Democrats failed to pass prevailing wage last session. Will it happen this year?
The legislation is exposing fissures within the ascendant Democratic Party.
Backers of a controversial bill to expand New York state’s existing prevailing wage law, which sets minimum pay levels for the construction trades, are vowing to renew their effort at the start of Albany’s 2020 legislative session.
The proposal – which is sponsored by Assemblyman Harry Bronson and state Sen. Jessica Ramos, both Democrats – would broaden the universe of projects required to pay the prevailing wage to include ones that receive at least 30% of their financing from taxpayers, including economic development subsidies for private sector projects.
While the Democratic majorities in the Assembly and state Senate passed an ambitious progressive agenda in this year’s session, including the landmark Farmworkers Fair Labor Practices Act, they never came close to reaching a consensus on the prevailing wage measure.
The skirmish over what the final bill would look like exposed some geographical and ideological fissures within the state’s ascendant Democratic Party, and in the labor movement that helped power its takeover of the state Senate.
The Buffalo News in July attributed the bill’s demiseto Gov. Andrew Cuomo and some Senate Democrats getting “cold feet” because they “became increasingly worried about warnings from business groups, especially developers and builders, that economic development in some areas, including Buffalo, could be sharply undermined by new and higher wage edicts.”
And the debate over the final version of the prevailing wage legislation came just several weeks after Amazon pulled out of its multibillion-dollar deal with New York state and New York City.
The Amazon deal itself fractured New York’s labor movement, with the Building and Construction Trades Council of Greater New York and 32BJ SEIU standing with Cuomo and New York City Mayor Bill de Blasio in favor of it, and the state AFL-CIO, Teamsters and Retail, Wholesale and Department Store Union opposing the corporate behemoth.
And Cuomo, who has generally aligned himself with organized labor, called for significant exceptions to the prevailing wage bill. “I would exempt affordable housing projects because you can make a case that it increases the cost of construction,” he said on WNYC. Cuomo also wanted to exempt New York City from the bill.
“This time of year in the Capitol you have a lot of political desires, which are sometimes uninformed or unsophisticated as the actual effect,” Cuomo said in another radio broadcast. “If you pass a prevailing wage bill that actually stops construction, then you help no one.”
With preparations for the next session underway, Bronson said he was not discouraged by the heavy resistance that the bill met earlier this year.
“The New York state Constitution states that workers on public works projects are to be paid a prevailing wage, and I am proud to sponsor legislation in the Assembly that would make this constitutional mandate a reality for New York’s hardworking families,” he said in a statement to City & State. “After speaking with numerous stakeholders and partners in government during negotiations this past year, I am confident that there is a path forward, and advancing this bill will be one of my highest priorities in the upcoming legislative session.”
Several union leaders were reluctant to go on the record because the behind-the-scenes dynamics around the measure were still very much in flux. But one described what went on during the previous session’s debate over the bill “as a circular firing squad, where everybody was blaming somebody else” for its collapse at the end of the session.
But state Sen. John Liu, who as New York City comptroller was a key player in the enforcement of existing prevailing wage law, rejected the “circular firing squad” analogy.
“Absolutely, prevailing wage will not only happen, but it will be expanded in New York City,” he said in an interview. “Sometimes, the legislative process is driven by deadlines, and the deadline is not this year, it is 2020” – referring to the June expiration of the state’s 421-a tax exemption for affordable housing that’s publicly financed.
Liu dismissed the conservative critique that an expansion was a kind of corrupt quid pro quo between the Democrats and their union supporters. “We do this as a way to not undercut in the public sector what unions are able to achieve in the private sector,” he said. “Prevailing wage is not a giveaway and it is not favoritism, it is just upholding what unions are able to uphold on their own. If public dollars are being used, it should not be used to undercut the unions.”
Any deliberations over expanding the prevailing wage can be expected to reignite the underlying debate about the state’s existing prevailing wage law. While the union movement sees it as an essential protection against marketplace competition driving down wages, fiscal conservatives see them as an inhibitor of economic growth and job creation.
According to James Parrott, senior director for fiscal and economic policy at The New School’s Center for New York City Affairs, strong prevailing wage laws are “an essential support for middle-income jobs” that also ensure construction workers get “critical health and safety training.”
But E.J. McMahon, the research director at the right-leaning Empire Center for Public Policy, counters that “it is frequently misrepresented as representing some sort of minimal ‘living’ wage when it actually is used to impose union work rules, manning ratios and combined wage and benefit levels on all public jobs subject to it.”
As for expanding the prevailing wage, McMahon describes “the relentless push for so-called prevailing wage expansion” as being driven by “the unions’ need to keep pumping more cash into underfunded pension plans, in order to keep paying benefits to the already retired and soon-to-retire.”
As boosters of an expansion begin to count votes, they have to account for the new strategic alliance between the Real Estate Board of New York, which represents developers, and the Building and Construction Trades Council of Greater New York, which is composed of 15 unions. The potential game-changing partnership between the deep-pocketed real estate industry and the building trades came after Albany’s shift away from the real estate industry, the passage of landmark tenant protections and the defeat of Amazon’s second headquarters in Queens.
“The agreement puts a blue-collar face on development and simultaneously tries to paint progressive lawmakers and tenant groups as opponents of organized labor,” The New York Times reported last month.
“I understand advocating on the part of tenants,” Gary LaBarbera, president of the building trades council told the Times. “Many of our members are tenants. But at the same time, part of that advocating should be about building more affordable housing for New York City. And if the development community is not building, then our members are not working.”
As for what position the new coalition will take on the prevailing wage legislation, a building trades spokesperson only offered some contextual background about how the new alliance might find “common ground.”
In a statement to City & State, James Whelan, the Real Estate Board of New York president, said that his members “undertake private sector developments that are built with union labor and staffed with union building service workers,” and that the trade group supports “fair wages and benefits for workers across New York.”
“The state Legislature can and should take steps to ensure a living wage for all construction workers in New York,” he added, “rather than passing legislation that would not achieve that goal and would instead exponentially increase the cost of construction, leading to less development and fewer jobs for both union and nonunion construction workers.”
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