Democrats Look to Give Preference to Unions in Procurement Process
While the President continues to advocate for fiscal restraint, it is hard to see how any of his, or Congressional Democrats, proposals have shown said prudence. Look no further than the health care bill that passed the House last Sunday and is working its way through the Senate right now. Remember when Obama said that he wouldn’t sign a bill into law that increased the deficit by a penny? Remember when Obama said he wouldn’t raise taxes on people earning less than $250,000 a year? Contrary to these promises, the health care bill Obama signs will raise taxes and increase the deficit.
Why stop there? There are unions to be appeased. The latest Obama proposal looks to change how the government awards contracts to companies. Theoretically, government agencies contract projects to companies who can perform the required job successfully for the lowest price -- a competitive bidding process that saves taxpayers money. Looking to upend this longstanding practice, Democrats want the procurement process to award contracts to companies based on how much they compensate their workers, in what is being called “highroad contracting.” With highroad contracting in place, federal agencies will show preference to companies that pay their workers more, many of which are unionized companies. In fact, it was the AFL-CIO who suggested that Obama implement a new procurement process:
The “new administration should strengthen the existing responsible contractor requirements to ensure that government contracts go to high-road, law-abiding employers that provide good jobs and respect workers' rights."
With the federal government dolling out over $500 billion in contracts each year, there is serious money to be made for unions.
Diana Furchtgott-Roth of the Manhattan Institute explains why this process is so problematic: “In other words, the government would award contracts to the high bidder, not the low bidder. That upside-down logic smacks of waste and corruption.”
Much in the same way the President said he would not raise taxes on families earning less than $250,000 a year; it is becoming more apparent that this administration looks only to pay lip service to fiscal responsibility. Awarding contracts to companies who compensate their employees the most will undoubtedly raise the price tags of such projects, meaning more taxpayer dollars will be sent to union coffers.
Highroad contracting is not only bad for American taxpayers whose money will be used to inflate union contracts; it prices workers out of jobs, thereby raising the unemployment rate.
Diana Furchtgott-Roth explains why this proposal will exacerbate the current downturn for America’s poorest:
“It (highroad contracting) would be particularly detrimental to low-skill workers, because the gap between their wages and the "living wage" is the highest. Employers would have an incentive to lay off these workers and hire those with more skills.
For an example of what happens when the government meddles in wages, look no further than the minimum wage, which primarily affects unskilled teens. After it was increased to $7.25 last summer, the third increase in three years, the teen unemployment rate reached 27%, and the rate for African-American teens went to 48%.”
Highroad contracting is another sop to big labor paid for by America’s taxpayers and poor.
