Perfect Example of Government Doublespeak

An Obama Administration executive order / regulation (hard to tell the difference any more)

Department of Labor
29 CFR Part 10
Establishing a Minimum Wage for Contractors; Proposed Rule

34568 Federal Register / Vol. 79, No. 116 / Tuesday, June 17, 2014 / Proposed Rules

This document proposes regulations to implement Executive Order13658, Establishing a Minimum Wage for Contractors, which was signed by President Barack Obama on February 12, 2014.

The Executive Order therefore seeks to increase efficiency and cost savings in the work performed by parties that contract with the Federal Government by raising the hourly minimum wage paid by those contractors to workers performing on covered Federal contracts to: $10.10 per hour, beginning January 1, 2015; and beginning January 1, 2016, and annually thereafter, an amount determined by the Secretary of Labor.

Liberal and leftish economists in the audience, please explain the line in bold.

The administration wants to apply this to concessionaires as well.  This will force us to raise a $20 camping rate by $4 a night.

  • Matthew Slyfield

    This isn't doublespeak, it's more along the lines of doublethink.

    If you pay the peons more they will work harder and productivity will go up.

  • wintercow20

    And there will supposedly be lower turnover costs - because obviously that wouldn't be a consideration of employers to begin with, they only care about minimizing one cost and that is wages, at the expense of all other costs.

  • randian

    Employers are too stupid to function without the helping hand of government.

  • Harry

    Evidently Valerie Jarrett thinks campground prices are elastic enough to pass on a twenty percent price increase without having to scrimp on the inelastic toilet paper and other amenities provided at the campground slit trench. I got a chuckle out of the precision of $10.10 per hour; $10.99 would have been more generous, and Coyote can afford it.

  • sch

    Kind of reminds you of the "Paper work reduction" built into government requirements.

  • marque2

    Actually in a bizarre sort of way productivity of the average employee does increase - you just don't have the same set of workers. Those that can provide an $11 value will be kept around, those that can't will be laid off and or other more productive workers may replace them (assuming workforce isn't reduced)

    So yes, when paid $11 you generally get around $11 from workers and when paying $7 you get $7 so if you came to a place that switched suddenly to a higher salary, yes one year later, with different workers your company will be more productive.

    Of course the less productive workers are now sitting at home watching Judge Judy instead of making an honest wage.

  • Not Sure

    "This will force us to raise a $20 camping rate by $4 a night."

    The government will be the good guy for giving workers more money and you'll be the bad guy for raising fees. In other words, a win-win for the government.

  • me

    Oh, this one's easy: "I am making up a bullshit explanation because I can". Give an administration too much power, this is what you get (speaking as a Liberal, ie someone who espouses a political philosophy based on the ideas of freedom and equality, in this particular case freedom from undue interference by our dearest overlords and equality, specifically not having a host of class-generating laws like, say, minimum wages applying to some but not all (a minimum wage applied liberally and equally would effectively end up being a zero-sum change))

  • me

    Actually, "We will raise the $20 camping rate by $4 a night for your convenience" ;)

  • me

    Actually, we do just the same in big corps (irrational behavior more akin to communism than free market principles).

    http://www.overcomingbias.com/2014/07/firm-inefficiency.html

  • fantasticrice

    While we’re at it, why not $100 per hour? Socialists never seem to be able to answer that.

  • jdgalt

    Why have Congress at all? Why not just change Obama's title to generalissimo?

    But first he'll need to stage an excuse, a "Reichstag fire." I expect one any day now.

  • Matthew Slyfield

    What turn over? The people pushing for minimum wage increases don't believe in turn over.

  • Matthew Slyfield

    Because while they won't acknowledge it publicly, they do understand that eventually, you run out of OPM (other people's money).

  • Matthew Slyfield

    "But first he'll need to stage an excuse, a "Reichstag fire." I expect one any day now."

    That won't happen. In order for that to succeed he would need the support of the military. If you think that he would get the support of even a significant fraction of our military forces, please share whatever it is you have been smoking.

  • Curits

    Oh honestly! It's not even a law! It's a proposed regulation from some dingbat bureaucrat! Ignore it!!!! Do what the administration and Congress do and just obey the laws/regulations you feel like. They seem to think that's legal and one of them is the Attorney General. Just follow his sterling example and I'm sure you'll be OK.

    in the gulag.

  • Dave Boz

    The number only needs to be high enough to make The Proclaimer feel good about himself. In this instance, a number in the double-digits made him feel good. If it takes three digits to make him feel good about himself, then it will be $100.

  • Mole1

    " please explain the line in bold."
    That's easy. More-competent workers are underpaid compared to the value they deliver, and less-competent workers are overpaid. Therefore, when you offer higher salaries you get a productivity boost that more than compensates for the extra salary.

  • morgan.c.frank

    mathew-

    and what was stopping them from doing that before?

    if there were already workers who would yield higher productivity per dollar spent, why do you need a law to act in self interest?

    there was no maximum wage.

  • Matthew Slyfield

    You are right of course, but the people who support increasing the minimum wage seem to be incapable of comprehending that.

  • morgan.c.frank

    1. that is pure supposition

    2. if such workers are available and provide more bang for the buck, there is already incentive to hire them, and you do not need a law.

    3 it presumes that a distant federal bureaucrat is better positioned to tell if such workers exist and to mandate their hiring than the folks actually on the scene.

    4. it presumes that the same wage is optimal on every contract in terms of procuring productivity per dollar, which is absurd.

    so, this can pretty much only result in a good outcome by dumb luck, and even then, there is no reason to think it would apply equally to all cases.

    to believe this, you have to believe that those involved with a project are too dumb to hire the optimal workers on a price performance basis, and that a bureaucrat who has ZERO familiarity with the situation can, by dumb luck, do better, and that this same dumb luck will work in heterogeneous situation.

    what this really is is a sop to unions. it stops people from underbidding them.

    this is about lowering productivity and shunting money to donors, not increasing productivity.

  • old dude

    Minimum wages are to insure that low skilled workers remain unemployed and so therefore likely to vote for bigger government.
    As for the $100 rate. How many voters would still want big government when they saw $3,200 in taxes taken out of every paycheck? Assuming paid twice a month.

  • Max Lybbert

    I doubt it's the goal of the law, but it is well known that if labor costs go up, companies try to substitute other things for labor. For instance, if it's expensive to have bank tellers, you might replace them with ATMs ( http://www.realclearpolitics.com/video/2011/06/14/obama_atms_contribute_to_unemployment_for_eliminating_tellers.html ).

    Of course, the former tellers are usually able to get jobs elsewhere, so it doesn't raise unemployment, but it does make individual banks more efficient.

  • http://itsaboutliberty.com/index.php MNHawk

    "Liberal and leftish economists in the audience, please explain the line in bold."

    You'd be better served putting out feelers for the losers that could only handle Poli Sci. They would be the ones to explain that.

  • Max Lybbert

    Replace the person in the gatehouse with a kiosk, your convenience stores with vending machines, and at least half your service people with information kiosks. If you don't care about renewing your government contracts, give media interviews about how rising labor costs pushed you to be so efficient. If you do care about getting your contracts renewed, give media interviews about your low carbon emissions.

  • herdgadfly

    So - how does the government know what rates that you pay for campground help? Do the government agencies publish required pay rates and permitted rental rates for campers?

    Like all low information voters, contractors should not over-think their obligations to the government rulers and to the public. If a 20% raise in rental fees is permissible, why not make it $25? And if the rate were $30 would you need as many attendants?

  • Mole1

    1: No, economists say so.
    2 and 3: It is well-established that the people in Washington are pretty smart, otherwise they wouldn't have been able to get where they are. They get the advice of the very best economists.
    4: No, it doesn't. They recognize that the productivity benefit will not be the same for all contracts. All that matters is that the net productivity gain across all contracts is positive.

  • Nehemiah

    So sad. Do you really believe what you've written?
    1. Economists like Paul Krugman, the recently terminated Princeton Prof?
    2. Don't confuse deviousness for intelligence. Someone willing to deceive can go a long way in Washington DC (Harry Reid). And would those very best economists include Paul Krugman?
    4. Do you really believe that the government is capable of optimizing the performance/compensation models of everything from construction contractors to food service vendors? A business person trying to meet customer requirements and a payroll at the same time is the best arbiter of this issue. It would be great if we could give the free market a try.

  • Mole1

    1. Someone killed Paul Krugman? That is really terrible.
    2. No, no, it is impossible to deceive so many Americans that you win a presidential election. Voters are capable of sussing this out, which is why we have better politicians than the rest of the world. Sure, Paul Krugman is one of the best economists. He has a Nobel Prize, doesn't he?
    4. The government doesn't need to optimize on a business-by-business basis. If the rule results in a net benefit, it is an improvement over the status quo. I'm sure it will be tweaked in the future to improve efficiency even more, as the president learns the intricacies of each of the relevant contracts and their particular optimum salary levels.

  • Nehemiah

    1. Krugman resigned from Princeton in quiet disgrace - http://www.forbes.com/sites/ralphbenko/2014/07/14/is-paul-krugman-leaving-princeton-in-quiet-disgrace/
    And Obama has a Nobel peace prize, so what. Have you watched the news lately? Bet they'd like to pull that one back.
    2. Obama is president today because, if you like your health insurance, you can keep your health insurance and if you like your doctor, you can keep your doctor. And it didn't hurt to have friends in the IRS put a lid on rivals. We have better politicians that the rest of the world? Say what?

    4. Our president will take the time to learn the intricacies of relevant contracts??? Just like he took the time to manage the intricacies of healthcare.gov? He is the master of the intricate workings of government.

  • Mole1

    1. Looks to me like Krugman got a better offer from CUNY than Princeton. Isn't that the free market at work? And, there are lots of countries that Obama hasn't gone to war with. Not-war is peace.
    2. Clearly we have better politicians than the rest of the world. We have the strongest GDP per capita by far, the most freedom, and the most security. This clearly came from our government's good stewardship of the nation.
    4. The president's tweaking of the intricacies of the health insurance overhaul as they unfolded is a good example of his ability to understand complicated systems and adjust them so they perform optimally.

  • morgan.c.frank

    mole-

    1., no, they don't. if you think that they do, you are an economic illiterate.

    2-3: oh, my god. can you seriously believe that? they are not that smart, and it would not matter if they were. they have no knowledge of the specific situation. einstein was VERY smart. would he have any iode how to maximize, 2 years from now, the labor inputs on a plumbing project in a place he has never been? seriously, what color is the sky on your world?

    4. then you are deeply deluded. maximizing productivity on EACH contract will always lead to a higher level of productivity that using one size fits all. sure, there may be one price that, if you have to pick one is optimal (assuming you could figure out what it is) but it will underperfom price flexibility.

    if you take you and 99 friends, and average your shoe sizes (or take the median, or the mode) we could buy shoes of all that one size and it would be the best one size for you all to wear. are you seriously trying to argue you would not be better off if you all just bought shoes that fit you individually?

    you then try to refute nehemiah using pure logical fallacy.

    appeal to authority is not a valid argument.

    you also are making up loads of facts (we do not have the highest gdp per capita, using CIA estimates we are number 10), we do not have the most freedom, nor the most security.

    but, even if we did, it would still not prove that these policies are good, just less bad than others. you can hit the brake, and still roll your car forward if it is on a hill. this does not prove brakes make you go forward.

    you seems to have some serious difficulties with basic logical structure and factual narrative.

    you pretty much just take a position and make up facts and emotional arguments to support it, huh?

    this surreal howler really gives you away:

    " The president's tweaking of the intricacies of the health insurance
    overhaul as they unfolded is a good example of his ability to understand
    complicated systems and adjust them so they perform optimally."

    i mean, you have GOT to be kidding. you are using obamacare as an optimization success story? that is absurd to the point of madness.

  • http://devilish-details.blogspot.com/ mesaeconoguy

    Yes, but how much do you collect from unicorn shit disposal?

  • http://devilish-details.blogspot.com/ mesaeconoguy

    So far, only 1 [pathetically weak] taker on the explanation challenge above.

    However, Nehemiah has provided invaluable news that Krugshit is leaving Princeton.

    Coyote, could you do an alumni reaction piece on that?

  • Arrian

    Remember that contracts are bid on. So higher wage rates will lead to higher bids and a lower likelihood of winning the contract.

    But, that gets back to the "efficiency" argument. If higher wages were balanced out by increased efficiency, then the bids would be lower.

    Oh dear, that doesn't sound quite right.

    We can still save it! Higher wages _can_ lead to higher efficiency, but that efficiency increase doesn't necessarily lead to lower overall costs: The gains from efficiency might not outweigh the costs of higher wages. (Decreasing marginal returns, marginal revenue product of labor, and other economic bizzwords, you know!) So, the line can be _technically_ true, just meaningless.

    There, done!

  • Canvasback

    And for your safety and comfort.