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Let free market work

By Staff | Mar 5, 2010

Sometimes a proposal that sounds like a good idea at first glance turns out to be quite the opposite.

That’s the case with a measure being pushed by Democrats in the Iowa Legislature to mandate what they are calling a “prevailing wage” for workers hired by contractors on government projects.

According to proponents, a prevailing wage law would keep contractors from cutting costs by paying unfairly low wages and/or restricting benefits. The plan is to have state bureaucrats determine for various regions in the state a so-called prevailing wage. It appears the goal is to have contracts developed through collective bargaining used as the reference point for such calculations. The result would be to have the state government require that a union wage and benefits be paid for public projects. Proponents of this approach contend it would prevent workers from being underpaid.

That goal sounds noble, but the real effect of this law would be to make taxpayers pay more for government-funded projects.

Wages should be set in the marketplace, not dictated by government officials.

The current economic downturn has caused too many politicians to forget the basic economic principles that have allowed this nation to prosper. Government intervention in the operation of markets should always be approached with skepticism. Some regulatory measures are needed to make sure competition proceeds in a fair, orderly fashion. The prevailing wage proposal, however, clearly goes well beyond anything government should require.

Farm News strongly opposes this measure. If it were to become law, Iowa taxpayers could expect to pay more for needed government projects. In a troubled economy, that might mean some important infrastructure work would be deemed unaffordable. If that were to happen, we all would lose.

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