Unions and many Democrats in the New York state Legislature are pushing for an expansion of the state’s prevailing wage law. But they are finding that the change might have some unintended consequences.
The prevailing wage rules require that all publicly funded construction projects in a region pay at least the average wage paid on all projects completed in that area.
The changes – which are in both the governor’s and the Legislature’s state budget proposals – would extend the laws to all projects that use a portion of public funds, even if the rest of the funding comes from a private source.
It’s backed by major unions, including SEIU 32 BJ, which brought workers to the Capitol for a rally.
“What do we want?” they chanted. “Prevailing wage!”
Senate sponsor Jessica Ramos spoke at another rally to support for the measure.
“There’s been a real race to the bottom in the construction industry for a very long time,” Ramos said. “Redefining what public works actually means ensures that every single worker will be paid a prevailing wage if our taxpayer dollars are subsidizing the project. That is the right thing to do.”
Sinade Wadsworth , is a member of the local carpenters union in New York City. She says the prevailing wage laws help keep her in the middle class.
“If it weren’t for a career in the trades, I’d still be on public assistance,” Wadsworth said. “I wouldn’t be able to afford my car. Not on $15 or $20 an hour.”
Contractors also spoke in favor of the bill.
But the state’s major business groups oppose the extension. Greg Biryla, with the state chapter of the National Federation of Independent Business, says the change could increase the cost of construction projects that use a portion of public money by 20 to 30 percent.
“You’re going to see fewer private sector development opportunities,” Biryla said. “You’re going to see fewer jobs.”
He says projects that take Small Business Administration loans, historic rehabilitation grants, and neighborhood improvement funding are just some of the “beneficial” programs that could be put at risk.
Supporters concede that extending the prevailing wage would add to the price tag of construction projects, but they estimate the average increase would be much lower, closer to 2 percent of total costs.
Governor Andrew Cuomo is pulling back a bit from the proposal. He’s received some pushback from public housing advocates, who worry the requirement could slow new affordable housing construction.
Cuomo, in an interview with the Brian Lehrer Show, says he would exempt public housing projects from the new rules.
Cuomo says the discussion is now centering on what percentage of public money a project would have to accept before the prevailing wage standard kicks in. He says he’s also willing to have his administration decide the specifics later.
“The dispute now is to at what threshold would prevailing wage kick in. I want to propose a compromise that if we can’t get that done we let the department of labor do, set the standards on prevailing wage,” Cuomo said. “And we get is passed that way."
Biryla, with the business group, says he’s encouraged by that, but says public hearings should be held before any new prevailing wage rules are decided.