SACRAMENTO, CA -- Market competition and free enterprise may be the basis for the great economic prosperity that California and the nation are experiencing, but that’s not the message one gets from the actions coming out of Sacra-mento. Governor Gray Davis and the Democratic legislature are busily turning back the clock as they rush to meet the anti-competitive demands of their Big Labor allies.

Take, for example, privatization. As a number of nations have discovered, many government services can
be performed better and cheaper by the private sector. Under Governor Pete Wilson, California made significant
strides to privatize a variety of government services. To reverse this trend, the state employee unions poured
huge sums into the gubernatorial campaign of Gray Davis. Those campaign bucks are now paying off
handsomely.

In a giant step backward, rubber-stamped by the Democratic legislature, Davis has decided to replace
privately contracted janitorial workers, who clean state buildings, with full-time unionized state employees, at approximately double the cost. As the Los Angeles Times pointedly observed: "Still, the shift away from private janitorial services is one example of how the Democratic governor, who won office with a major assist from organized labor, wants to use the budget to help his political allies. The Service Employees International Union and its affiliate, the California State Employees Association, which represents the janitors, gave Davis’ campaign at least $1.4 million in direct and indirect contributions last year."

The Davis administration matched this regressive, anti-competitive payback with lame statements explaining the governor’s move. Davis’ spokesman Michael Bustamante says that fairness is the issue. "Workers should be treated fairly, workers are entitled to fair wages, and workers are entitled to fair benefits," he said. Bustamante obviously needs a refresher course in basic economics.

The private-sector janitors were willing to work for lower wages than those paid to state janitors ($8.94/hour starting salary versus $9.31/hour), but that does not mean that the private janitors were being exploited. The supply of labor available to fill the private janitorial jobs and the demand for that labor exhibited by the janitorial companies combined to determine the market wage for a janitor. If companies tried to pay less than that wage, they would get both fewer and lower quality job applicants. However, enough quality workers did take the private janitorial jobs, which shows that a fair market wage was being paid.

Contrast the fair, objective, market-determined wage with the Davis-Bustamante definition of "fairness."
Under their plan, wages are determined under monopoly conditions. Unions negotiate with government to set
wages without any pressure exerted by competing suppliers of labor and, therefore, backroom political
considerations outweigh fiscal considerations. To whom is this situation fair?

Certainly not to California taxpayers who are asked to cough up more of their hard-earned income simply to
satisfy the political debts of Sacramento’s new Tammany bosses. Nor is Davis’ move fair to private contractors
and their employees.

"We are always looking for ways to save our customers money," said the manager of one of the private
janitorial companies. "[The state] didn’t even allow us to bid."

Welcome to the new California.

-- Lance Izumi