

so, my argument boils down to two areas:

1) If you are going to demand free market principles be applied to one group, apply them to the whole group.

2) If you are not going to apply free market principles to one group, don't apply them to any group.

Actually, we all have the ability to demand that....just the response we get would be different due to perceived value in the marketplace.


Actually, it usually does. The problem is that the performance it is linked to isn't always related to long-term performance of the company. But, again, this isn't the fault of the CEO, it is the fault of the company for setting things up that way.



Again, I'm with you on the problem...it's the solution or the implications that I think we're at odds on. Why do these executives get this compensation? Usually because the company doesn't want to be tied up in litigation for years. That doesn't help anyone....workers and stockholders included. I don't like it, either...but this isn't the fault of the CEO, it's the fault of the company for setting things up that way, which is the free market in action.



I agree with you on the problem. However, opening up the bidding process introduces delays, which are also undesirable. Not sure what the best solution would be...if everyone were allowed to bid, there's no short way to work through the process to choose someone else, which delays the reconstruction.

Guys, I think we're getting off track here, and I'll admit some of my comments may have been conducive to it. The focus here is on Davis-Bacon and Federal wage guidelines as it relates to Katrina recovery efforts, not whether Halliburton, KBR and the like are good corporate citizens. Just as a reminder:

Questions for Debate:
1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?

Doc- these subjects are really one in the same- - because, if we suspend free market forces for one group, yet apply them to another- there is no check and balance in the system that is supposed to be free market-

we let wages fall to the area that the free market demands-

then there needs to be alternative employers- if we are limited to only one, goverment mandated employer, that is not the goverment, but a private entity working for the goverment- then the employee can't exercise his free market check and balance and go look for another employer to pay him better

i.e.- competition in the workplace

So, as long as there is no competition, there should be no suspension.

If an employee can't go looking for a competitive salary among the workplace, there is only one mandated employer, how are we to even know what that wage will be?

SOOOO-

1) Do you believe we should suspend wage guidelines for Federal contracts that are related to Katrina recovery efforts? Why or why not?

In this situation, absolutely not- in fact, we ought to go the other direction- we ought to demand open books for all goverment no bid contracts- with goverment mandated salary caps for non-direct line staff employees, profit caps etc- because the employer is a monopoly, a proven corrupt corporation many times over, and there is no competition for the free market to set wages.

2) Does it seem inconsistent on the part of our government to be worried about labor costs in the wake of one of the largest natural disasters in our nations history when they just passed into law some of the largest pork bills in history (ie. energy and highway bills)?


IT is not inconsistant, because the corporation that will be leading the build up is proven to be thouroughly corrupt, and has over and over again engaged in gouging and such of the goverment- the real focus should be on the company themselves, thier profit margin, and who, above the skilled laborer or "field" position is making- that is were all the attention should be, because that is were all the abuse is being done!

There are value decisions in here. The little guy is both the sub-$9/ hour worker and the small business owner. and a laborer who worked through the system to get into a union is entrenched.

I fail to see why the prevailing wage system will hurt the little guy. If he was not the best person available for the job, then how was he going to get it? If it simply for working for less than the person with experience and skill I don't see the value. this is like supporting scab labor as a way to end a strike.

We have revealed enough of the problems of the underpaid working poor in this country, We ned to raise the minimum wage and support that minimum wage with programs like the prevailing wage. A contractor in a bidding situation will then be on a level playing field and less likely to be able to win a contract because of underpaying labor. Can we expect high quality work under prevailing wage?

I see this more like Nascar in that the wage rules have restrictor plates and then the best team wins with what they can control.

These downward pressures on wages are IMHO among the most dangerous problems afflicting our country today. Enough of this pressure is legitimate international labor competition, there is no need to hasten the process by setting a war zone into a low bid labor area when people need wages more than ever.

If we really want to save money on projects like these we will improve our auditing procedures and make penalties real and binding for corporations that have been caught with their hands in the federal cookie jar.

Further undermining the pay scale of the labor market of the New Orleans region is not in the best interest of out country.

To be frank, I think the act ought to be either repealed or not enforced, so Yes, it ought to be suspended.
The act was the direct result of black laborers being brought to NY for a project during the depression era. It was, and is, patently racist. The labor organizations are no less corrupt than any Haliburton.




There are some merits for "no-bid" contracts. If one wanted to buy a million gallons of gas, you wouldn't go to your neighborhood 7-11 and say "fill it up". There are few contractors capable of filling the needs of some government contracts.
I certainly concede that spending is out of control, so to to dismiss cost-control in any endeavor would be counter-productive. I would like to see it broken up into bite-size pieces so that local small businesses could bid and execute these pieces. I think the biggest impediments to this are:
-a Who would manage it dutifully.
-b Given our tort system, if someone found 2 PPB of hydrocarbons on their property 50 years from now, they would be looking for deep pockets . Only large Corps can take the risk.

Yogs

Having suspended prevailing wage rules for construction work under the Davis-Bacon Act, the Bush administration now wants to suspend rules requiring decent wages for service workers:

Fort Wayne Journal-Gazette

Here is where the administration desire to subcontract everything in sight hoists them on their own petard. Since support services will probably get distinct contracts from obvious construction efforts, they are stuck with a lot of employment that demands prevailing wages under the Service Contract Act. But the Bush folks face a problem in suspending the Service Contract Act.

Davis-Bacon has a specific provision allowing the President to suspend it during a national emergency. The Service Contract Act does not, and labor experts say it's suspension may be unprecedented. Given that the government may be running a whole range of support services for reconstruction efforts, if service workers are getting prevailing wages and the construction workers are not, you can expect hell to pay by those construction workers.

But this administration will be in court faster than you can say "habeus corpus" if they suspend the Service Contract Act. Why? because this act covers all service people, not just construction services. Which means that restaurant and hotel personnel, landscaping services and a host of other typically relatively low paying jobs will be probably be affected. Do they really want a full-blown court case highlighting their attacks on decent wages in these industries?

Face it, folks. This isn't being done in the interest of saving the Feds some money on construction costs. And it isn't being done because they want to give otherwise unskilled labor a chance to learn a new trade while earning some money. This is Federal union-busting, plain and simple.

Don't think so? Consider the fact that, at least with his order revoking the Davis-Bacon Act, there has been no time limit placed on the revocation.


C'mon, Amlord, you and the others here that agree with the suspension of Davis-Bacon can't have it both ways, now.

Let's go back and look at the statements I've highlighted above, from your post, alright? I don't see how, under these circumstances that Davis-Bacon "hurts the little guy". Unless of course, by "little guy" you mean unqualified, unskilled labor. But, if that's the case, he's not going to get the job anyway.

Why? Well, let's say, for instance that you're the contractor, and you're looking to hire plumbers, or carpenters. Are you going to tell me that you'd hire someone with no experience in these trades, just because the labors cheap? Really? In a disaster the size of NO, you can't afford to take the time to train 2,000 new, inexperienced people for the job. But if you can bring in 2,000 plumbers or carpenters from around the country, and then pay them only $9 an hour, instead of the $14 and hour they'd get under Davis-Bacon, you get quite a bargain, there, don't you?

As for the no-bid contracts, they are indeed a barrier to entry, as the contractor holds all the cards. And in certain situations (especially where speed or specialized knowledge is important) your "little guy" isn't going to get any work from that no-bid contractor, either. After all, if speed and specialized knowledge are what's important, by definition, the unskilled laborer is not going to have that specialized knowledge, and even if you can teach it to him, he's not going to be very fast for at least a fair amount of time.

So, please. Let's not say that this is going to help the "little guy", when it's more than apparent that these rules are being suspended, specifically to help the big no-bid contractors save money, at the expense of the "little guy".

I think you have a distorted view of what I am saying, since you do hit my point and then discard it as irrelevant.

In any situation where skilled labor is needed, the employer has two choices: higher a high wage, already qualified worker or hire a lower wage worker and train him. In construction, this type of training is on-the-job training: basically being supervised by other, qualified workers. I think you have the wrong concept about training. It isn't three months in a classroom. It is a little more supervision to make sure the job is done correctly.

In the situation where you have to pay all workers the "prevailing wage" if they perform a certain job, then you cannot save costs by hiring the less skilled worker and training him. You might as well go with the higher quality and lower training costs of the already skilled worker. In short, you have nothing to gain by training someone else.

I think that your take on the New Orleans reconstruction is a bit off. On a project his massive, there simply will not be enough skilled workers to go around. Contractors will come in from around the country, and their workers will expect the wage they have always gotten. I know of no tradesman who gets paid based upon where he works; they get paid what their contract says (they may get bonuses for certain types of work, however). So if a plumber from Ohio gets offered a job to go to New Orleans to rebuild, he will probably get paid what he already made in Ohio. Do you really think he will leave Ohio for a time for less money? That doesn't make sense.

By suspending Davis-Bacon, contractors have the option of doing things for less cost by employing less skilled workers. These workers will then gain experience which will allow them to get better paying jobs in the future based upon those skills.

That is how the American dream works. A lawyer starts as a file clerk. A doctor starts as an intern. A bricklayer starts as a mason tender. Each of the first jobs allows the worker to gain skills that will help them make more money in the future. If the government mandates minimum pay requirements, than it is higher skilled workers that win. People without full credentials need not apply.

I was not inferring with my position that contractors are going to hire greenhorns and put them on complex electrical jobs. What I am saying is that they can hire under-skilled workers if they are allowed to pay them under-skilled wages. If they have to pay them all the same, there is nothing to be gained by hiring an underskilled worker.

Davis-Bacon is a bad law in every situation, including this one.

I'm not aware of that statement at all. In fact, according to this website, Cheney stands a lot to gain when leaves office because of his his half million unexcercised stock options. Here's the "non-affiliation" you subscribe to:


When he leaves office, he can cash in and there's nothing anybody could do about it. According to this site, he's certainly violated ethics laws and does have financial ties to the company.

Finally, you might want to let CBS know, because according to this, they're not aware either.

There are plenty of companies that are even licensed to do what Haliburton is doing and they can't even bid. On top of that, Haliburton gets to name it's price.

The cronyism in this administration is at record levels and this is no exception.