Tag Archive for City of Auburn

Frederic Bastiat Is Not Just the Pen Name of an Anonymous Commenter in Auburn: He’s a French Free Market Philosopher from the Mid-1800s

In response to my June 11 post reporting on the June 5 election defeat of the proposed charter in the City of Auburn, California, someone using the nom de plume Frederic Bastiat posted comments. That same name also posted comments against the charter in the Auburn Journal newspaper.

The pseudonymous commenter Bastiat believes the rejected charter was meant to “poke a sharp stick in the eye of the unions” because it allowed the City of Auburn to establish its own policies concerning government-mandated construction wage rates (commonly and deceptively referred to as “prevailing wage” rates). I responded with a facetious comment feigning surprise that M. Bastiat was still alive and noting the inconsistency of Bastiat’s historical writings to his contemporary position of opposing the proposed charter.

Bastiat then responded to me with a philosophical assertion about free market economics:

I am a ardent supporter of free markets. But we don’t have free markets in the US. We have never had free markets in the US. The idea of free markets are an intellectual construction for use by economists and scholars…in the real world of governance and polticial economy they are as real as unicorns…they simply cannot exist where man has created rules for society.

When most conservatives speak of “free markets” what they are really talking about is eliminating market externalities that benefit the working man.

For some reason, most conservatives NEVER discuss eliminating the market externalities that benefit the affluent and the powerful.

Well, these statements could be the opening paragraphs for thousands of entries on a libertarian discussion board, but this web site isn’t that kind of forum. (Labor Issues Solutions, LLC is my business, not a hobby.) But some people have told me they were intrigued by the dialogue, although they didn’t really understand it.

I see the comments from “Frederic Bastiat” as an opportunity to introduce readers to a writer popular among intellectual advocates of free markets and minimalist government.

In 1848, there was a revolution in France that deposed King Louis-Philippe and established the 2nd Republic. (Note: this was NOT the uprising depicted in Les Misérables.) The new government attempted to adopt elements of a new economic system we would today recognize as “socialism.” The most interesting description I’ve read about this government and its futile, misguided policies was written by H.L. Mencken, who in 1934 derisively compared it to President Franklin Delano Roosevelt’s New Deal. (See his column “New Deal No. 1” in A Mencken Chrestomathy: His Own Selection of His Choicest Writing” – I own this book and recommend it as an entertaining read.)  

In 1850, Frederic Bastiat, an economist and elected member of the French National Assembly, responded to this program by writing a book called La Loi (The Law), a concise philosophical treatise that asserted the policies of the republic were legalized plunder. Then he died of tuberculosis.

Bastiat writes the following in The Law:

What is law? What ought it to be? What is its domain? What are its limits? Where, in fact, does the prerogative of the legislator stop?

I have no hesitation in answering, Law is common force organized to prevent injustice; — in short, Law is Justice.

It is not true that the legislator has absolute power over our persons and property, since they pre-exist, and his work is only to secure them from injury.

It is not true that the mission of the law is to regulate our consciences, our ideas, our will, our education, our sentiments, our works, our exchanges, our gifts, our enjoyments. Its mission is to prevent the rights of one from interfering with those of another, in any one of these things.

Law, because it has force for its necessary sanction, can only have as its lawful domain the domain of force, which is justice.

And as every individual has a right to have recourse to force only in cases of lawful defense, so collective force, which is only the union of individual forces, cannot be rationally used for any other end.

The law, then, is solely the organization of individual rights, which existed before legitimate defense.

Law is justice.

So far from being able to oppress the persons of the people, or to plunder their property, even for a philanthropic end, its mission is to protect the former, and to secure to them the possession of the latter.

Obviously the governments of the United States, California, and most local governments in California today do not regard law and justice in this minimalist fashion. They conform more to the “Brain Trust” of the 1848 revolution in France.

I was first introduced to The Law in 2000 when Jon Fleischman, then executive director of the California Republican Party, gave me a copy as an award for answering a tough question during his appearance before the (once thriving, now defunct?) Young Republican Federation of Contra Costa. (Fleischman today is the editor-in-chief of www.FlashReport.org, and the California Republican Party executive director today is Brett Lowder.)

It appears that the Ludwig von Mises Institute is one of the best English-language sources of information on the web for the writings of Frederic Bastiat. It has English translations of The Law available for free on the web here and here.

(Note that writers affiliated with the Southern Poverty Law Center – a group fond of assigning labels – have insinuated that this think tank and its chairman are “Neo-Confederate,” so keep in mind that citing the Mises Institute in a paper written for a class at UC Berkeley might subject you to criticism from your professor. I quickly perused the web site and didn’t see anything like that, but the group is definitely libertarian.)

Read The Law and see if you agree with it.

Costa Mesa City Council Gets Email from the Center of the Great Quest to Free California’s Fiscally Responsible Local Governments from Centralized State Government Excesses and Mandates

From: Kevin Dayton, Labor Issues Solutions, LLC

Subject: Costa Mesa City Council: Suggestion for Formal Pro and Con Presentations on Provisions of Proposed Charter

Date: June 12, 2012 7:21:34 PM PDT

To: Righeimer@costamesaca.gov, Eric.Bever@costamesaca.gov, Stephen.Mensinger@costamesaca.gov, Gary.Monahan@costamesaca.gov, Wendy.Leece@costamesaca.gov

Cc: CityManager@costamesaca.gov

Costa Mesa City Council members:

Greetings!

As someone identified by “Costa Mesans for Responsible Government” (see here) as the Center of the Great Quest to Free California’s Fiscally Responsible Local Governments from Centralized State Government Excesses and Mandates, I am writing to you about your proposed charter.

[Councilwoman Leece, I’m sending this to the (Orange County) Register and (Newport Beach/Costa Mesa Daily) Pilot, so “WOW, you won’t all need to continue to write letters to the Register and Pilot to expose this statewide scheme.”]

I saw that your first informational hearing on June 5 on a proposed charter for the City of Costa Mesa was – according to the Orange County Register – marred by “much of the same conflicts and arguments that plagued the first hearing process.”

Obviously your proposed charter is meaningful public policy – otherwise everyone would be praising it unanimously as if it were a resolution for Take Your Dog to Work Day. (That’s June 22 if you want to put that on your June 19 meeting agenda to bring peace, harmony, and unity to the community.)

I watched the video, and I saw some members of the public asking for thoughtful changes in a civil manner. Others are absolutely intent on maintaining the power of centralized government in Sacramento.

But I noticed that yet again there was a lack of informed public discussion regarding the actual statutory and regulatory aspects of state-mandated construction wage rates and the state’s expansive definition of public works. How does the state calculate construction wage rates? Why does the definition of “public works” apply to so many private projects?

It needs to be emphasized that under Section 401 of your proposed charter, the city council will have the power to evaluate the benefits and liabilities of each provision of the following California Labor Code sections and determine their relevance to Costa Mesa municipal construction:

PART 7. PUBLIC WORKS AND PUBLIC AGENCIES

CHAPTER 1. PUBLIC WORKS

Article 1. Scope and Operation …………………………. 1720-1743
Article 1.5. Right of Action ……………………………… 1750
Article 2. Wages ……………………………………… 1770-1781

I propose a formal set of presentations at your next informational hearing to discuss various aspects of the charter. I would be interested in speaking about why it is reasonable to question the city’s current absolute subservience as a general law city to California Labor Code Sections 1720-1781 and related regulations.

Just one example: what is so wrong with the city being able to set a project cost threshold of $1 million for government-mandated construction wage rates on purely municipal projects, instead of the $1000 set by the state in 1931 that persists today? As a charter city, you could set your own project cost threshold for city projects.

I suggest inviting top representatives of the State Building and Construction Trades Council of California to speak about why the city needs to remain firmly under the authority of the benevolent and enlightened California State Legislature. Perhaps they can explain the section of their brief submitted to the California Supreme Court on State Building and Construction Trades Council of California v. City of Vista that claims charter cities must abide by state-mandated construction wage rates (“prevailing wages”) because “construction workers today routinely commute to projects outside the cities in which they happen to live” and “it is not uncommon for today’s construction workers to commute more than 100 miles to work at a job site.”

By the way, here’s my report on the defeat of the proposed charter in the City of Auburn in the June 5 election:

Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? (Answer: Three Union Entities, by Spending $56.40 Per NO Vote

Also, please let me know if there are any upcoming community forums where the charter will be debated (chamber of commerce, etc.).

In the meantime, congratulations on the initiative of four of you to seek meaningful local control over municipal affairs that could bring relief for middle class taxpayers and small businesses that are interested in fiscal responsibility and freedom from costly state mandates.

Kevin Dayton
President and CEO
Labor Issues Solutions, LLC

California taxpayers and small business owners: it’s bad out there! See my blog postings about generally unreported California state and local policy issues at www.laborissuessolutions.com

P.S.  Have you seen where various organizations and publications rank California nowadays among the 50 states for business climates and regulatory and tax burdens? Yes, there is a problem!

Who Defeated the City of Auburn’s Proposed Charter, and How Was It Done? (Answer: Three Union Entities, by Spending $56.40 Per NO Vote)

Tonight I spoke during public comment at the Auburn City Council meeting to encourage the five city council members after last week’s defeat of Measure A, a proposed charter for the City of Auburn. I’m sure it was frustrating for them to see 65% of city voters reject an ordinary, reasonable proposal to shift government authority from the state to the local level.

Measure A lost on a vote of 1409 to 748 in the June 5, 2012 election.

As I mentioned in an earlier post, construction unions derailed the proposed charter for the City of Auburn using the same methodology used to defeat the proposed charter for the City of Rancho Palos Verdes in an election on March 8, 2011. In both cases, professional, experienced, and well-funded regional union political operations overwhelmed a local grassroots movement. (In Rancho Palos Verdes, 69% of voters rejected the charter after the unions flooded the city’s voters with deceptive mailers.)

The campaign in support of Measure A scraped together $8,671.00, mostly in small contributions from Auburn residents and local businesses. They spent $2,200 on advertising in the Auburn Journal newspaper and printed some flyers and campaign signs. Nothing unusual for a local campaign in a city with a total population of 13,300.

Meanwhile, as seen in this campaign finance report and this campaign finance report, three union entities contributed a total of $75,000 (plus $4,463.83 in non-monetary contributions) to the campaign opposing Measure A, as a result spending $56.40 per NO vote to defeat the proposed charter. The ratio of union spending (in opposition to Measure A) to local spending (in support of Measure A) was 9 to 1.

The steamrolling was so bad in Auburn that the union opponents of the proposed charter spent more than twice as much on legal/accounting services ($17,618.20 billed by Olson, Hagel & Fishburn LLP) than the local Measure A supporters raised for their entire campaign ($8,671.00).

There were only three donations to the campaign against Measure A, which would have enacted a charter that included provisions allowing the city to establish its own government-mandated construction wage rates (“prevailing wages”) for municipal construction and permanently exempt the city from potential state requirements that volunteer labor be paid at state-mandated wage rates.

Here is an analysis of the three contributions to “Preserve Auburn, No on Measure A, sponsored by California Alliance for Jobs” campaign:

1. $25,000 from the International Union of Operating Engineers Local No. 3, which represents union workers who operate equipment such as excavators and cranes in Northern California.

This contribution appears to come from the union’s general fund. (It is classified in the campaign finance report as “Other” and not as a political committee.) According to its Form LM-2 for 2011 filed with the U.S. Department of Labor’s Office of Labor Management Standards, the multi-state Operating Engineers Local No. 3 had total receipts in 2011 of $41,851,469. It spent $630,837 on political activities and lobbying. This union spent more than twice as much in 2011 at Give Something Back Office Supplies ($62,285) than it did against Measure A in 2012.

So what is the typical state-mandated wage rate for an operating engineer in Auburn? The state sets the wage package for a bulldozer driver in the City of Auburn (Group 4, Area 1) at a straight time total rate of $62.00 per hour$37.15 + $24.12 in fringe benefits + $0.73 for “Other.”

2. $25,000 from the Northern California Carpenters Regional Council Issues Political Action Committee (PAC). (The Carpenters also reported $4,463.83 in web site development expenditures against Measure A.)

According to its latest Form 460 filed with the California Secretary of State, this PAC started the year with $223,739.45 and collected another $72,340.12 in 2012, up to May 19. It had money to burn for a campaign in Auburn.

So what is the typical state-mandated wage rate for a carpenter in Auburn? The state sets the wage package for a basic carpenter in the City of Auburn (Area 3) at a straight time total rate of $56.60 per hour$31.62 + $22.69 in fringe benefits + $2.29 for “Other.”

3. $25,000 from the California Alliance for Jobs, an example of an arcane type of union trust authorized by the obscure Labor-Management Cooperation Act of 1978, a law signed by President Jimmy Carter and implemented by the Federal Mediation and Conciliation Service.

Inspired by the decline of unionized manufacturing in the Northeast, this federal law was meant to help industrial management and union officials build better personal relationships and cooperate against the threat of outside competition. There are no federal or state regulations specifically addressed toward these trusts, and these trusts do not have any reporting requirements to the U.S. Department of Labor’s Office of Labor-Management Standards. (Another example of this kind of trust is the California Construction Industry Labor-Management Cooperative Trust, explained in my past blog posts here and here.)

Collective bargaining agreements for the Laborers and the Operating Engineers in Northern California include mandatory employer payments to the California Alliance for Jobs trust based on hours worked by trade workers represented by those unions. Those payments are incorporated into the state’s construction wage rates (“prevailing wages”) in the Other component established in 2003 through Senate Bill 868 (signed into law in 2003 by soon-to-be-recalled Governor Gray Davis) as California Labor Code Section 1773.1(a)(7-9).

The latest available IRS Form 990 for the California Alliance for Jobs (for 2010) indicates expenses of $2,391,938, including $685,000 in lobbying and political expenditures. So $25,000 sent to a campaign in the City of Auburn is peanuts to this group.

As a major participant in the California Alliance for Jobs, the Northern California District Council of Laborers must be included as the third construction trade union that opposed Measure A.

So what is the typical state-mandated wage rate for a laborer in Auburn? The state sets the wage package for someone holding a stop/slow sign at a road site in the City of Auburn (Group 3, Area 2) at a straight time total rate of $42.93 per hour$25.89 + $16.91 in fringe benefits + $0.13 for “Other.”

Perhaps these wage rates accurately reflect the true prevailing wage rates in Auburn, and Auburn taxpayers are getting their money’s worth when they pay for purely municipal construction performed under these rates. Perhaps it is reasonable to require businesses to make their contractors pay these rates on private construction projects that receive any sort of city financial assistance.

But shouldn’t that be a decision for the Auburn City Council, rather than the California State Legislature and the Division of Labor Statistics and Research (DLSR) in San Francisco?

Tonight I urged the Auburn City Council to prepare another proposed charter, and this time don’t make it typical, ordinary, and reasonable. Develop a manifesto of local control against the power of the state government and the special interests that control it. Offend every group in Sacramento. And then bring it before the voters of Auburn.

I don’t think the people of Auburn will be fooled again, especially if the supporters of the charter abandon the low-key grassroots operation and fight fire with fire in Round Two.

On June 5, 2012, Voters in City of Auburn Will Consider Proposed Charter with Local Control Over Government-Mandated Construction Wage Rates

Voters in the City of Auburn will decide tomorrow (June 5, 2012) if they want to enact a proposed charter giving the city authority over municipal affairs.

The central point of contention in this proposal is, as usual, related to labor unions. Section 303 of the charter states the following:

No City contract shall require payment of the prevailing wage schedule unless:

(i) the prevailing wage is legally required, and constitutionally permitted, to be imposed;

(ii) required by federal or state grants pursuant to federal or state law;

(iii) the city council does not consider the project to be a municipal affair; or

(iv) payment of the prevailing wage schedule is authorized by resolution of the City Council.

Payment of the prevailing wage schedule, if authorized hereunder, shall use the pertinent rates established by the State of California.

In other words, the City of Auburn would be able to set its own policies concerning government-mandated construction wage rates to be paid to workers by contractors on purely municipal projects. Unions hate this kind of local control! They want the California State Legislature to set the prevailing wage laws and the California Department of Industrial Relations in San Francisco to promulgate regulations and set the rates based on union collective bargaining agreements.

Unions have also been provoked into a tizzy by the proposed charter’s Section 305, which states that “The City seeks to support volunteers in creating a higher quality of life for Auburn citizens and as such declares itself exempt from any state laws or regulations that would make it more difficult or expensive for volunteers to participate in any community project, whether funded with City revenues or not.”

This provision, of course, is meant to protect the city from union claims that volunteer work is supposed to be done by city employees, or that the state classifies certain work done by volunteers as subject to government-mandated prevailing wage rates.

According to an article in the May 27, 2012 Auburn Journal newspaper, “Auburn Advocates for Local Control – ‘Yes’ on Measure A” collected $7,671, mainly from Auburn residents, while “Preserve Auburn – ‘No’ on Measure A” collected $79,463.83, mainly from Northern California union organizations.

The charter was placed on the ballot by a 5-0 vote of the city council.

The situation seems similar to the charter placed on the March 8, 2011 ballot by the Rancho Palos Verdes City Council. The Yes campaign was a grassroots movement, locally funded and managed, while Los Angeles construction unions overwhelmed charter supporters with large amounts spent on mailers and other political tactics.

Voters solidly rejected that charter with 69% of the vote. Will Auburn voters be swayed by the unions?