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Free Market Project

3/5/2006 11:42:26 AM

Updated 02/24/06

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Lou Dobbs Lobbies for Unions to Bring Home the ‘Bacon’
CNN bashes ‘big business’ with union spokesman, ignoring the truth about wages and workers in the Katrina reconstruction.

By Charles Simpson
September 13, 2005

Send this page to a friend! (click here)     As good neighbors, private charities, and government agencies rushed to aid the victims of Hurricane Katrina, CNN’s Lou Dobbs and Lisa Sylvester offered their own charitable assistance to labor unions and anti-business crusaders.

     In response to the President’s decision to suspend a little-known federal wage law, the September 12 “Lou Dobbs Tonight” gave a cynical report on the “big business interests” that would exploit the change. Meanwhile, the challenges of rebuilding a region, the market principles of labor, and the workers who would benefit from the President’s decision totally escaped CNN’s “business” anchor.

     Lou Dobbs introduced Sylvester’s report with a stacked deck: “Critics say there are few safeguards in place to prevent rampant overspending and fraud by large firms that are already winning lucrative no bid contracts in the Gulf, at the same time as Gulf Coast workers are losing out.” Sylvester tied one corporation to Dick Cheney’s old employer, Halliburton, and to other administration officials like Joe Alba, the former FEMA director. Ignoring those corporations’ qualifications to get the job done quickly and efficiently, she colored them as robber barons with “virtually no spending restraints.” And, even worse, their employees wouldn’t benefit from the windfall because “the President suspended a depression era rule,” the Davis-Bacon Act.

     The Davis-Bacon Act requires federal contractors to pay a “prevailing” wage to employees. But, the federal government doesn’t specifically define what that means, so “prevailing” wage is often interpreted to mean “union” wage. Dobbs’s broadcast has something in common with that principle: his “business” reports are often “union” reports as well. To explain the consequences of suspending Davis-Bacon, Lisa Sylvester turned to Rod Bennett from the AFL-CIO: “those moneys will not be filtered down to the workers. They will be paid the lowest of the lowest wages.”

     Artificially higher wages would not only inflate the cost of rebuilding the region, they would shut out unskilled workers competing for those jobs. The widespread poverty of the New Orleans area and the swath of newly unemployed on the Mississippi coast highlight the necessity of market wages that give all workers a chance to compete. For hurricane victims it’s not just any job, but the reconstruction of their home. Still, Sylvester was shocked at how hurricane victims' Congressmen “have been pretty quiet on this one.”

     Of course, there’s another angle to this decision that CNN callously ignored. The 1931 passage of the Davis-Bacon act was motivated by segregationist labor unions. Rep. Robert Bacon (R-NY) introduced the legislation to help his white constituents lock out Southern blacks from construction projects in New York. According to a 1993 paper by George Mason University law professor David Bernstein, “The act continues to have discriminatory effects today by favoring disproportionately white, skilled and unionized construction workers over disproportionately black, unskilled and non-unionized construction workers.” Thankfully, unions no longer discriminate racially but their practices deny unskilled workers the opportunity to make any wage. Yet, don’t expect Lou Dobbs to expose the deep pockets of their lobbyists.

     This biased reporting is consistent with the findings of a recent Free Market Project Report: “Trade Secrets: Lou Dobbs Tonight Hides Good News Behind Negative View of Free Market.”


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