It turns out that Louisiana has become ground zero of a legal tussle the outcome of which could either promote liberty or empower special interests at the expense of overall economic well-being.
A lawsuit filed by affected businesses of a pending change in the H2-B visa program got postponed last week in federal district court in Alexandria. The change, spurred by a court in Pennsylvania last year, would increase substantially wages of the approximately 66,000 visa holders, who are seasonal workers the employers of which demonstrate there are not enough able and qualified U.S. workers available for the position, and that employing foreign workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.
Just before the Pres. Barack Obama Administration came into power, the Department of Labor issued new guidelines for the hiring and payment of these individuals, subsequently legally challenged by a collection of interest groups with their major contention that the new rules made it too easy to hire foreign workers at the expense of American workers, because they worked at lower (but at or above minimum) wages.
This came as a result of unions artificially pushing up wages and, worse, mandating in many instances that noxious Davis-Bacon Act prevailing wage levels be used, the flawed methodology of which often boosts required wages far above market rates.
Although the groups’ main target was to scale back employer hiring discretion – although this would mean little difference with the 66,000 cap in place – they won big when the court (in a ruling made by a senior judge with a leftist activist and academic history, such as this, prior to his appointment by former Pres. Jimmy Carter), besides ruling those aspects must be altered, said the new rule, which would use the more accurate Occupational Employment Statistics data that tends to track more closely market data, could not use that in place of David-Bacon rates or historical union rates. With a new rule promulgated for the end of this month as a result of that, this brought about the employers’ lawsuit.
While the original intent of Davis-Bacon was to ensure that large-scale federal contracting in an area would not distort wages downwards through collusion of employers receiving this business, use of that concept in this instance of logging, which features a paucity of contracting, does not make sense. Making even less sense, the arbitrary inflation of those rates would cost American jobs in any event, because it would price some, perhaps many, American producers out of the not just the foreign but domestic marketplaces.
For some reason, the hearing in Alexandria got postponed where the Obama Administration, now having the federal government switch sides, and the special interests want the suit either dismissed or sent to the very friendly Pennsylvania court with the clock ticking. For the short term, immediate injunctive relief is needed; in the long run, until a presidential administration without an antipathy to the marketplace, Congress will have to act to make sure such deleterious regulations are not issued to please unions and liberal advocacy groups.
Posted by Jeff Sadow at 10:30