Laboring the Economy
Posted by aogMonday, 02 February 2009 at 09:19 TrackBack Ping URL

KausFiles reports that

[President] Obama has issued a late Friday executive order requiring that when a government service contract expires—and there’s a new contract to perform the same services at the same location—the new contractor has to keep the old workers. Why?

Kaus then observes

For example, the Obama administration itself can be seen as having won a new contract to perform the same Federal services, at the same location, as the previous contractor, the Bush Administration. Did Obama keep all of Bush’s employees in order to reduce “disruption” and enjoy “the benefits of an experienced and trained work force that is familiar with the Federal Governments … facilities”?

Yes, well, such rules only apply to the little people.

But beyond such blatant hypocrisy is the consideration of what this means in practice. How, exactly, could a new contractor keep the workers for the previous contractor? This is likely to make contractors de facto government agencies that can’t be reformed, only eliminated along with what ever services were being performed. I.e., the services will be held hostage to keep the same workers in the same jobs regardless of performance. Well, I can see how that concept would be attractive to Obama.

Comments — Formatting by Textile
Harry Eagar Monday, 02 February 2009 at 11:49

Odd, although when the ambulance contractor here was outbid a few years ago, the new contractor took over all the old staff.

Good thing, since there weren’t any spare, unemployed EMTs waiting to compete for the jobs.

Annoying Old Guy Wednesday, 04 February 2009 at 08:17

Not odd at all, if you understand the difference between consent and coercion. I would think that obvious, but you cause me to reconsider that position.

Harry Eagar Wednesday, 04 February 2009 at 11:43

Please read what I said, which was that Obama’s move was odd.

The additional comment was just a factoid that should join numerous other related factoids for anyone interested in the Reagan policy of driving American wage levels down toward Third World rates.

Annoying Old Guy Wednesday, 04 February 2009 at 16:36

Uh, right. Clearly. How could I have missed that?

Harry Eagar Thursday, 05 February 2009 at 15:23

Perhaps because you assume I am in the tank for Obama, although if you read Restating the Obvious you would begin to doubt.

However, this brings up something that’s been nagging me for years, although I have not quite figured out what I think about it. Take the EMT case, for example:

It makes a difference whether the new contractor proposes to 1) make the same profit on smaller income by being more efficient; or 2) is willing to take a lesser profit on the same income; or 3) intends to make the same profit by cutting the pay of the workers.

3) is, of course, Reaganomics.

Pay scales are not sacred. They fall for a variety of reasons. But 3 is not neutral, and economic history suggests a variety of outcomes from trying 3, some of them not pretty, even if, to a free market economist 3 will always look more efficient and will be preferred.

Annoying Old Guy Thursday, 05 February 2009 at 15:47

I was around for former President Reagan and I completely disagree on your assessment and leave it at that.

It is certainly not the case that

to a free market economist 3 will always look more efficient and will be preferred.

You might want to read up on what free market types write about Henry Ford and their alternative explanation for his higher pay scales (it’s not in order to let the workers be able to buy cars).

Harry Eagar Friday, 06 February 2009 at 13:23

It was to address his — ahem — 1300% annual staff turnover. But it had the effect of allowing them to buy cars.

Like Ford’s efforts to keep his assembly line going drove wages up, Reaganomics had the effect of driving them down.

Nefarious plot or happy circumstance for plutocrats? You decide.

Annoying Old Guy Tuesday, 10 February 2009 at 09:04

You knew that, yet still made your claim about free market economists always favoring lower wages? You have made a big deal about knowing history. I think that’s not enough, you should also try to apply that knowledge. Give it a whirl, it might be interesting.

Harry Eagar Tuesday, 10 February 2009 at 11:29

Ford was not a free-market or any other kind of economist, and in the long run he devoted all his efforts to driving wages back down — after the failure of his assembly line.

‘Sfunny. The 1920s Republicans worked to keep American wages up. Their efforts failed. Now they work to keep them down. They are much better at that.

Annoying Old Guy Tuesday, 10 February 2009 at 11:49

I didn’t say Ford was a free market economist. I recommended that you read what free market economists wrote about Ford and his wage policies. It’s basically what you wrote, that Ford paid higher wages because he needed higher quality workers and less turn over. That is, free market economists do not always claim lower wages are a better choice for the owner of a business.

Yes, clearly it’s a stunning the amount of success that the GOP has had at lowering workers’ wages down from 1920 levels. Another demonstration of how you apply historical knowledge to discussions of the present.

renee m. smith Friday, 13 February 2009 at 20:41

my daughter was one of the two girls who died in the irrigation siphon. what to say? i’m devistated, unable to function. compleaty fucked up. my daughter was beautiful she had a sister, brother, cousins, aunts and uncles. Grandmothers and granfathers. a future to have childeren of her own and to be auntie and mother to her own childeren. you talk and write about A$B. i am sad and didn’t know what to do. i saw the place were my daughter got into trouble and knew that it was impossible for them to avoid the trouble they were in. no way out. the conditions were imposible to avoid in an instance. an eight foot wall with no grips,fosight was none as it took a right hand turn without anyway to see what was i said there was no way out no warning just “oh shit” your dead now.maybe i’m just asking you to listen,maybe i’m asking you to care about the responcibilty of A.B. to be more careful of thier property so no one else will be hurt or die.renee smith

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