I guess the Labor Department didn’t get the memo on trying to create jobs, rather than destroy them. As reported by the Wall Street Journal, the Labor Department is investigating several home builders for treating their contractors as…contractors. Anyone with the slightest understanding of the construction industry knows that much of the relationships are between contractors and subcontractors, rather than employees and employer, largely because the projects regularly change.
But from Obama’s perspective, and that of his union allies, such treatment makes unionizing construction workers all that much harder. Without such unionization, construction wages might fall. Obviously that’s the last thing anyone would want when you have about 2 million unemployed construction workers. If wages fell, a few more of them might actually get hired. Someone in this Administration really needs to learn how the basics of supply and demand work, in the labor market and elsewhere.
My favorite part of the story is the union representative complaining about home builders trying to lower costs. She states that home builders need to stop pressuring subcontractors to “go cheaper” on costs: “It’s pretty clear that there’s an enormous pressure to rush to the bottom in terms of keeping costs down.” Maybe if houses were even cheaper, then not eveyone would have had to get such a large mortgage to buy a house and we could have avoided the financial crisis altogether. But then when it comes between choosing to make one of life’s basic necessities - shelter - cheaper or helping to line the pockets of special interests, this Administration sadly continues to prefer the later.