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Obama Signs Anti-Manufacturing ‘Blacklist’ Rule

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President Obama signed an executive rule on Aug. 25 that will drive another stake through the heart of world-leading American manufacturing by requiring firms to report past labor law violations in order to qualify for federal government contracts.

The president signed the Fair Pay and Safe Workplaces executive order, which he issued two years ago. It mandates “disclosure of even minor violations that businesses or their subcontractors received in the previous three years for contracts worth more than $500,000.”

Businesses argue the new regulation will ‘blacklist’ them from doing business with the federal government.

“Now hardworking, responsible manufacturers could lose out on valuable job-creating work with the federal government for no good reason,” National Association of Manufacturers President and CEO Jay Timmons said. “This regulation is akin to a bizarre ‘guilty until proven innocent’ policy that significantly burdens manufacturers who will have to expend countless hours and resources to ensure they do not run afoul of a fundamentally unfair regulation.”

“American and Alabama manufacturing are the best in the world and this rule will only put roadblocks in front of renewed efforts to grow this critical segment of our economy,” Business Council of Alabama President and CEO William Canary added.

Federal legislators said protection is already in place to bar “bad actors” from obtaining government contracts and the new rule only adds a “new layer of bureaucracy” to the system and favors unions.

Industry groups may sue over the rule. The NAM and Associated Builders and Contractors are among those claiming “the rule ‘blacklists’ prospective firms from the procurement process.”

“Although we are still analyzing the finalized rule, it is clear that this regulation is dangerous for manufacturers,” NAM Vice President Patrick Forrest said.

The categories of violations include safety and health, wage and hour, family and medical leave, and civil rights, among others. The rule will take effect Oct. 25 and will be implemented in phases.

Bloomberg News reported that American manufacturing “still blows other nations out of the water, at least in terms of manufacturing productivity by both foreign and domestic firms, according to data compiled by the Boston Consulting Group.”

The data show that none of the 24 other countries examined is competitive with the United States. Bloomberg News said that “Brazil fares the worst, at 16 percent of the U.S. rate, while Sweden comes closest at 89 percent.” China “has barely a third the manufacturing productivity rate of the U.S.”

About Dana Beyerle

Dana Beyerle
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