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THE LABOR NOOSE TIGHTENS

June 8, 2018

THE LABOR NOOSE TIGHTENS

Yesterday I saw a Detroit newspaper headline to the effect that the Republicans in the Michigan State Legislature had ended the prevailing wage law that required a “prevailing wage” be paid to workers on public projects. Prevailing wages are typically living wages and the wages this legislature is inviting to be paid are not going to be living wages – guaranteed – since private contractors bidding on state projects such as roads, bridges and buildings will take advantage of this new anti-labor law as an opportunity to increase profits with lowered bids and, thus armed with legislative edict, will employ lots of chicanery and pretense in cutting their workers’ wages to increase their relative slice of the pie. Republicans in the Michigan legislature have thus picked winners and losers; their campaign-contributing contractors win and laboring men and women lose, among others and even all of us, as we shall see.

Republicans in the legislature say that removal of the prevailing wage schedule for public projects will save the taxpayers money, and of course that may be true, but following such logic to its dry end, let’s just reinstitute slavery by legislative edict calling for nothing as a wage scale for work on public projects, which would save taxpayers even more money. Alternatively, why stop at minimum wage (aka starvation wage) levels on our trek downward in dehumanizing wage scales when not only the current atrocity here under discussion is applicable in addition to the recent Republican labor-hating adoption of a grossly misnamed “right to work” law – and in the Land of Reuther! In an ideal world, both such disgusting laws masquerading as being in the public interest should be repealed post haste and without further discussion.

Republicans have thus ventured into the land of what economists call “externalities,” or roughly speaking, unexpected consequences, with their thoughtless removal of prevailing wage scales on public projects. Workers who have been accustomed to a prevailing wage as opposed to the drastic reduction in their wages sure to come have mortgages, car payments, insurance  premiums and myriad other expenses based on their current wage scales, scales that banks, mortgage companies and others depended upon for lending to such workers. They must now brace themselves for late payments, mortgage foreclosures and even bankruptcies along with other vendors who will be stiffed in Chapter 7 proceedings. Neighborhood merchants and grocery chains will note a decrease in demand from such underpaid workers and aggregate demand (the sole arbiter and determinant of economic growth) will be stifled as GDP takes a hit which, along with other such GOP legislative atrocities, brings recession into view.

Note to Republicans in the Michigan legislature > You picked a lot more losers than you thought, losers that include banks, mortgage companies, lumberyards, grocery stores, tax revenues to government et al., not to mention the effects of the billions of dollars in lost GDP and aggregate demand, which underpin our defense against recession. Brilliant move! Thanks for nothing!     GERALD      E

 

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