|Releases: Statements on prevailing wage budget2019 negotiations from Unshackle Upstate, NFIB, AFL-CIO, Building and Construction Trades Council, Bronson and Ramos.|
FOR IMMEDIATE RELEASE:
March 26, 2019
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Unshackle Upstate and NFIB New York: No Need to Rush Costly Expansion of Prevailing Wage
Joint statement attributable to Michael Kracker, Unshackle Upstate Executive Director and Greg Biryla, NFIB New York State Director
"As leaders in Albany consider expanding the state's prevailing wage mandate, significant issues have been raised from a broad spectrum of voices including small businesses, construction leaders, housing advocates, nonprofits, and community organizations. On behalf of the employers and taxpayers we represent, NFIB in New York and Unshackle Upstate are urging leaders in Albany to reject the proposed expansion of New York's prevailing wage mandate until after the passage of this year's budget.
Given the complexity of this issue, there is no reason to force a bill through without a legitimate discussion between all stakeholders. Extending prevailing wage to private projects will jeopardize the efficacy and diminish the value of programs critical to job creation and community revitalization across New York State. Small Business Administration loans, historic rehabilitation and brownfield redevelopment efforts, NYSERDA grants, and neighborhood improvement funding are just some of the beneficial – and in many communities, essential – programs that will be put at risk.
With so much at stake, the state must get this right. There is no need to rush this complex and costly proposal before the budget deadline."
For Immediate Release: Tuesday, March 26, 2019
Joint Statement from NYS AFL-CIO President Mario Cilento and NYS Building & Construction Trades Council President James Cahill on Prevailing Rate
Albany - Restoring the constitutional requirement that the prevailing rate be paid to workers on publicly funded construction projects is a priority for the New York State Building and Construction Trades Council and has the full support of the New York State AFL-CIO.
This issue needs to be included in this year’s state budget so that taxpayers can be confident we are creating middle class jobs for New Yorkers when public funds are used.
To expedite that process, we support discussions to address affordable housing and establish reasonable thresholds for projects financed by IDAs and LDCs, or as an alternative, to allow the Department of Labor to continue to be a part of that process.
For Immediate Release:
March 25, 2019
Business/Labor Rally Highlights Economic Benefits of Prevailing Wage
Senator Ramos & Assemblymember Bronson Call for Inclusion in Budget Agreement
Albany, NY – Representatives from the construction industry, including MWBE certified business owners and local labor representatives, were joined by State Senator Jessica Ramos and Assemblyman Harry Bronson in calling for prevailing wage legislation to be include in this year’s budget. S1947(Ramos)/A1261(Bronson) would clearly define “public work” to ensure that projects receiving public funds pay prevailing wages and benefits.
The rally highlighted the important role that prevailing wage requirements play in generating economic activity and community investment. Supportive language was included in both the Senate and Assembly one-house budget resolutions and Governor Cuomo has also expressed support for prevailing wage legislation this session.
“As Chair of the NYS Senate Labor Committee, I am the proud sponsor of the Public Works Bill so we can begin to end the race to the bottom in the construction industry, said Senator Jessica Ramos. “Those working on publicly financed projects must be paid a prevailing wage. We must include the Public Works Bill in this year's budget to ensure that the people who build our state can afford to call it home.”
“For hard working men and women, the New York State Constitution makes clear that it is the public policy of New York to pay the prevailing wage to those working on state financed construction projects, ensuring that hardworking men and women earn the wages they deserve,” said Assemblymember Harry Bronson. “That policy protects taxpayer, working families and to ensure public projects meet budgetary expeditions. My legislation will remedy the present situation by adding a clear definition of "public work" and clarify the original intent of the language. Hardworking families deserve nothing less.”
“Working men and women deserve a fair wage for public work. It’s time to close the loophole that allows greedy developers to pad their profits at the public's expense,”,” said Jomo Akono, Council Representative for the Northeast Regional Council of Carpenters’ Local 276 in Buffalo.
“We are proud to be union contractors and to pay a fair wage and benefits to our workers. Our company is currently working on a prevailing wage project, and we have noticed that prevailing wage regulations have stopped the ‘race to the bottom’ mentality in order to win a project. Prevailing wage enables us to operate honestly, pay fair wages and benefits, and we don’t have to worry that we’ll lose out just because a competitor cuts corners,” said Hernan and Daniel Quinonez, owners of Summit Building Services, a registered MWBE on Long Island.
“Through hard work, dedication, and a union job, I was able to secure life changing wages and benefits that changed the course of my life for the better. If it wasn’t for earning a prevailing wage, I wouldn’t be able to own my own home, and if it weren’t for a career in the trades, I’d still be on public assistance. I want my neighbors to have access to the same opportunity I have – which is why we need to attach prevailing wages to public works projects. Public subsidies require public responsibility,” said Sinade Wadsworth, Council Representative, NYC District Council of Carpenters.
Currently, the New York Department of Labor provides a three-pronged test based on case law that takes into account the parties to a contract, the primary purpose of the project and whether the final work product will benefit the general public, or just a segment of the public. Whether or not a project is paid for with public funds is only part of the current definition and is becoming increasingly unclear in recent court decisions. This means that contractors on certain projects receiving significant public funding and/or tax subsidies have no responsibility to pay fair wages and benefits to workers.
This legislation will create a bright line test, as a project will be considered public work if: (1) The construction is paid for in whole or in part with public funds; or (2) The construction is performed in contemplation of a public entity leasing a portion of the space in the resulting development.
This would relieve the State of the great administrative burden of trying to determine whether or not various projects are public work and applicable to Article 8 of the Labor Law. Furthermore, it would grant the Department of Labor additional enforcement abilities to better ensure that public funds are used appropriately on construction.
Exemptions are provided for:
- Small-scale residential work in which the homeowner is receiving tax subsidies
- 421-a and certain other affordable housing projects
- Non-profits valued at less than $1 million
Over the past year, three peer-reviewed studies have been released by leading economists affirming the value and importance of prevailing wage laws for New York. Key findings include:
· Prevailing Wages do NOT Raise Costs: Labor costs account for only 23-24 percent of the typical costs of a construction project. Therefore, even a 10 percent increase in wage costs would account for only a 2.5 percent increase in project cost. Efficiencies used by high-paying contractors offset these wage costs and result in projects being built on time with fewer errors and change orders. Other studies with claims of dramatic cost increases are simplistic and inaccurate. Most utilize an analysis that is not accepted by peer-reviewed research in the construction industry.
· Prevailing Wage Drives Economic Development: For every $1 spent on prevailing wage jobs, $1.50 is generated for the local community. More local contractors and local workers are involved in prevailing wage projects.
· Less Fraudulent Activity: When there are not wage standards, a race-to-the-bottom approach is taken that advantages cheating and illegal employment activity. Under prevailing wage law, contractors are required to submit a certified payroll, discouraging bids from contractors that use unlawful employment practices to remain competitive.
· Apprenticeships Will Grow: Labor-Management apprenticeship programs will grow under this legislation. These programs are an alternative to college, providing a free education while paying participants a living wage, health insurance, and benefits, and giving them a path to a middle-class career. These apprenticeship programs account for the vast majority of minority and female recruitment in the construction industry as evidenced by data obtained from NYS Department of Labor.
(1) “New York’s prevailing wage law: A cost-benefit analysis.” Economic Policy Institute. Ormiston, Belman and Hinkel. (November 1, 2017)
(2) “New York State Prevailing Wage Law: Defining Public Work.” Cornell University ILR School. Fred Kotler. (March 8, 2018)
(3) “Implications of Clarifying the Definition of Public Works and Prevailing Wage Coverage in New York.” BCG Economics, LLC. Kevin Duncan, Ph.D. (March 15, 2018)