Labor Law Guy

Coming Soon to a Stimulus Project Near You: Endless Waste

Posted in Federal Labor Law, State Labor Law by laborlawguy on March 16, 2009

If you thought that four years late and $350 million over budget for the largely unneeded U.S. Capitol Visitor Center was bad, wait till you see what the projects flowing from the recent $787 billion stimulus package will cost.

The 1931 David-Bacon Act (which obviously did nothing to shorten or alleviate the Great Depression) provides that contractors for government construction projects pay a “prevailing wage” to all employees. The prevailing wage–natch–is set by the government itself, and with the Obama people running things, only Karl Marx himself knows how high that can go.

Davis-Bacon was enshrined and expanded to cover virtually everything in the recent stimulus package, so the sewer next to you might end up costing 300 percent of what it would normally cost on the open market.

Wait, it gets better. Not only is Davis-Bacon being married to stimulus projects, but Obama has issued an executive order requiring project labor agreements (PLAs)  for major construction projects, currently those costing $25 million or more, but surely and shortly to be lowered by Labor Secretary Hilda Solis, who has authority over such matters.

PLAs require contractors to accede to all union demands regarding work rules, working conditions, pay, hiring (which must be done in union hiring halls), and union dues (which must be paid even by non-union members). A PLA was and is  in place for the infamous Big Dig in Boston, which the Boston Globe projects will cost at least $22 billion, after being budgeted at $6 billion, and not be paid off until at least 2038.

Now, the irony here is that it’s Massachusetts’ Commonwealth Care medical program that the Obamaites are hoping to copy for the rest of us, and that plan makes the cost overruns of the Big Big pale in comparison.

Why does this seem like deja Great Depression all over again?

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