Expands Prevailing Wage Mandate (S.1947/A.1261) | 2019
February 5th, 2019
AN ACT to amend the labor law, and the criminal procedure law, in relation to hours, wages and supplements in contracts for public work
Memorandum in Opposition
A.1261 (Bronson)
S.1947 (Ramos)
Unshackle Upstate, a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition made up of business and trade organizations from all parts of Upstate New York, opposes this legislation.
New York’s “prevailing wage” law requires contractors on public projects to pay their workers the amounts required by union collective bargaining agreements. This bill would impose public works “prevailing wage” standards on most projects receiving any level of state financial support. The bill would also classify Industrial Development Authorities (IDAs) and local development corporations as “public entities” and the projects in which they engage as “public works,” subjecting any project they support to prevailing wage laws.
If enacted, this legislation would dramatically expand the number of construction projects throughout the state subject to prevailing wage mandates, costing taxpayers billions of dollars.
Yet under “fiscal implications, the sponsor’s memo states “none.”
A recent report on the state’s existing prevailing shows that this simply cannot be accurate. The Empire Center for Public Policy has found that state and local government construction costs are inflated by between 13 to 25 percent by New York’s prevailing wage law. With the state planning to spend billions of dollars in the next few years on roads, bridges, water infrastructure and other projects, this means that taxpayers will have to spend billions of dollars beyond what these projects should cost without expanding current law.
If this bill were to be enacted, with many more projects subject to the state’s prevailing wage mandate, the cost to taxpayers will be even higher.
Typically, prevailing wages are wages set at or near the union-scale level, meaning that they do not reflect actual labor costs in a particular region. Prevailing wage mandates requires contractors on construction projects in which prevailing wages are required to pay their employees at the same rate as unionized members of the relevant occupation, even when non-union contractors could perform the same work less expensively because they are not burdened with legacy costs, which are factored in as part of the state’s prevailing wage “fringe” costs.
Rather than expand the state’s prevailing wage mandate, we urge the Department of Labor to improve the methodologies that it uses to determine and establish prevailing wage rates on public works projects The first step is undertake a statistically valid survey of the private construction sector in each of the state’s metropolitan areas to determine what share of a trade’s workers covered by a collective bargaining agreement, so that the law can be properly carried out. Further, the Department of Labor should limit the prevailing wage mandate to “wages,” and exclude costly union fringe benefits.
Unshackle Upstate has consistently opposed any expansion of the state’s prevailing wage mandates because doing so would significantly inflate government contracting costs, effectively siphoning public funds away from other priorities. The public dollars that are spent to meet the state’s prevailing wage mandates are dollars that cannot be invested in roads, bridges, water infrastructure, education, health care or other priorities.
It simply does not make sense for the state to put in place laws that force state and local taxpayers to pay more than they have for public construction projects. New Yorkers deserve government policies that maximize the use of their tax dollars.
For these reasons, Unshackle Upstate opposes the enactment of this legislation.