Inquiring minds are watching
an excellent video on The Kudlow Report between Larry Kudlow and David Harkin.
Harkin is the author of a study on US infrastructure and a professor at the
university of North Carolina Charlotte.
Partial Transcript
Kudlow: President Obama wants to spend another $50 billion on repairs
to our infrastructure. Do we really need it? That would be on top of the over
$100 billion for the nonshovel ready projects back in the 2009 stimulus.
Remember that? There's a new study that says we may not need it. Our roads
and bridges are not crumbling and are much better than they were 20 years
ago. How about that good news? David Harkin is the lead author of that study.
David, thank you for coming on. I read the reports. Throughout the country in
real terms adjusted for inflation, state control, highway spending has
increased by 60%. 177% in nominal terms. 60% in real terms. They had good
results.
Harkin: We were quite surprised when we looked at the numbers. The
highway system has gotten better on all seven measures we looked at.
Accidents rates are down. Even the pavements have been improved particularly
for the interstate system. Even congestion is down too. This isn't, I think,
generally common knowledge. Most people think the infrastructure is crumbling
or falling apart. We found just the opposite.
Kudlow: Why is Washington then, so manic and obsessive about pouring
more and more infrastructure money? Why?
Harkin: Well, the fundamental problem here is that the states control
how that money will be spent. Some of it comes from the federal government
and some of it from the states. So the feeling in the states and in
Washington is that we just need more and more and more. But in fact the
numbers don't support that. The numbers suggest that we're making progress
and that's very good news for the public. So, in terms of where the issue
should go here we ought to look very carefully at whether these requests are
really needed.
Kudlow: David, here's one of my big beefs. This is highway money and
bridge money. Davis-Bacon, the prevailing union wick, once you use federal
dollars and it's true for these big union states like New York, New Jersey
and California, Once do you that you have to pay the Davis-Bacon prevailing
union wage rate which is at least a third higher than if you did it
privately. That's my biggest beef about spending all this money.
Harkin: In our study we showed the cost for doing this work are much
higher in a few states compared with the rest of the country like California,
New Jersey, New York are very high cost states relative to the other states.
To go back to the earlier question regarding whether this is just a problem
of the interstate system or whether the civil engineering report is correct,
you know, let's remember the civil engineering report looks at only one year
and is based on opinions from local experts. But it doesn't look back in time
to see whether we made progress. David Harkin thank you ever so much.
congratulations on your study which blows the lid off all this infrastructure
money proposal coming out of Washington.
End Transcript
Davis-Bacon Background
I have discussed Davis-Bacon on many occasions. Inquiring minds interested in
a background on the original purpose of the act should read My Thoughts on the Davis-Bacon Act.
"... while the sponsors and supporters of the Act also intended it to
disadvantage immigrant workers of other races, these thinly veiled references
make it clear that the Act was primarily intended to discriminate against
blacks."
The Davis-Bacon Act as amended, requires that each contract over $2,000 to
which the United States or the District of Columbia is a party for the
construction, alteration, or repair of public buildings or public works shall
contain a clause setting forth the minimum wages to be paid to various
classes of laborers and mechanics employed under the contract. Under the
provisions of the Act, contractors or their subcontractors are to pay workers
employed directly upon the site of the work no less than the locally
prevailing wages and fringe benefits paid on projects of a similar character.
The Davis-Bacon Act directs the Secretary of Labor to determine such local
prevailing wage rates.
There are 117 classifications of jobs for which some set of bureaucrats must
determine "prevailing wages". Here is a partial list:
ASBE = International Association of Heat and Frost Insulators and Asbestos Workers
BOIL = International Brotherhood of Boiler Makers, Iron Shipbuilders,
Blacksmiths, Forgers and Helpers
BRXX = International Union of Bricklayers, and Allied Craftsmen
(bricklayers, cement masons, stone masons, tile, marble and terrazzo workers)
CARP = United Brotherhood of Carpenters and Joiners of America
ELEC = International Brotherhood of Electrical Workers
(electricians, communication systems installers, and other low voltage
specialty workers)
ELEV = International Union of Elevator Constructors
ENGI = International Union of Operating Engineers
(operators of various types of power equipment)
IRON = International Association of Bridge, Structural and Ornamental Iron
Workers
LABO = Laborers' International Union of North America
PAIN = International Brotherhood of Painters and Allied Trades
(painters, drywall finishers, glaziers, soft floor layers)
PLUM = Operative Plasterers' and Cement Masons' International Association of
the United States and Canada
PLAS = United Association of Journeymen and Apprentices of the Plumbing and
Pipe Fitting Industry of the United States and Canada
ROOF = United Union of Roofers, Waterproofers and Allied Workers
SHEE = Sheet Metal Workers International Association
TEAM = International Brotherhood of Teamsters
Even FDR Understood the Problem
Public unions get into bed with management and politicians and work out sweet
deals for themselves at taxpayer expense. No one looks out for the taxpayer.
Even FDR understood the problem.
Message From FDR
Inquiring minds are reading snips from a Letter
from FDR Regarding Collective Bargaining of Public Unions written August
16, 1937.
All Government employees should realize that the process
of collective bargaining, as usually understood, cannot be transplanted into
the public service. It has its distinct and insurmountable limitations when
applied to public personnel management.
The very nature and purposes of Government make it impossible for administrative
officials to represent fully or to bind the employer in mutual discussions
with Government employee organizations.
Particularly, I want to emphasize my conviction that militant tactics have no
place in the functions of any organization of Government employees.
A strike of public employees manifests nothing less than an intent on their
part to prevent or obstruct the operations of Government until their demands
are satisfied. Such action, looking toward the paralysis of Government by
those who have sworn to support it, is unthinkable and intolerable.
Time to Scrap Davis-Bacon, End Public Union Collective
Bargaining
Before any project can be economically viable, labor costs must be addressed,
and that is exactly why we need to scrap Davis-Bacon and all prevailing wage
laws. We also need to eliminate collective bargaining of public unions.
Unless and until we do that, we will dramatically overpay for infrastructure
projects and taxpayers will pay through the nose for them.
Government should strive to provide the most services at the least cost.
Public unions strive to provide the fewest services at the most cost. Is it
any wonder cities and states are broke?
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
