Biden again follows in the footsteps of Jimmy Carter
President Joe Biden has professed sympathy for American consumers pinched by inflation. But his actions speak louder than his hollow lip service.
Inflation has stabilized over the past 12 months after skyrocketing to more than 9 percent — a number not seen in four decades. But the White House seems intent on exacerbating the problem.
Last week, Vice President Kamala Harris was in Philadelphia to announce that the Labor Department had revamped a rule governing worker pay on federal construction projects. The reform will relax the standard by which so-called “prevailing wages” are set under the Davis-Bacon Act, which dates to the Great Depression.
The new regulation will raise wages for workers on federal projects and, Harris said, “That’s thousands of dollars more every year, to help put a down payment on a home, for example, or to save for retirement, or to simply take their family on vacation once a year.”
Not surprisingly, the vice president omitted the fact that this will also drive up the cost of such projects, further burdening taxpayers and putting more inflationary pressures on the economy.
Under current rules imposed during the Reagan administration, prevailing wages are determined by looking at the pay of half the workers in a given trade in a given area. The new Biden rule would reduce that to 30 percent.
In other words, as Eric Boehm of Reason magazine points out, the Biden White House is barring the federal government from “even considering bids that might pay average wages, thereby obligating taxpayers to pay more than they might have had to in an open market.”
This is blatant sop to organized labor, which embraces Davis-Bacon as a means of limiting competition. Never mind that the data used to calculate the “prevailing wage” is often scattershot and incomplete or that there’s no evidence union labor delivers taxpayers more bang for their buck — quite the contrary. Some of the biggest public sector infrastructure boondoggles — Boston’s Big Dig, for instance — were union projects.
Sean Higgins of the Competitive Enterprise Institute told Reason, “The Biden administration’s decision to turn back the clock on Davis-Bacon Act regulations to a Carter administration-era version will benefit a few well-connected unions while raising costs on taxpayers.” And you can bet that those “well-connected” labor organizations will launder some of their newfound lucre through Biden and his fellow Democrats.
The Congressional Budget Office estimates that Davis-Bacon will cost taxpayers more than $24 billion between 2023 and 2032. The law is a relic and should be abolished. But given the past few years, it’s not surprising that the Biden economic team once again follows in the footsteps of the one-term Carter.
