When is Competition Not Competition?
At first glance, it looks good. Especially if you are running for Governor of Hawaii. Congressman Neil Abercrombie (D-Hawaii) took a look at the move of 8,000 U.S. Marines and 9,000 dependents from Okinawa to Guam – and glommed on to the fact that there are big contracts available for construction on Guam. The total cost of the move adds up to $15 billion! The construction industry is hurting in Hawaii, so this is a natural for a guy running for office.
Guam
Using his position on the House Armed Services Committee, Abercrombie inserted a few changes in the defense authorization bill for 2010. These require contractors for the work on Guam to advertise for and recruit U.S. workers before they can hire foreign workers; and open the door to making Guam “align” its pay scales with those on the U.S. mainland. Abercrombie says his changes put “some genuine competition back into play. This makes sure the Marines and their families can count on the quality of the housing they’ll be moving into. Feudal exploitation is on the way out.” Anybody see any problems with this?
Guam is way out there in the western Pacific and there is no way we should expect local wages to approximate those on the U.S. mainland. Japan is paying for most of the move from Okinawa (they want their island back) and thought they had a done deal. Now, Abercrombie is potentially throwing the deal open – to a new Japanese government that may want to lower its spending. And the Philippines, the likely source of much of the construction labor, is likely to lose millions in workers’ earnings. To be fair, what was passed merely requires that contractors prove that American construction workers don’t want to move to Guam. The challenge and expense of convincing hundreds or thousands of construction workers to move 3820 miles from Honolulu to Guam (or 6238 miles from Las Vegas) will be huge. The Filipinos only have to cope with 1599 miles from Manila.
Abercrombie’s rhetoric is fascinating. It’s curious how restricting competition puts “genuine competition back into play.” It must be “genuine” only if our guys win. I also don’t see Abercrombie’s beef with the quality of construction. I have seen good and bad construction all over the world (even on Guam), and paying more money for labor doesn’t guarantee good quality. Perhaps the Congressman should take a look at the specification and inspection process if he is really concerned. And is it “feudal exploitation” for Filipino construction workers to get (by their lights) good paying jobs on Guam?
Finally, what if the reverse were happening somewhere? What if some country excluded or hindered hiring U.S. construction firms and workers in favor of their own, making the same arguments that Abercrombie makes? I suspect, given his abysmal voting record on trade issues, he might be among those who advocate retaliation for treating American labor unfairly. You can’t have it both ways – except in populist politics.
Mercifully, only a watered-down version of Abercrombie’s proposals got into the bill. A good thing: the Congressional Budget Office says his original proposal would have cost the U.S. taxpayer an extra $10 billion. So he wants to run for Governor by raising taxes?
