RALEIGH – There are many Democratic politicians here in North Carolina who say they are hard at work trying to help our state out of its deepest economic recession in more than a generation. Great to hear it – I’ve got an action item to put on your agenda.

Please call your compatriots in the Obama administration’s Department of Labor and demand that they put a stop to any current effort to jack up North Carolina’s Davis-Bacon wage floor. Making it more costly for firms to bid on government contracts will sock contractors hard in a down economy and raise the cost to taxpayers for completing highways, bridges, and other needed infrastructure.

Davis-Bacon is the artifact of a union power play back in the 1930s with ugly racist overtones. In short, Big Labor got Congress to pass the law as a means of keeping non-union firms – especially smaller ones and start-up companies employing blacks – from bidding government construction contracts away from organized, mostly white companies.

The official line was that Congress didn’t want the vast increase in federal spending under the New Deal to drive wages down. Well, because high unemployment rates persisted through the period, the government’s fixation with keeping wages above market levels proved to be extremely costly to workers, whom employers couldn’t afford to hire at the government-mandated wage floor. It took many years for the American economy to work its way out of this rut, which had been created not just by Davis-Bacon but by a host of other economic regulations and tax policies.

In today’s economy, raising the price of hiring construction workers would seem to be, uh, idiotic. In a recent Triangle Business Journal piece on the issue, a labor spokesman denied that raising North Carolina’s Davis-Bacon wage – through a flawed, unscientific survey process – would hurt taxpayers or workers, because the higher costs would be borne entirely by the profit margin of employers.

Uh-huh. Show me a rigorous study demonstrating such an effect. In the meantime, I’ll go with the preponderance of the evidence that those market actors with the least mobility – workers and taxpayers, in this case – typically bear the brunt of any costs that governments impose on “business.”

Although union flaks are likely immune to rational discourse, everyone else should remember some basic principles of labor economics.

First, wages are not arbitrary gifts. They are market prices for labor. They occur through a bargaining process across the market, not just the market for construction in this case but the market for labor as a whole.

Second, governments pass laws that keep wages both artificially high or artificially low, depending on the specific industries and policies involved. Wage floors, such as government-mandated minimum wages and the Davis-Bacon Act, are special-interest legislation that benefit some organized groups at the expense of (typically) less-organized groups. They raise the pay of the people whose experience and skills make them employable above the wage floor, while robbing less-experienced, less-skilled workers of income by robbing them of their jobs.

Third, persistent unemployment is almost always a creation of wage floors and other government interventions in the labor market. When you have a double-digit jobless rate, you would expect market wages to fall until the surplus labor can again be productively employed. If government keeps those wages stuck too high, the labor surplus will continue.

So, anyone out there with some pull in Washington: please tell the Obama administration not to inflict yet another wound on the North Carolina economy. Thanks in advance for your diligent work on behalf of North Carolina construction workers and taxpayers.

Hood is president of the John Locke Foundation