O'Guvnah The Corporatist

Brian Griffiths at Red Maryland does an excellent job pointing out the supreme fallacies of prevailing and living wage laws in the State of Maryland, and does a fair job of taking down the silly, childish claims of Secretary of Labor Tom Perez.

However, Brian left out a key reason for prevailing and living wage laws that goes back decades:  prevailing and and living wage laws squeeze out cheaper competitors and limit competition.  O'Guvnah is in favor of prevailing and living wage laws because he is a coporatist.

Large companies love this kind of regulation.  They always have.  Do you know who actually wrote the laws concerning meatpacking inspections?  The meatpackers.  They loved the muckracking caused by Upton Sinclair's The Jungle.  Why?  Because they imposed strict quality standards that pushed local butchers out of business, thereby eliminating local and individualized competition.

Despite their claims, large oil companies love the the regulation of boutique fuel mixing, because only large oil companies have the capital wherewithal to support the myriad menu of boutique fuels across the country.

Construction companies and contracts absolutely love the concept of prevailing and living wage laws because they squeeze out the potential of small, more flexible competitors -- often minority, and more often non-unionized -- that might undercut them.  That is what this lawsuit against the University of Maryland Medical System is all about.  Whiting and Turner have a virtual stranglehold on all construction at UMMS, and they won't give that up easily.  They have spent a lot of money on Rick Dunning (VP of Facilities Planning, Design, and Construction for UMMS), and they don't want to lose that investment.

Unions love the concept because it artifically inflates union wages.  But it also achieves their key objective of narrowing the number of companies they have to organize, confront, and deal with.

Simply put:  big business loves big government because big government enables big business to limit competition. Labor costs -- due to the high mobility, specialization, and productivity of labor -- are the largest cost base for any large organization. Oddly enough, controlling labor costs by raising the cost of labor enables big business to squeeze out lower-cost competitors, forcing customers to deal with and pay for higher-cost producers.

And O'Malley loves big business.  Because their leaders contribute to his campaigns and the campaigns of those he supports.  And the companies pay for lavish parties like conventions, and meetings like MACO in Ocean City.  And because larger companies are easier to deal with in structuring a "progressive" economy in a socialist state.

And that is the goal of prevailing and living wage laws.