Friday, September 09, 2005

Anytime's a Good Time to Sock It to Workers

Via Kevin Drum, George Bush is playing politics again. This time he has suspended the Davis-Bacon Act in the Katrina damaged "areas of Alabama, Florida, Louisiana, and Mississippi, allowing federal contractors to pay less than the local 'prevailing wage' on construction projects."

What does this mean you ask? Federal Contractors can pay threadbare wages to those who rightly need a good job now to get back on their feet.

Rep. George Miller of California, senior Democrat on the House committee that oversees labor law, said the move would allow employers to pay "poverty wages" as they rebuild from the hurricane.

"The administration is using the devastation of Hurricane Katrina to cut the wages of people desperately trying to rebuild their lives," he said in a statement, noting the prevailing wage for construction in New Orleans was about $9 an hour. "At under $9 an hour, workers certainly won't be able to rebuild their livelihoods," he said.
Again Bush goes against economic history to either show how religiously attached he is to neo-liberal economics and its associated contempt for unions and labor laws or how committed he is to lining the pockets of the private firms that bid on government projects. If Bush or his economic advisors were to go back to their days of intro to economic theory or even look back towards FDR, he'd know that Keynesian economics is the best recipe for the areas destroyed by Katrina. At this time government through spending can "prime the pump" as economists say, so both contractors and workers can both make out well and create the aggregate demand needed to get these areas back to relative prosperity. If not, the businesses won't come back and these areas will become ghost-towns.

But as we now know, President Bush isn't an economist, he's a CEO -- an incompetent CEO but a CEO none the less, which means cut costs even if it creates the conditions of your own destruction.