On Aug.
29, Hurricane Katrina strikes, causing widespread destruction.
Four days later, President Bush commits $10.1 billion of the taxpayers'
money to rebuilding New Orleans. Four days after that, he suspends
the Davis-Bacon Act -- the law that requires federal contractors
to pay workers the going local rate.
Illegal
immigrants, willing to work at less-than-prevailing wages, stream
into New Orleans. And a mere six weeks after the last evacuee
leaves the Superdome, we hear of complaints by illegal workers
that employers are stiffing them of their meager pay.
So here
you have it, a lesson on how to crush the market for blue-collar
labor. And it could have been done in four PowerPoint slides.
In the Bush
view, market forces may do their magic for some Americans, but
not for others. They can operate freely when they raise the prices
for stocks, oil or real estate. But when they raise the price
for American labor, something must be done.
If you really
believe in market economics, and there is a labor shortage in
New Orleans, why even bother suspending the Davis-Bacon Act? Any
attempt to lower labor costs when the laws of supply and demand
are pushing them upward should be futile.
A market
knows how to deal with shortages. When there's a shortage of something,
the price for it automatically rises. That applies to oranges,
rhinestones or labor. If you can't find help, you raise the pay,
and the workers will come. That's the way markets work.
There's
only one sane explanation of why Bush would try to lower wages
in a tight labor market: He intended all along to flood the market
with cheap foreign workers.
It's a simple
setup: (1) Get rid of Davis-Bacon, so contractors can offer below-market
pay that Americans and legal immigrants won't touch. (2) Continue
to disregard the law that forbids companies to hire undocumented
workers. (3) When people complain that the workers restoring New
Orleans are not legal, say that they are taking jobs no American
wants.
The one
price that may never rise, in the Bush mindset, is the price of
labor. Companies must cope with rising costs for energy, drugs
or land. If they can't deal with it, they go out of business.
But cheap labor is somehow an entitlement. Bush had no problem
imposing tariffs on steel to protect domestic companies from foreign
competition. But he expects American workers to compete with the
several billion people around the world who want their jobs.
Meanwhile,
the market for upper-income workers remains protected and respected.
All nod in agreement when the hotel executive defends his $10
million pay package as the going rate for a man of his talents.
But supply-and-demand explanations never seem to apply to the
compensation offered the woman who cleans the rooms.
High wages
for the workers rebuilding New Orleans should be a good thing.
They would bring back people who had fled the region. And they
would attract other Americans looking for good jobs. More people
with more money in their pockets are the formula for jump-starting
the devastated Gulf economies. On a national level, better wages
for laborers would help reduce the growing income gap between
the richest Americans and the working class.
A total
mystery is why the sweating masses let the Bush administration
do this to them with so few political repercussions. Are they
stoned in front of their televisions?
The people
are actually riled up by the labor free-for-fall, we are told.
But then Bush gets up and gives his phony tough talk on immigration.
He promises more money for police action at the borders and says
nothing about doing the only thing that can ever solve the problem:
prosecuting employers who hire illegal workers. How about using
the new detention-center beds for them?
If rock
bottom is where Bush wants American wages to go, we have more
ways to get there. We could bring back child labor. We could reinstitute
slavery, which is not far off when companies stop paying illegal
laborers for the work they've done.
Could the
day be near when Bush announces that America needs people to do
the work illegal aliens won't do?
