How about Free Trade in Construction?

Free trade works. If you don’t believe it, John Stossel’s most recent show explained its benefits nicely.

In fact, one of the greatest (under-appreciated) achievements of the US Constitution was that it set up a free trade area in the US that now contains a total of 50 states. Unfortunately, in Construction, as I read in today’s Albuquerque Journal, there is a web of preferences (barriers to free trade) that has been erected in order to improve the prospects of supposedly New Mexico-based construction companies in receiving public construction projects in the state. Other states have similar laws.

The reason for all the coverage in today’s paper is that New Mexico’s law is too easy to circumvent and that out-of-state construction companies are winnning projects and taking business away from New Mexico-firms. Sen. Tim Keller wants to strengthen New Mexico’s laws to more strongly favor New Mexico companies.

I don’t get it. In-state favoritism is bad policy and New Mexico, rather than attempting to further favor in-state contractors, should work with other states to abolish these bad laws. After all, it is ultimately taxpayers that lose out from this kind of trade war. If an out-of-state company can do the job better and/or cheaper (thus winning the firm the project), we’d be foolish not to hire them to do the job. As for New Mexico-based construction workers, it would seem that even out-of-state companies doing projects here would want to hire local workers rather than bearing the costs of importing out-of-state workers.