Obama Executive Order is Already Raising Health Care Costs

This is from the Wall Street Journal:

[Under] an executive order President Obama signed within weeks of taking office…only contractors that agree to union representation are eligible for work financed by the U.S. taxpayer.

Only 15% of the nation’s construction workers are unionized, so from now on the other 85% will have to forgo federal work for having exercised their right to not join a union. This is a raw display of political favoritism, and at the expense of an industry experiencing 27% unemployment.

[A] Department of Veterans Affairs…study shows[s] the Obama project labor agreements would likely raise the VA’s construction costs for hospitals by as much as 9% in three of five markets—Denver, New Orleans and Orlando. In two others, New York and San Francisco, the study predicted a mixture of small cost increases and small cost savings.

The Veterans study mirrors academic work showing that project labor agreements raise the costs of construction by 10% to 20%.

Comments (7)

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  1. Ken says:


  2. Stephen C. says:

    Notice that this policy is the opposite of what we should be doing in a deep recession, with double digit unemployment. We should be making it as cheap and easy as possible to hire labor — not the reverse.

  3. Neil H. says:

    Everything that this administration has done or has proposed is designed to raise the cost of labor and make employers less likely to hire people.

  4. John Lilly says:

    Fine. Let the union contractors have the government projects, and ONLY the government projects. All private construction has the choice to use non-union contractors, so if a private entity needs construction and a union contractor submits a bid then tell them no thanks, go do the government projects.

  5. Virginia says:

    I agree with Ken. Disgusting.

    It wouldn’t be a problem to have government only hire a certain percentage of workers except that the size of government has grown so much. It’s the sheer number of government construction jobs right now that makes it difficult to resist unionizing.

    But there’s an interesting irony in the story: Does Obama really want 85% of the U.S. construction force to starve because they’re not unionized? Apparently so. Where is the fairness in that, Mr. President?

    And let’s see where we stand in 20 years when we have to do a government bailout for the big US construction firms because labor has been shacking up with the politicians and we’re no longer competitive with other countries.

  6. Ian Random says:

    I think I remember someone proposing a faux union where people pay a buck for lifetime membership. I often wonder what is the minimum that a union can go, so that in effect it only says this person should be competent rather than competent and this is how much you have to pay them.

  7. Paul says:

    Illinois public schools are required to pay “prevailing wage” another name for union pay rate for every job that does not hire union people. The low bidder on a job must agree to prevailing wage. The taxpayer loses because the prevailing wage is always above what the free market wage would be. jobs at schools do not get done because the schools cannot afford the higher wage.

    Prevailing wage laws are similar to what is stated in this blog. It is another example of how unions and their political hacks hurt this country economically. It is buying votes with public money.