How Biden Is Talking Out of Both Sides of His Mouth on Inflation

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Joe Biden’s efforts to shift blame from himself and his administration for rising inflation will not be enough. The blame will stay with him like a political tarbaby that the president cannot get out of.

Biden and other radical Democrats blame oil companies, grocery stores, and clothing shops for high prices. This is instead of the policies that he and the Democrats have made to make higher prices inevitable.

Biden refuses to give Americans a break, even though he has the opportunity to reduce costs.

Recently, Congress passed a $1 trillion infrastructure bill that would fix roads and bridges as well as unnecessarily finance improvements in broadband internet. The bill authorizes almost $500 billion worth of construction projects. However, the Davis-Bacon rule is a New Deal-era law that requires that “prevailing wages” be paid for federal construction projects.

The “prevailing wage” was subjected to the “30% rule” until 1982. This meant that the prevailing wages for any given area would be determined based on the highest wages available in the area as long as the workers were at least 30% of the total workforce.

This meant that the “prevailing wages” were the “union wages”, which effectively froze many open-shop contractors from the bidding. The Labor Department removed the “30% rule” and competition grew and costs fell.

Biden’s Labor Department is now seeking to partially reinstate the 30% rule. This will be a boon for Biden’s organized labor backers, and increase costs substantially.

Bosch writes that the revisions are “ill-timed” given current high inflation levels and recently enacted infrastructure spending programs. The higher labor costs will lead to higher inflation, which will reduce the number infrastructure projects that can still be pursued.

These concerns are being dismissed by the department. It claims that the 1982 rule changes that removed the 30 percent rule were partly based on criticisms of the [Davis-Bacon] Act, rather than inflation concerns. The department doesn’t believe that the 30-percent rule should be repealed despite concerns about inflationary effects on government contract costs and speculative impacts on the national macroeconomy.

This wouldn’t be the first instance of the Biden administration ignoring warnings about inflation to achieve political goals. The Labor unions might be able to get a bigger payday, but the rest of us will continue paying more and receiving less.

Reintroducing the 30 percent rule will be problematic due to the way Davis-Bacon wage determinations were made. The wage determinations by Davis-Bacon mean that a Chicago worker will earn more an hour than one working in a suburb 50 miles away. The law will not allow the “prevailing wage” to be applied in suburban areas. This means that the suburban worker will have to get the same wages as the Chicago worker. This is patently unfair for the contractor who is not a union member and increases the cost of a project.

Biden had an opportunity to ignore union demands and control construction costs. It is a shame that his Justice Department has not gone to the bottom of his union friends’ price gouging.