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Davis-Bacon in New Orleans


Tags InterventionismProduction Theory

Despite all of the public wailing for the desperate state of the poor left behind in New Orleans, to say nothing of all the low-wage workers who recently lost their employers down along the Bayou, the White House announced today that it will apply Davis-Bacon workplace rules to federally-funded reconstruction work in New Orleans.

Although the media will generally couch this decision in terms of enforcing "prevailing wages," in truth it creates unemployment by using the force of law to favor union workers at the expense of other available workers.

This ruling benefits an annointed class of skilled labor living largely outside of New Orleans, it is a form of payback for past political support, it will primarily hurt New Orleans' poor unskilled minorities in great need for work (through which, after all, they would learn the tasks necessary to become skilled workers), it is a wage ceiling imposed at a time of record unemployment claims in the area, and it is another example of a wasteful use of tax dollars in contrast to how private capital would operate.

Christopher Westley a professor of economics in the Lutgert College Business at Florida Gulf Coast University and an associated scholar at the Mises Institute.

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