Yesterday, the President signed an executive order that raises the minimum hourly wage on Federal contracts from $7.35 to $10.10. This makes for good press, but the order effectively does nothing and costs contractors nothing, and will bring benefits to no one but those hoping to get a warm and fuzzy feeling that somehow they have helped those on the bottom end of the work chain.
Don’t take my word for it… read the entire order here, straight from the White House Press Office:
Good press is what this order is all about since the following things are applicable.
The Executive Order (XO) does not go into effect until January 1, 2015. Why not on contracts negotiated between now and then? I cannot help but continually noticing how media events show smiling politicians standing around as laws are signed which do nothing now, and mostly do nothing later after they have been changed, amended, waived, or executive ordered out of actually accomplishing anything, particularly if they were going to accomplish something before the next election. I suppose they think we are really that stupid. Are you?
The XO cannot be implemented against those who already have contracts with the Federal government, so will likely take three to five years to work itself into fulfillment since even the Federal Government cannot unilaterally change an existing commercial contract, though it seems to be able to change the law at will. Remarkable.
Since the Federal government pays for Federal contacts, these increased costs will be borne one hundred percent by the Federal government, which is you and me.
The Davis-Bacon Act, already at work here and has been for many years, requires that any projects with as much as one dollar of federal money pay wages at the prevailing local rates per job classification, which are almost always very near the equivalent of union wages. This was a union-protecting piece of legislation. Employers working on contracts which fall under Davis-Bacon have to submit weekly payroll certifications of compliance, as usual, swearing under the penalty of perjury that the records are true. The government gives us a whole lifetime of opportunity to perjure ourselves, adding one more as employers must soon swear they have not kept their employee level purposefully under the threshold just to avoid the ACA’s now twice-delayed employer mandate (which is a not so obtuse way to get at your illegal thoughts, for how else can the government control how many employees you choose to have or not have), and always reminding us of perjury’s severe penalties, which for some at the top levels of politics have been as harsh as those penalties of law for unauthorized upholstery tag removal. The Davis-Bacon Act has virtually guaranteed for many, many years that no one makes minimum wage on a job funded by the Federal government, even if they are not specifically Federal contracts. It is nearly impossible to make minimum wage on a Federal contract. No one in Mississippi does, and I’d be really surprised if they do anywhere else. The only Federal employees who make less than minimum wage are some White House interns, and the President’s XO offers them no relief now or later.
Labor Secretary Thomas Perez said yesterday that this increase in the minimum wage on Federal contracts will not cost employers anything, and he was telling the truth, but got his rationale all wrong. It will cost employers nothing because it does nothing. When and if wages are actually raised, it will cost employers nothing because the government will bear the cost, since it is the consumer who always pays, even if it is the government, and a janitorial contractor who is guaranteed a percentage of profit on a minortiy/woman-owned/small business set-aside project will make more money since it is costing him more money. 15% of a million is more money than 15% of half-a-million, at least it was before we had common core standards in our schools. Maybe I’m a bit too hasty to be to be so sure about that now; numbers and the way they work may have changed with the politics. I’ll check on that and get back to you.
Labor Secretary Perez had the misplaced alacrity to claim that this minimum wage increase would not cost employers anything for the wrong reason…that the required wage increase would result in greater efficiency from workers, offsetting the increased costs, resulting in greater profits to contractors due to increased efficiency of their employees. So, does that mean a contractor will be able to do more work with fewer employees, causing a net job loss? Or does he perhaps think that poorly performing employees will suddenly just become models of workplace efficiency because their employers are compelled to pay them more money?
No one who works for us makes minimum wage. No one who works for us makes $10.10 per hour, either. But, imagine the following scenario if you will.
“Mr. Sharp, I’d really like to get a raise,” said an employee just barely capable of operating a shovel, who was sporting the saddest hang-dog look he could muster while addressing me. “My car needs new tires, the baby’s sick, my wife got laid off, the dogs need to go to the vet, the bills are just piling up, and they are about to re-possess my trailer.”
“So you think a raise would help you solve all that?” I ask.
“Oh, yes sir. It would put me right back on my feet right away,” he said, perking up, the hang-dog look vanishing as he saw what he thought was weakness.
“Why do you think you deserve a raise?” I ask, my best poker face on. It was poker face meets hang-dog face, and I was pretty sure which face was going to win, but I wanted to hear this thing out.
“I sure do need one,’ he said, hang-dogging longer and longer, until it nearly was dragging the floor in its hang-dog longedness. It was all I could do to keep my poker face.
“But on what basis do you deserve one? Need is not a claim,” I said.
“Well, I would do you a better job,” he said.
“Are you not doing your best job now?” I ask, poker face turning to granite. He seemed reluctant to answer. I, on the other hand, was not reluctant to answer on his behalf. It is true, I was holding all the cards as I had the wages and the job, and he apparently needed the wages more than I needed him to work for me.
“You are late for work at least two days per week. You take off early at least one day per week. You are late coming back from lunch nearly every day. You miss at least one entire day of work nearly every week, mostly on a Monday. We here at the office and your co-workers on the crew are usually surprised when you show up on time on Monday morning. You call in and say you are sick when I think what you really mean to say is that you just feel bad, or perhaps merely don’t feel good, or maybe just sleepy. Your crew cannot count on you. Your foreman tells me that you understand the work you are supposed to be doing, but every day he has to tell you specifically what to do even though what you are supposed to be doing is exactly like it was yesterday. We are beginning to think that you are incapable of learning, or is it that you are simply unwilling?” I ask finally, and then shut up.
“Oh! No, sir! I can learn, and I am going to do a better job, I promise, cause I sure do need the money, and I mean I need it bad,” he said.
“If you need the money, perhaps it would be well for you to remember that this is a full-time job, yet you choose yourself to make it a part-time one, only managing to work about thirty hours per week. You’d have more money if you showed up for your job.”
“I promise I’ll do better,” he swore, raising his right hand. I wasn’t falling for it.
“Well, let me see you do better. Let me hear from your co-workers and immediate supervisors something besides complaints about you, your work, and your work habits. Let me see weekly time sheets that show you are there, on time, every day, for at least a month, and I might consider giving you a raise. The way this works is that you show me you are worth a raise…you’ll never get a raise by promising more if you get more money…in fact, you’ll be lucky to keep your job if things don’t improve. It is not I who will decide when you deserve a raise…it’s you.”
He left with a longer hang-dog face than he came in with, if that were possible, and it seemed that it was; it trailed behind him as if it were a soiled bedspread dumped in a kid’s red wagon with the rubber missing from the metal wheels, the hang-doggedest face that now ever-was caught under the jagged-edged wheels, stretching and bruising itself further. It was a genuine face now, no longer a show, and I could hear muttering under his breath as he walked down the hall. I laughed to myself at what he might have been saying about me, thinking he was even more foolish if he thought that that was the first time anyone had muttered things under their breath they did not particularly want me to hear.
I do not enjoy exchanges like that. Every employee has the right to ask me for a raise except for those covered under a collective bargaining agreement. It is my right to refuse a raise, and it is my very great pleasure to grant a well-deserved one. The hollow promise of more later does not move me, nor does the cry of need from one who does not show up to defend the job he already has.
I read somewhere that less than twenty million or so people make minimum wage. That is not a very big number according to the President, who said that only thirty million or so people were likely to be affected by ACA-precipitated health insurance cancellations, which was hardly enough to worry about, when he suddenly reversed himself and allowed them to try and keep the already canceled policies, many of which were no longer available. In doing thus he seemed to double-cross the insurance company dupes who signed on but effectively guaranteed a trigger of the bail-out of the insurance companies, meaning that the government will pay, much like the government will pay for the executive order increasing minimum wages on Federal contracts. The government pays and the government pays, even when it has no money to pay. It spends like my employee who needs the raise; far beyond the means.
Man, oh, man, things are as complicated as webs spun by spiders on peyote. Don’t worry…Just like I am an equal opportunity employer, I am an equal opportunist when it comes to seeing that no real difference exists between Washington insiders of any party. “If the people have no bread, just promise them cake while showing them a picture of the cake we would give them if we were actually going to give them anything,” they seem to really say to each other while holding press releases for our benefit.
Maybe they can feed us the 1150 calories the first lady says our school children need to stay healthy while they serve bleu-cheese covered rib-eyes at several-course state dinners at the White House, all while having press releases touting executive orders which look good, and sound good, yet do absolutely nothing.
I think I’ll go and get me a rib-eye and look and see if I can find anyone willing to work for me for $10.10 per hour. Maybe I’ll tell a few of my employees, as a joke, that due to the new minimum wage, I am going to have to cut their wages to match it. Oh, you mean there is no maximum wage? Not even for bankers and hedge fund managers?
If I did threaten to cut their wages, they’d all laugh right in my face, many of them not bothering with muttering, and turn around and go right back to their work, knowing it was a joke. They’d ignore me just like they tend to ignore the employee that wanted the raise, since it is usually easier to just do for themselves what he should be doing rather than repeatedly explaining to him all over again just which end of the shovel he is supposed to use and why they don’t want to loan him money for lunch.
Yet, we will all struggle one more time with him. We all hope he gets his raise, and many more. If he does not qualify for one soon, then others will have to provide him with a job, since he will have neglected the one he has right into oblivion. Maybe he can get one of those government contractor jobs then, and enjoy his cut in pay the new Executive Ordered minimum wage furnished for him.