Flood victims, rebuilders will be working for ‘poverty wages’

Commentary

No one can say the Bush administration doesn’t have clear priorities. While the job of picking up the bodies of victims so they can be laid to rest is proceeding with agonizing slowness, plans to put in place a structure to reap maximum profits for corporate profiteers has gone ahead faster than Katrina’s 170 mph winds. And the long-term results for the region and the country may be just as devastating.

Billions of dollars in no-bid contracts to giant contractors like Halliburton are already a golden trough for the corporate hogs on whose behalf the Bush administration governs. But on Sept. 9, the president announced a platinum lining for that golden trough: He unilaterally suspended the federal law requiring that workers on construction done with taxpayer dollars be paid at least the average rate of pay that prevails in that region. Bush’s ruling covers most of the four-state area devastated by Hurricane Katrina. It could easily be the biggest pay cut in U.S. history.

Bush claimed that he suspended the prevailing wage law, known as Davis-Bacon, in order to lower reconstruction costs. But there is no evidence that lowering wages will do that. In fact, wages are typically less than 25 percent of total construction costs.
“The president’s proclamation doesn’t require contractors to offer lower prices,” pointed out Tom Kiley, spokesperson for Rep. George Miller (D-Calif.). “They could just use it to pad their profits.” Miller has introduced legislation to overturn the president’s suspension of Davis-Bacon. Kiley told the World that the $60 billion already flowing into the region could easily go up to $100 billion or more and will create “thousands and thousands of jobs.”

The priority for hiring for these jobs should be for people who lived in the area, Kiley said. “It makes sense that the people who lost their livelihood should earn wages and have an opportunity to learn new skills” in decent-paying construction jobs, he continued.

Ironically, Bush’s action brings to light shocking proof of the neglect and poverty of the Louisiana-Mississippi region. Prevailing rate for some unskilled categories is already as low as $6.50 an hour in parts of that region. Rates for pipe layers, said Kiley, are already as low as $9. Prevailing rates for higher skilled trades like electricians hover under $20.

These low wages constitute an emergency in themselves, but Bush’s edict will allow contractors to establish wage scales on federal projects even lower than these abysmal levels, further driving down the wages of the entire region. Minimum wage is now the legal limit.

“It’s outrageous that Bush would make a unilateral decision that the jobs of rebuilding New Orleans and the Gulf Coast would be done at poverty level wages,” Stuart Acuff, director of organizing of the AFL-CIO, told the World.

The Building and Construction Trades Department of the AFL-CIO called Bush’s action “legalized looting” of the workers who will be cleaning up toxic sites and struggling to rebuild their communities. “They want to pay the poorest workers the lowest wages to do the most dangerous jobs. Once again this administration is looking out for corporations eager to profit from a national emergency,” said a statement from the BCTD.

The original purpose of Davis-Bacon was to prevent unscrupulous contractors from using a federal contract to drive down wage rates. Before the law was passed in 1931, whenever there was a big federal project, contractors from outside an area would bid and win work based on substandard wages, explained Jack Love, business manager of Pipefitters Local 188 in Savannah, Ga. Rather than use the local labor force, “they’d load up laborers from low wage regions and bring them in to live in tents and squalor,” said Love, explaining how this drove down the wages of entire regions.

Davis-Bacon requires the Department of Labor to do a survey of wages paid in various classifications in each region to determine the prevailing wage. They take into account both union and nonunion wages. Then projects funded with taxpayer dollars must pay wages at least equivalent to the region’s prevailing rate.

Workers in the building trades were quick to note that Bush made no proposal to control costs by requiring contractors to keep their profit margins under prevailing profit rates. Nor did he use the national emergency to declare a limit on CEO salaries. In the trades, workers call this the screw-the-guy-who-is-actually-doing-the-work policy.

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