Wednesday, July 1, 2015

Why the "local hire" amendment is a bad idea.

When presented with the opportunity to sign the petition to put the 'local hire' amendment on the August ballot, I declined.  I thought it was a bad idea at the time and I now think it is even a worst idea. It sounds good: What it would do is require than any Metro project valued at over $100,000 would have to have a work force made up of 40% local people.

I logically knew and intuitively knew this was a bad idea and that protectionism and "buy Local" programs seldom deliver the results they promise. Now, Ralph Schultz, President of the Chamber of Commerce has giving us specific reasons why it is a bad idea.

Writing in The Tennessean yesterday, Schultz pointed out that there is a labor shortage in Nashville. More than half of all current Nashville workers reside outside of Davidson County. A chamber report called "vital signs" published in 2014 projects a shortage of nearly 18,000 workers in Nashville by next year and a 35,000 worker shortage by 2021 unless steps are taken to change that.

While Schultz does not say it; I will.  It is possible to have a labor shortage and unemployed people at the same time. There  are people who dropped out of high school, have criminal records, have no skills, and do not have an aptitude for work.  There are people that are not qualified to do the jobs that need doing. Some people are not only not worth the minimum wage, some people have a negative work value- you would rather them not work for you even it they worked for free.

One thing that makes the "local hire" bill even worst than I originally thought it to be is that it cannot apply to out-of-state contractors. That is stated in Schultz's article but not explained. The reason "local hire" laws cannot apply to out of state contractors is due to the Privileges and Immunities Clause in Article IV of the US Constitution. This clause says, "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." That means we cannot say that a job must be filed by someone from Tennessee. The effect of this is that if the amendment passes we could refuse to hire people from Mt. Juliet or Watertown or Fairview or Springhill but not people from New Jersey or Michigan.

Schultz also points out that if the charter amendment passes, it will require painstaking calculations on the part of contractors and construction delays and will lead to drastic increases in the cost of projects. In another article on the topic, someone pointed out that this amendment could force companies to hire unqualified people to work on their jobs which could present a safety issue.  Someone I spoke to about this said that in order to meet the 40% requirement that companies would simply hire "bodies" to fill the quota, thus drastically driving up the labor cost of tax-payer funded construction projects.

Amendment 3, the "local hire" amendment, needs to be defeated.

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