Who will prevail in New York’s prevailing wage fight?

The bill still lacks the support it needs to pass the Senate, according to lawmakers.
The bill still lacks the support it needs to pass the Senate, according to lawmakers.
Hyejin Kang/Sshutterstock
The bill still lacks the support it needs to pass the Senate, according to lawmakers.

Who will prevail in New York’s prevailing wage fight?

The fate of a proposed expansion of public works depends on the state Senate.
May 14, 2019

Many issues before the state Legislature pit Republicans versus Democrats, but the effort to expand the use of the prevailing wage is not so simple.

Most Democratic lawmakers support a measure expanding prevailing wages, and some Republicans have signed on to the legislation in the state Senate and Assembly. Yet the union-friendly bill – which would also apply to nonunionized workers – still lacks the support it needs to pass the Senate, lawmakers say.

Some critics say people of color would not receive a fair share of the benefits brought by expanding the prevailing wage. Civil rights activists question whether the bill would really raise pay for nonunion labor as much as its supporters say it would. Others say it might impede affordable housing and economic development. Business groups in particular are pushing hard to limit the proposed changes, which they say could increase costs and deter development.

“I just feel that I need to understand it better,” state Sen. Rachel May, a first-term Democrat who represents the Syracuse area, told City & State.

Nonetheless, supporters say they are confident the measure will pass before the legislative session ends next month. Organized labor is pressuring lawmakers to support the proposal, and Gov. Andrew Cuomo is also pushing for a deal. Meanwhile, opponents of the bill are signaling that they are focused on influencing the final legislation rather than stopping it altogether. The state Labor Department defines the prevailing wage as “the pay rate set by law for work on public work projects.” However, the current definition of “public work” depends on the project’s purpose, public benefit and the parties involved, according to the department.

Under the proposed expansion, exceptions would be made for some affordable housing or small-scale projects, but negotiations on where to draw the line on what will and will not be a public work are ongoing. About a dozen Democratic state senators have not yet signed on as co-sponsors of the legislation. In the Assembly, the legislation has moved through committee and is now on the floor calendar and appears to have enough support to pass, as it did last year.

A final vote has not been scheduled because supporters say they want to wait until the Senate and governor get on the same page with a final version, according to Assemblyman Harry Bronson, the sponsor of the legislation. “I’m not a betting man, but if I were, I would say we have a very good chance of getting it passed by the end of session,” he said. “We’re having regular conversations. They’re fruitful. There’s movement on all sides.”

The proposal appeared primed for inclusion in the budget after organized labor made a show of force in the final days of negotiations at the end of March. But business groups and skeptical lawmakers helped nudge legislative leaders and the governor to put the proposal on hold. A coalition of groups is now trying to pick up where they left off in pushing lawmakers and the governor to a deal.

Building trades unions are aiming to sway the public and lawmakers alike with a media campaign that argues that the legislation would help workers, spur economic development, reduce fraud and promote racial diversity in the construction industry. “It’s a benefit for all construction workers in New York,” said Michael Cinquanti, director of policy and planning for the New England Regional Council of Carpenters. “We view this bill as an economic stimulus and an expansion of the middle class.”

Supporters cite studies indicating that the economic benefits of raising wages could help counter the increased costs of projects. Wages and benefits make up about a quarter of total construction costs in New York, according to a 2018 report by Colorado State University-Pueblo on the use of the prevailing wage. A prevailing wage promotes high productivity, the report found, which mitigates the effects to the overall project from increasing labor costs. “These claims of dramatic cost increases are overly simplistic and inaccurate,” Colorado State University-Pueblo economics professor Kevin Duncan, who authored the study, wrote in a March 20 op-ed in the Daily News. “Most utilize an analysis that is not accepted by peer-reviewed research in the construction industry.”

Opponents of the bill though say it would hurt their bottom line. The Real Estate Board of New York has opposed the bill, as have business groups who say that the bill will dramatically increase costs for all types of projects that receive public support. While developers are open to discussing ways to raise wages, they still need “flexibility” in their contracts with individual unions on “work rules, wages, benefits” and other matters, according to Mitchell Pally, CEO of the Long Island Builders Institute. “This is the No. 1 issue facing the real estate development community on Long Island,” he said.

Even some activists have joined business interests in opposing the bill, saying they are concerned about whether the benefits of the legislation would really help nonunion workers. These workers would technically be covered by the legislation, but the administrative costs associated with public projects could limit participation of companies owned by women and minorities, said Reginald Bachus, an associate pastor of the Abyssinian Baptist Church and founding member of the 400 Foundation, a faith-based nonprofit pushing for economic justice in the construction industry. More study is needed of diversity in organized labor and how an expansion of the prevailing wage would affect people of color, according to Bachus. “So what we’re pushing for is, don’t rush it through,” he said.

The governor has yet to publicly state his opinion on how to resolve these issues, but a Cuomo spokesman confirmed that the issue remains a priority for the administration. The governor has cited prevailing wages, along with recreational marijuana legalization and the renewal of rent regulations, as a priority. “We have to look at prevailing wage, which I think is a legitimate issue,” he said on WAMC on April 4.

Leadership in both houses of the state Legislature have also signaled a desire to reach an agreement that organized labor, business groups and activists can live with. “The level of attention that people are paying to this certainly gives me reason to sense that people are serious about trying to come to an agreement,” Bronson said. Details remain to be worked out, but the sides appear to be getting closer to a deal.

Senators have yet to discuss the issue as a conference, according to state Sen. Joseph Addabbo Jr., a co-sponsor of the bill, but as the end of session looms, things could get more testy. “I really haven’t heard any of the opposition yet,” the Queens Democrat said. “And I think it’s because this bill has been lying in the weeds somewhere and it hasn’t really popped its head up yet.”

Zach Williams
is a staff reporter at City & State and its sister publication, New York Nonprofit Media.
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