The Drip, Drip, Drip of Government Acid on the Economy

The Drip, Drip, Drip of Government Acid on the Economy

While the local economy struggles to recover from a long running recession, the City and County governments seem intent on further undermining what’s left of the free market for labor in Pittsburgh and Allegheny County. The recent assault comes in the form of prevailing wage laws that will require artificial above market wages for employees working at firms who have received or are benefiting from "economic development" help from the City and County.

Proponents of the new wage laws argue there will be little impact on jobs and therefore using the strong arm of government to mandate higher wages is acceptable and justified. This argument fails to understand the cumulative impact of the government’s meddling in the economy and the role that meddling has played in holding down private sector job growth in the region for decades. Absent the health care and post secondary education jobs gains, the City, County and region have seen no net private employment gains for the last ten years and have averaged far slower than national growth for several decades.

Labor laws that are grossly unfavorable to businesses and taxpayers have already taken a terrible toll on the state and region. Prevailing wages in construction, public safety unions with labor favoring binding arbitration regulations, and teacher and transit unions with the right to strike have created an overly expensive and unfriendly climate for companies and high taxes for residents.

The City and County prevailing wage laws will add to the market disrupting forces already instituted and will require further interference later on as the unintended consequences multiply and insidiously stifle economic growth. More and larger taxpayer subsidies will be necessary to induce businesses to risk investing here to offset the higher wages that must be paid. These projects will have an even lower return for taxpayers than the ones currently receiving government aid-taxpayer assistance that was necessitated by the poor investment climate created by earlier misguided policies.

There is no way to recoup the enormous and rapidly accumulating deficit of jobs and income the City and County have already engendered by the anti-free market environment already in place. Unfortunately, those who live and vote for government officials in the City and County will pay the price for voting for candidates who choose to make things worse. Their children and grandchildren will poorer for those votes.