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DC Mayor Gray Presents $300 Million Gift to Local Unions
Last week, following in the footsteps of his predecessors, Washington, DC Mayor Vincent Gray announced the signing of a Project Labor Agreement (PLA) for the construction of the $300 million DC United soccer stadium. His reasoning? The PLA ensures that District construction workers are paid federal Davis-Bacon wage rates.
However, according to TheTruthAboutPLAs.com:
…existing law called the Davis-Bacon Act governing federal, federally funded and DC-funded projects already requires above-market government-determined union scale wages and benefits to be paid to craft labor with or without a PLA. It’s a smokescreen to cover the fact it is a gift to unions [emphasis added].
The White House explains that a PLA is “a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.”
But let’s get real. A PLA is nothing more than a corrupt scheme that removes competition from the construction bidding process and instead awards a contract to unionized construction workers.
Unfortunately, we’ve seen this game played in DC before with Nationals Ballpark. The end result? Eighty-five percent of construction workers and 95 percent of minority-owned contractors were left out of the work, and the project cost tens of millions of taxpayer dollars more than anticipated. Makes one wonder just how much the city actually cares about its workers.
From our support of Right-to-Work laws and public pension reform, it’s no secret that National Taxpayers Union is an outspoken proponent of fair labor laws that benefit workers, not just union bosses. Despite what may appear to be a well-intentioned effort to protect workers, Mayor Gray’s PLA for the DC United Stadium is nothing more than a kickback scheme to his union pals. The deal represents another example of just how dangerous backroom government dealings with unions can be – not only to taxpayers but to non-unionized construction workers struggling to find work in the Obama economy.
For more on the DC United Stadium PLA debacle, go HERE.0 Comments | Post a Comment | Sign up for NTU Action Alerts
DC Mayor Sides with Wal-Mart, Jobs, & the Free Market
Today, DC Mayor Gray announced that he will veto a bill that would require large retailers, including such stores as Wal-Mart, Target, and Lowe's, to pay employees a higher hourly wage than other businesses. In a letter to the DC City Council, Gray said:
I recognize that reasonable people passionately support [the Large Retailer Accountability Act of 2013]. And I strongly believe that all District residents should earn a living wage. However, after careful consideration, I have concluded that the bill, while well-intentioned, is flawed and will fail to achieve its intended goals.
He goes on to list six reasons for rejecting the bill, including that, if enacted, the bill would affect many more companies than just Wal-Mart (the target of the bill’s proponents) and it would result in the underserved consumers of the District's low-income areas to continue to pay more for everyday items (either in traveling longer distances or shopping at stores with smaller selections and higher prices).
What does this mean for DC residents?
Jobs Jobs Jobs. According to the DC Chamber of Commerce, if Wal-Mart builds the two or three stores, 900 jobs will be created and available for low-income and low-skilled District residents. That's more money in their pockets and gaining experience for the future. It's helping take people off of welfare and grow the local and national economy.
What does this mean for DC Government?
For those who believe that the economy creates jobs, they will see some $7 million in new government revenues. That's $7 million that you can use for road repairs (taking down some speed cameras), school reform (add some more kids to the Opportunity Scholarship Program), or (dare I say it) lower taxes for everyone. Other companies will also see DC as pro-business instead of a city picking winners and losers.
For those who think that government creates jobs, sorry. You will be disappointed in the increased revenue because you have convinced yourselves that your citizens who are getting a paycheck from a private, successful company is a bad thing. As a result, the DC Council seeks to override the Mayor in passing this bill, which would require large companies to pay employees $12 an hour instead of the city's minimum wage. They very well may succeed but, as I explored back in July, the consequences will hurt them, DC’s citizens, and DC reputation.
Why discriminatory wages are bad for DC:
Here's what I'm saying and I think that Mayor Gray is saying something similar (though we disagree on the solution): If you are going to make one business pay more for something because of government policy, you should make all businesses do so because that's fair. Be it a McDonalds or a vegan bakery, the government is not the arbiter of success. Success comes from hard work, specialization, local knowledge, and innovation. All of that can be found in the free market.
We will, again, see what develops and if DC will see this wage hike again.
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All too many federal agencies can be cited for having budgetary skeletons in their closet, and U.S. Customs and Border Protection (CBP) is no exception. From poorly managing a drone fleet purchase, to making questionable demands for more employees, CBP has raised fears for the security of taxpayers’ wallets in the past. Yet, Congress has an opportunity to ease future fears, over a controversial new CBP project, before it can cause a fiscal fright.
Two years ago, the U.S. Department of Homeland Security (DHS) concluded a letter of intent with the United Arab Emirates to build a “pre-clearance” facility at Abu Dhabi airport which would allow travelers to the U.S. to clear customs before arriving on American soil. So far, so good: pre-clearance can not only save time and reduce congestion at U.S. points of entry, it can also help ease the way for tourists who contribute to economic activity while visiting here.
Now for the not-so-good:
All these drawbacks lead to one long question: Given CBP’s service challenges at existing airports, is it really a good idea to plow ahead with a facility whose use will be comparatively scarce in the near term, and give another leg-up to an airline backed by its own government as well as ours, at the expense of an already overtaxed flying public?
And “overtaxed” is an understatement. As NTU has often noted, the typical overall government tax and fee burden of 20 percent on a $300 domestic airfare is higher than the average effective rate a middle-class American is likely to pay on his or her 1040 income tax return. International air travelers can have it even worse, with impositions such as separate departure and arrival taxes along with a passenger agricultural inspection fee (which the Obama Administration ill-advisedly considered raising in 2009) and a customs fee.
Proponents of the CBP station at Abu Dhabi argue that the investment of U.S. tax dollars will be minimal since UAE will pick up 85 percent of the project’s expense under the current agreement. But that’s little comfort to tax-weary travelers in America (see above), who remain worried that whatever share they will be forced to commit could escalate if construction or operating costs are not contained. Meanwhile, there’s that pesky matter of how best to apply CBP’s fee collections as well as appropriations from general funds – should they be used to expedite higher-priority passenger and cargo entry-exit services?
Many Members of Congress seem to think so. In June, the House of Representatives passed an amended FY 2014 DHS Appropriations Bill specifically blocking the Abu Dhabi pre-clearance scheme. In May, a bi-partisan group of 11 Senators echoed the sentiment of their House colleagues in a separate letter to DHS Secretary Janet Napolitano, questioning whether the agency’s “decision was made as a result of a risk based analysis.”
Alas, earlier this month DHS announced it was moving forward with a data-sharing agreement that could pave the way for the facility’s activation, even as it faces a concerted petition effort from interested industry groups with considerable clout.
Regardless of the politics involved, the taxpayer aspects of the issue deserve further exploration – that goes not only for the Abu Dhabi pact but also the ever-troubling direction of the Ex-Im Bank. Allowing the free market and fiscal responsibility to sort out needs from niceties would provide some badly-needed bone-rattling for those accustomed to budgetary business as usual in Washington.1 Comments | Post a Comment | Sign up for NTU Action Alerts
The DC Council is expected to adopt new regulations that would force Wal-Mart to play by different rules than other retailers in the District. The measure would require corporations with $1 billion in sales that operate stores with at least 75,000 square feet of retail space to pay their workers $12.50 per hour -- 52 percent more than the District’s $8.25 per hour minimum wage.
What does this mean? Quite a few things. First off, Wal-Mart will reconsider development plans for at least two, if not three, of its stores that are set to open in DC. The stores were a result of years of negotiations between the DC government and Wal-Mart. Now, DC might remain Wal-Mart-free and the avoidable results could be stark. Without the new stores, DC risks losing out on at least 900 jobs and $7 million in annual revenue for crucial items like school repair, community revitalization, or road construction.
There are also the reactions of other big box stores to consider. While Lowe’s doesn’t have a store in DC, Home Depot and Target each have one location. These corporations would be affected, while other popular retailers, such as Starbucks and Apple, would not be.
I am usually examining the unintended consequences of government action but this is wholly intended and understood by lawmakers. Although the law is not explicitly directed at Wal-Mart, the requirements were developed as a result of political tension between the retailer and labor groups within DC. By requiring Wal-Mart to pay wages beyond what is already required by District and federal laws, the Council has all but forced the company to avoid operating in an area with rules that are detrimental to its business. The Council could claim that Wal-Mart is only looking out for its bottom line (like all businesses do), but it would be ignoring the fact that other smaller businesses in DC are paying their workers at lower wages.
Supporters of the Large Retailer Accountability Act cite:
Some large retailers pay very low wages and do not provide their workers affordable health benefits. Without safeguards, large retailers threaten to erode both living standards for working families in the District, especially given the cost of living in the District. By adopting living wage standards for large retailers, The District can ensure that economic development better meets the community’s need for family-supporting jobs.
Supporters also believe that Wal-Mart’s threat of pulling out of DC is a bluff to avoid paying the higher wages.
[The Act] means most shopping dollars will stay in the suburbs, unemployment will remain in the double-digits in some neighborhoods and underserved communities will continue to have disproportionate access to affordable groceries.
According to Slate’s Matt Yglasias:
… I do think councilmembers should consider starting over again. If they think a higher minimum wage would be good for the city, then they should raise the minimum wage. If they think a $12.50 minimum wage would crate a lot of unemployment, then they should raise the minimum wage but raise it to something less than $12.50—there's a big gap between that and the generally applicable $8.25 wage. A special minimum wage that applies to retail workers but not janitors or restaurant workers and to Walmart but not the Gap doesn't make a ton of sense.
We will see how this drama of jobs and wages plays out.0 Comments | Post a Comment | Sign up for NTU Action Alerts
This past week, a diverse group of organizations (including NTU) banded together to ensure employees are properly educated regarding employment freedom. The results have been outstanding, and the word has spread broadly! Check out some of the op-eds and articles that have covered NEFW:
The Washington Free Beacon: “Opting Out:National Employee Freedom Week Survey Shows Union Households Would Leave Labor Organizations.”
Fox News: “Happy Employee Freedom Week, America.”
The Washington Times: “Respecting Employee Freedom.”
The Colorado Springs Gazette: Celebrate freedom from unions during National Employee Freedom Week
Forbes on America’s teachers’ unions.
The Pittsburgh Tribune-Review: “Knowing Rights Empowers Workers.”
The Hill: “Some States Can’t Celebrate National Employee Freedom Week.”0 Comments | Post a Comment | Sign up for NTU Action Alerts
This week, National Taxpayers Union (NTU) is participating in the nationwide effort to inform union employees of their rights known as National Employee Freedom Week (NEFW); which will take place from June 23-29.
During NEFW, a diverse, bi-partisan coalition of over 50 organizations will join forces to equip union employees with the information necessary to make the decision about union membership that is best for them, including non-union alternatives that may better suit their needs. Events are scheduled to take place in over 30 states.
The idea of NEFW grew out of a discovery by the Nevada Policy Research Institute (NPRI) last summer: While right to work movements have found success passing legislation in numerous state legislatures, many union employees in these States did not know the full extent of their new freedoms; even when they did, many did not know how to navigate the procedural requirements to resign their membership.
To explore the issue further, the Institute launched a small scale-information campaign to let teachers in Clark County, Nevada know that they could opt-out of the Clark Country Education Association by submitting written notice from July 1 to July 15. The response to the Institutes information was tremendous and hundreds of teachers elected to opt out. When asked why they had not resigned from the union earlier, many of the teachers responded that they simply did not know or that they forgot due to the inconveniently short drop period window. NPRI realized that the experiences of the Clark County Teachers were not isolated and that millions of union members across the nation faced a similar dilemma. In response, NPRI determined that a large scale effort would have to be launched to inform union employees across the nation of their rights—NEFW had been born.
NTU is proud to be a part of the first NEFW. NTU has a long history of supporting the right of employees and employers to enter into contract, free of union interference. History demonstrates that mandatory union membership harms both parties’ involved by raising costs for businesses and decreasing employment opportunity for workers.
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NTU and Foundation Poll Youth Conference for Their Important Issues
Staff from the National Taxpayers Union and NTU's research and education arm, NTU Foundation, participated in the 2013 International Students for Liberty Conference (ISFLC) with one question for attendees: What policies will you fight for? Over the course of the weekend, students and young adults responded by voting for one of six issues that we thought Americans of all ages could at least agree needs addressing. Many attendees were interested in the mission of NTU and NTUF and asked us many, often challenging questions. I recall one conversation about the economic and realistic reasoning behind whether or not to establish a federal Balanced Budget Amendment. Some even took up the cause of lower taxes and less government by becoming members of NTU or saying that they would enjoy the opportunity to intern with us over the summer. If you’re interested, check out our Internship page. We accept interns year-round and there’s a lot of government to roll back. Still others were looking to show their support for NTU and Foundation in other ways:
Blogger and Vlogger Julie Borowski stopped by for a bumper sticker and a picture
We asked people to cast a vote for their number one issue that needs reform right now. Our six fishbowls highlighted some of the issues we thought the ISFLC participants would identify with the most. The issues were: a Balanced Budget Amendment, cutting the Pentagon budget, ending the Federal Reserve, less spending, real tax reform, and right to work. One lucky entry would be drawn to be interviewed on NTU's Speaking of Taxpayers podcast. The Results were interesting:
We also found that these six issues were just the tip of the iceberg. On a separate board, students pinned other ideas on where NTU and Foundation can help out taxpayers, including stopping sin taxes, ending corporate welfare, and fighting for bacon (yes, we had some serious bacon fans at ISFLC). All of this proved that young people are just as interested in the important fiscal issues as any other age group.
Thanks to everyone who came by our booth and let their voices be heard and congratulations to Annie Setten who will be interviewed next Friday!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Speaking of Taxpayers, December 7 (AUDIO): Victory in Michigan, & More
Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes HERE!
NTU State Affairs Manager stops in with big news from Michigan and around the country, and as always the "Outrage of the Week"!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Yesterday, amidst a throng of angry protesters, union thugs, pepper spray, and filibustering Democrats, the Michigan Senate and House each passed Right-to-Work legislation that Governor Snyder has pledged to sign. Because of a procedural rule, the package cannot be finalized for at least five days, but on Tuesday, Michigan appears poised to become the 24th Right-to-Work state in the U.S. -- quite remarkable for the birthplace of the modern labor movement. Conservative leaders and activists have delivered yet another damaging blow to labor unions in Michigan, where an attempt to enshrine collective bargaining in the State's constitution was defeated soundly on November's ballot.
Also worth noting is that Right-to-Work protects our fundamental Constitutional right to freedom of association. Americans in Right-to-Work states maintain their ability to join unions, but they are also given the ability to decline membership without fear of being penalized.
For more on this historical victory in the Great Lakes State, head over to the Mackinac Center's blog for a great piece entitled "The Human Side of Right-to-Work Legislation."0 Comments | Post a Comment | Sign up for NTU Action Alerts
Last night the Indiana House voted, 55-44, to pass right-to-work legislation. The
Senate passed similar language earlier this week, and a final bill
should be on Governor Daniel's desk next week for signature. So ends a two-year drama of entrenched interests using every possible tactic to fight worker freedoms. NTU sends its congratulations to the 55 members who faced intense pressure on the bill and stuck to their free market principles. Ultimately, this vote was about helping the workers of Indiana and making the state a better place to do business.
Last year, while the nation focused on the drama in Wisconsin, Indiana began its right-to-work fight. Due to procedures that mandates a 2/3 quorum present for all votes House Democrats were able delay consideration of the law by absconding to Illinois for weeks at a time. Republicans, who held a 60 to 40 member majority, eventually relented and pull the legislation from consideration. However, this year, new rules went into effect fining legislators $1,000 a day for consecutive missed days of work. Whether the threat of personal financial loss played a part or not, House Democrats chose not to flee the state again this year allowing for the vote to occur.
Political gamesmanship aside the argument for right-to-work laws is solid. Allowing for greater worker freedoms is sound economic policy. As NTU stated in a letter earlier this month to the Indiana legislature;
According to the American Legislative Exchange Council’s Rich States, Poor States, all 22 Right-to-Work states outpaced Indiana’s 30 percent growth in gross state product from 1999-2009. In our highly mobile world, capital and jobs are flowing to those states with pro-growth environments, one key feature of which is respecting and valuing the rights of workers to accept employment without being forced to pay union dues.
The economic benefits of enhanced worker freedoms are quite clear. Right-to-Work states not only see higher levels of economic growth, but more workers have jobs, and those jobs tend to pay better when compared to forced-unionization states. Statistics from the National Institute of Labor Relations Research, covering 2000-2010, show that Right-to-Work states have seen a 0.3 percent increase in non-farm private sector payrolls compared to a 5.5 percent decrease elsewhere. Employees in those Right-to-Work states have seen compensation rise by 11.3 percent over that same period versus 0.7 percent in forced-unionization states.
More importantly, right-to-work is about protecting basic individual rights. Workers should not see their paychecks held ransom by a third party which they do not choose to join. The American principle of freedom of association protects both the right of a worker to join a union if they so choose, as well as the right to decline membership and financial support for a union if they do not.
Hopefully, by this time next week, Indiana will be the first right-to-work state since Oklahoma in 2001 and the 23rd overall. As Speaker Bosma stated in his floor remarks, "This announces, especially in the Rust Belt, we are open for business here."