Expands Prevailing Wage Mandates to Offsite Fabrication (A. 8071/S. 6576)

Date: 2017

A.8071 (Brindisi) S.6576 (Savino) 

MEMORANDUM IN OPPOSITION

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 expand prevailing wage mandates onto fabrication work, which would threaten New York manufacturing jobs, increase the costs of public construction and create additional burdens on taxpayers and local governments.

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. 

In a recent report on prevailing wages, 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 current application prevailing wage law.

Efforts to expand the application of New York’s prevailing wage law onto non-construction related practices will only further inflate the costs of public construction and further squeeze overburdened taxpayers and local governments.

Additionally, increasing the cost of New York fabricated construction materials via state government mandate would place New York manufacturers at a significant competitive disadvantage with their counterparts in neighboring states who do not have to contend with the same onerous mandate. 

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 to undertake a statistically valid survey of the private construction sector in each of the state’s delineated economic regions to determine what share of a trade’s workers are 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.