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Are you a private business or a government surrogate?

April 7, 2014

On Tuesday, President Obama is set to sign yet another executive order requiring employers who are government contractors to suspend or drop all disciplinary actions against workers discussing their wages with other employees. And another one mandating reporting of wages by race and gender.

This may not sound like a big deal. In spite of the fact that almost all employers have some restriction against the practice, employees talk to each other. If someone gets a raise, they usually tell somebody about it. Why all the fuss now? Doesn’t this just legitimize a practice that’s been going on forever?

In fact, why would employers have such a rule anyway?  Well, for one thing, wages are part of an employee’s personnel file, and that file is supposed to be private between the employee and the employer. Employers also think they should have the right to reward employees as separate human beings. For instance, if one employee gets advanced education in his/her field, or acquires a new skill,  employers derive more value from their work. A common way to reward an employee for that  is by raising their wage.

Of course, favoritism, nepotism and a whole host of other -isms can result in one employee being favored unfairly over another. The alternative is that everyone makes the same wage, regardless of effort or ability, and that seems to be what’s behind this latest executive order, as well as the one requiring federal contractors to start reporting their wages by race and gender. Interesting, considering that even the feds don’t pay men and women equally within the same job classification.

There are already numerous laws on the books that govern and control wages. There are volumes of laws on fairness to people of all races and genders. In most cases they are useless to the employees, since filing a claim under one of them can take years to wind its way through the courts. If the government was really for fair and equal treatment it wouldn’t take an army of lawyers and boxcar loads of paperwork to make it happen. It’s unlikely that these executive orders will change that.

This seems to be more about the finalizing the takeover of all American businesses by the Federal government than income equality. Most businesses today  run their operations first to avoid running afoul of some regulation, and only after trying to be sure they aren’t doing something illegal can they focus on their core business model. There is a reason why large corporations have whole legal firms on retainer, or have an in-house legal department. That’s all money that doesn’t go toward better wages for everyone else.

Since the government is the source of billions of dollars in contracts, these firms are probably just going to roll their eyes and add these two new laws, er, executive orders to the stack of things the legal and accounting departments have to monitor. Why bite the hand that throws the slop in the trough?

When the President said you didn’t build your business he absolutely meant and believes  it. To him, the government is responsible for you being in business, so the government has the right to tell you how, when, where and if you can operate.

Like a lot of other things, fairness in wages is a good goal if it relates to a truly apples to apples comparison. Unfortunately, people aren’t apples. They differ in ability, attitude, and economic output  in ways that that gave rise to a tiered wage system. Even governments have wage brackets within job classifications. But then, the government seldom considers itself part of the system. When the government pays every clerk in every department the exact same wage, then they can talk about income equality.

While Federal law for non-government businesses (the FLSA) specifically states that employers do not have to provide most paid benefits other than overtime differentials, the same is not true for government service contractors, as shown on their web page.  That wage and hour explanation specifically states that you must provide fringe benefits commensurate with the prevailing standards in your area.

It’s unclear how they manage to have effective oversight of that, given that they don’t keep records, but hey, it’s the government so everything’s OK. What’s six  billion dollars between friends?

At least in the case of businesses that exist on government contracts, it might be time to admit that de facto government ownership of the business sector has happened, and learn to live with it. Your company is not and has not been for a long time, an independent entity. Apparently business owners and the general public must like things that way, since we keep voting for the people who make government management of business happen.

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