November 11, 2005
Price System Sighting: New Orleans Labor Market Edition

From today's NYT (via Mike DeBow):

BATON ROUGE, Nov. 4 - Burger King is offering a $6,000 signing bonus to anyone who agrees to work for a year at one of its New Orleans outlets. Rally's, a local restaurant chain, has nearly doubled its pay for new employees to $10 an hour.

On any given day, contractors and business owners pass out fliers in downtown New Orleans promising $17 to $20 an hour, plus benefits, for people willing to swing a sledgehammer or cart away stinking debris from homes and businesses devastated by Hurricane Katrina. Canal Street, once a crowded boulevard of commerce, now resembles a sparsely populated open-air job fair.

Ten weeks after Katrina, government officials and business leaders worry that a scarcity of able-bodied workers is hampering the area's recovery. In their desperation, they are using a variety of tactics to attract workers.

"I'd say I'm paying two to three times as much as I would in normal circumstances," said Iggie Perrin, the president of Southern Electronics, a supplier in New Orleans, who has offered as much as $30 an hour when seeking salvage workers on Canal Street.

This excerpt was especially interesting:

"This region is going to be going through a huge boom for the next three to five years rebuilding the coast," Mr. Bollinger said. "That's very good news for those who want work and really worrisome news for employers who have to compete with everyone else for labor."

For Mr. Bollinger, welders are just one of his labor headaches. His company pays welders $16 to $17 an hour. "When Sheetrock layers start paying $25 an hour," he said, "I'm either going to match it or I'm out of luck."

You mean workers don't need "living wage" laws to protect them from slimy employers?

Posted by E. Frank Stephenson at 11:25 PM in Economics  ·  TrackBack (0)

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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