According to the Wall Street Journal, President Obama will soon issue an executive order that will force companies bidding on federal contracts to pay higher "living wages and benefits" to their employees. Dangling in the wind is $500 billion worth of business. It's pay-to-play. For instance, SEIU spent $60 million to get Obama elected president.(Paid subscription may be required for the full story.)
The government can't steer contracts directly to the unions. But it can use its authority over how taxpayer money is spent to favor unions and their agenda. This is good news for Andy Stern and his Service Employees International Union. But not so good for job creation.
The proposed Executive Order is being drawn up by Joe Biden's Middle Class Task Force. It would oblige government procurement agencies to give contracts to "responsible contractors" who pay workers well and offer higher health, pension, sick leave and other benefits.
At each federal agency, a new labor commissar tasked with making these judgments will also have discretion to award an advantage to companies which, by some calculation, treat employees better. Under Democrats, this would tilt toward unionized companies. And these labor standards would have to be enforced across a company, not just at the unit bidding for a contract. This is opening the back door to government-mandated labor standards, another union dream.
Because the rule could force up salaries and expand benefits for existing workers, it creates an incentive to cut employment rolls. Unions usually worry less about European-style chronic unemployment than merely protecting whoever has union jobs now. Barely 7%, and falling fast, of the private-sector work force today belongs to a union.
Small business will be hurt by this order--and of course it is small business that creates most of the new jobs.
Once again, I have to ask: What happened to the Democrats' laser-focus on jobs?
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