NYS BUILDING & CONSTRUCTION TRADES COUNCIL
FOR IMMEDIATE RELEASE:
March 12, 2018
Cornell School of Industrial and Labor Relations Report:
“NY has an opportunity to promote responsible economic
development by broadening scope of prevailing wage law
so that ‘public work’ includes all publicly-assisted projects”
NYS Building & Construction Trades Council Calls on Legislature,
Governor to Close the Prevailing Wage Loophole in State Budget
A new, independent study, “New York State Prevailing Wage Law: Defining Public Work,” released today by Cornell University’s School of Industrial and Labor Relations, concludes: “Expanding the scope of New York’s prevailing wage law to encompass the current forms and scale of public investment would align the founder’s original intent with present-day realities and broaden New York’s overall economic development strategy.”
New York State Building & Construction Trades Council President James Cahill said, “This new independent study clearly demonstrates the need to close the prevailing wage loophole once and for all and ensure that all construction projects in New York that receive taxpayer resources pay fair wages and support local contractors and tradespeople. We congratulate the Senate for seeking an independent review of the benefits to be gained by requiring the prevailing wage on all projects that receive government subsidies or assistance.”
Cahill said the loophole that needs to be closed is the absence of a definition of “public work” in the labor law and State Constitution. The “public work” designation is what triggers the prevailing wage requirement.
“Without a definition, there is no clear standard as to when the prevailing wage law applies. In the end, the courts end up deciding, and they’ve created quite a mess, a very complicated formula, that is inconsistent with the intent of the law,” Cahill said.
The Council, which represents more than 200,000 New York tradespeople from Niagara Falls to Montauk, is asking the Legislature and Governor to ensure that the 2018-19 State Budget include language that defines ‘public work’ to include all construction projects that receive taxpayer resources.
The Cornell ILR study notes, “Sixteen other states have statutes that more broadly apply the standards to include loans, tax incentives, and other forms of public support to private projects. New York is among ten other states that enable private developers to accept public money without paying prevailing wages and benefits.”
“New York is supposed to be in the forefront, leading the way on labor issues. With the highest percentage of organized workers in the country, and a reputation for its progressive, pro-labor history, New York’s current prevailing wage law is an embarrassment. New York’s construction workers deserve better,” Cahill said.
“The State of New York has an opportunity to promote responsible economic development by broadening the scope of the prevailing wage law so that ‘public work’ includes all publicly-assisted projects,” the study says.
Assemblyman Harry Bronson (D-Rochester) agrees. "Economic growth driven by government TAXPAYER funded programs and tax subsidies will never reach its full potential unless construction workers on those projects receive the prevailing wage. Economic development always focuses on the number of new, permanent jobs to be created, but that mentality ignores the substantial economic benefits derived from a local, well-paid, well-trained construction workforce.”
The study also emphasizes that closing the prevailing wage loophole would level the playing field: “The prevailing wage law protects local construction contractors from low-paying and out-of-state contractors who might undercut in-state contractors on labor costs…” The report refers to the fact that when a project is covered by the prevailing wage, low-wage contractors lose the competitive advantage they would otherwise gain from paying substandard wages. The prevailing wage levels the playing field so that local contractors are not pressured to slash wages and benefits to win bids.
State Senator Terrence Murphy (R-Hudson Valley) said, “The report released by Cornell validates the need to properly define public works projects in New York State. Doing so will strengthen the middle class and provide clear standards that investments made with taxpayer dollars and incentives would adhere to.”
NYS AFL-CIO President Mario Cilento said, "All projects receiving taxpayer resources must be defined as ‘public works,’ which triggers the prevailing wage requirement to help stabilize local economies, create additional apprenticeship opportunities and create a pathway to the middle class. Paying prevailing rate ensures the most experienced and qualified workers with the best safety training are on the job resulting in better quality work and ultimately at a lower cost. Quality results, good jobs, responsible use of taxpayer dollars and most importantly, worker safety, should always be the priority and never sacrificed at the expense of higher profits for a select few."
Greg Lancette, President of the Central and Northern New York Building Trades Council and Business Manager of Plumbers & Steamfitters Local 267 said, “Right now, our communities are losing out and not realizing the full economic benefits of these taxpayer-supported projects. The Cornell report shows that the prevailing wage is about more than just fair pay. It’s also about health insurance, safety, and spending power for local workers. It’s time for a change, and it needs to be done in this year’s budget.”
The ILR study points out additional benefits of closing the prevailing wage loophole:
“New York’s prevailing wage law requires that employers provide health care benefits. Without that protection, construction workers and their families may have inadequate or publicly-subsidized health insurance. If New York expanded the scope of tis prevailing wage law to more projects, more working families would receive health benefits.”
Also: “Prevailing wage regulations permit employer contributions for training as part of the law’s required compensation. This provides an incentive for employers to invest in apprenticeship and training programs. Prevailing wage laws increase apprenticeship utilization by 40 percent and reward both union and nonunion contractors who have apprenticeship programs.”
“Too many taxpayer-supported projects in New York are not required to pay prevailing wage because of a loophole in the law. That loophole must be closed and closed now,” Cahill said. “New York must support in-state contractors and their skilled workers by hiring local tradespeople, in turn helping communities across New York.”
A copy of the Cornell ILR study can be found here: https://digitalcommons.ilr.cornell.edu/briefs/59/.
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About the New York State Building & Construction Trades Council
Established in 1958, the NYS Building & Construction Trades Council currently represents over 200,000 unionized construction workers in New York State. Our 16 regional building trades councils, 12 trade-specific district councils and state associations, and 135 local unions represent the trades that build our roads, bridges, schools, and office buildings. Believing that every worker deserves a fair wage and safe working conditions, our mission is to protect and further these basic privileges.