Here’s why California developers must pay construction workers a fair wage

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BY SAMANTHA DRAPER
Special to The Bee
OCTOBER 27, 2017 5:00 AM

Eighty five percent of the costs associated with housing construction in California are unrelated to the wages or benefits paid to the workers who actually build it.

And since 1990, those wages, adjusted for inflation, have actually decreased by 25 percent and been redistributed into profit margins for developers, which are growing 50 percent faster than the cost of materials or labor.

Developers got most of what they wanted in housing reform legislation that Gov. Jerry Brown signed into law this month. And yet the building industry continues to complain about wages that are going to be paid to construction workers on certain projects.

The builders claim that they will need to raise prices to grow their already bulging bottom lines if they have to pay their workers enough to live. But there’s no real evidence to support this assertion.

In reality, the elimination of red tape on new housing construction likely will save most developers far more than any modest increase in their workers’ wages.

Peer-reviewed research on prevailing wages shows no impact on total project costs, because these standards promote skills training and quality workmanship that increase productivity and reduce spending on fuel and materials. And because they are market rates that reflect local cost of living, they save taxpayers the cost of subsidizing below market wages with welfare expenditures.

These aren’t abstract academic theories.

In 2015, the state of Indiana repealed its prevailing wage law. Earlier this year, the Indiana Assembly assistant Republican floor leader was asked about the effect on project costs. His response: “It hasn’t saved us a penny.”

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Columbus, OH, tests plan to increase apprenticeships, local hires

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By Kim Slowey
Nov. 2, 2017

Dive Brief:

  • The city of Columbus, OH, is testing a new construction apprenticeship and local hiring plan for public projects that it hopes will boost the local construction workforce, according to The Columbus Dispatch.
  • The agreement between the city and the Columbus Building & Construction Trades Council, AFL-CIO, requires the organization to host apprenticeship fairs, use 20% Columbus and 25% regional residents on the project, and collect five cents for every hour each member works to help fund an apprentice scholarship fund. City officials said non-union contractors will also be able to bid the project.
  • The first project to operate under the program is the construction of an $8 million firehouse. The local chapter of the Associated General Contractors of America expressed concern that the new workforce requirements would make it more difficult for contractors to bid on projects competitively.

Dive Insight:

It’s not uncommon for state and local governments to specify hiring requirements for publicly funded projects. Local activists often see it as a way to get a return on invested taxpayer money. However, while the goal of using as many locals as possible is not one with which many would disagree, the details of these initiatives are up for debate.

First, in some markets, contractors have difficulty finding enough workers to meet local mandates. For example, contractors working on the new Little Caesars Arena in Detroit were fined almost $3 million through March of this year for failing to meet the local hiring requirements laid out by the city. By all accounts, the contractors did their best to recruit local workers, but the skilled talent pool was just too thin.

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The Broken Promise

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Report from wvbrokenpromise.com

Legislative leaders pushed through a law to cut local construction workers’ wages dramatically claiming the action would save money and create more jobs.

Despite overwhelming evidence to the contrary, Republican legislative leaders quickly passed a bill to eliminate the state’s prevailing wage law.

The legislative leadership promised taxpayers would see a savings of 25 to 30 percent on public works projects.

There hasn’t been the promised savings based on examination of the award of bids since July 1 when the law went into effect and during a three-month period in 2015 when the Legislature suspended the prevailing wage law.

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Direct Federal Spending High on Industry’s Infrastructure List

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Industry officials, lawmakers also agree on need for Highway Trust Fund fix.

October 14, 2017
Tom Ichniowski

As the construction and transportation industries continue to wait for more specifics from the White House about President Trump’s still-unreleased infrastructure investment plan, some top officials are making clear that they want direct federal funds to be a keystone of the proposal, though acknowledging that public-private partnerships can be helpful in some cases.

Lawmakers and witnesses at a House highways and transit subcommittee hearing on Oct. 11 also said they want the plan to include a remedy for the Highway Trust Fund, which will face another shortfall in 2020 unless it gets a revenue infusion.

Rep. Bill Shuster (R-Pa.), chairman of the full Transportation and Infrastructure Committee, said the panel has been working closely with administration officials on “principles” for the infrastructure plan “And we hope to see that soon coming out of the White House,” Shuster added..

The wait for the plan has been long. There has been little action in the House, too, said Rep. Peter DeFazio (Ore.), the transportation committee’s top Democrat.

He noted that it has been more than nine months since the committee held its first 2017 infrastructure hearing, on Feb. 1 and House lawmakers have only rolled out a few legislative proposals.

DeFazio said that “all we’re doing around here is just talking, while the country crumbles.” He added, “I mean, seriously, let’s get to work.”

DeFazio also called for a strong federal role. He observed that more than 20 states in recent years “have stepped up” by raising revenue, mainly through increases in their own gasoline taxes. But DeFazio said those additional dollars are not enough. “They need a federal partner,” he said.

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GUEST COMMENTARY: Saving Midwest infrastructure from climate change

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Mary Craighead
Oct 13, 2017

The increasing frequency and intensity of natural disasters that have recently come to Texas, Florida, the Gulf Coast, California, Puerto Rico and the U.S. Virgin Islands are a harsh reminder our climate is changing.

But these changes are not limited to far-off coastal communities and tropical islands.

In the Midwest, average temperatures are 4.5 degrees higher than they were in the 1980s. Annual “heavy precipitation days” are up 27 percent since the 1950s.

Great Lakes ice coverage is down, and electricity outages and demand for cooling systems are up. Projections expect temperatures to rise and heavy precipitation seasons to get even more severe for the balance of this century.

Each of these changes carries a very real risk – both in terms of direct infrastructure costs and impact on our $2.6 trillion regional economy.

Higher temperatures reduce the lifespan of roads and bridges, can cause railways to buckle and affect aircraft performance. As we’ve seen just in the past few weeks, flooding and more extreme storms can have damaging impacts far beyond the destruction of individual homes and businesses – disrupting freight and commuter routes and threatening above-ground energy transmission capabilities. This latter point is a special risk for the economy of the Midwest, which features mostly above ground transmission lines.

During this especially intense storm season, lawmakers in Washington and state capitals across our region have been discussing ways to maintain, expand or modernize the infrastructure systems at the heart of our economy. Ultimately, their proposals will entail a significant expenditure of public dollars.

But just as taxpayers wouldn’t want us using outdated technology for today’s infrastructure, we shouldn’t be creating facilities according to outdated heat and rainfall trends. To ensure taxpayers get the best bang for the buck, we need policy makers and project planners to incorporate today’s climate realities.

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Construction falls lead OSHA’s top safety violations for 2017

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Kim Slowey
Sep 27, 2017

Dive Brief:

  • Fall protection in the construction industry, specifically, led the Occupational Safety and Health Administration’s annual list of the most commonly cited workplace safety violations, according to a preliminary ranking reported by the National Safety Council.
  • Four violations on this year’s list are specific to OSHA’s Part 1926 – Safety and Health Regulations for Construction), including inadequate fall protection, lack of guardrails for scaffolding, improper use of ladders and lack of fall-protection training, according to Business and Legal Resources.
  • The list is preliminary and the final version is due out in December, though it is not expected to change in the meantime. The category of Fall Protection – Training Requirements is new to OSHA’s top 10 this year.

Dive Insight:

Fall protection has been of particular concern to OSHA as falls remain the leading cause of accidental death on construction sites. Of the 937 job site deaths reported in 2015, 350 were fall-related.

In an effort to increase job-site safety, OSHA has taken to levying significant fines in the case of certain violations, such as repeat offenses. In August, OSHA fined a Florida roofing contractor more than $1.5 million after repeated fall-protection violations. To reinforce the citation’s severity, the agency also added the company to its Severe Violator Enforcement Program, under which it will be subject to extra monitoring and inspections.

Trench safety is another OSHA concern. Last month, the agency fined South Dakota contractor First Dakota Enterprises $95,000 for conditions that led to a non-fatal collapse. The worker, who was covered by debris as a result of the collapse, survived, but OSHA said the company did not provide the proper protection systems and inspections that could have prevented such an incident.

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‘Hire local’ executive order signed for construction projects (NY)

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By NICK LIPPA
Sept. 28, 2017

Local officials and business owners came together for the signing of a new executive order that focuses on hiring local labor for large construction projects in Erie County.

The First Source Policy, signed by Erie County Executive Mark Poloncarz Wednesday, requires construction projects in Erie County over $250,000 and involving at least three workers to employ qualified local residents, with a focus on hiring individuals from high-poverty areas. That includes 16 zip codes residing in Buffalo, Cheektowaga and Lackawanna, to name a few.

Buffalo NAACP President Rev. Mark Blue said this order will set a benchmark for other areas to follow.

“Getting a chance to move out of poverty, to get them into jobs that they’re skilled at and, hopefully, with the training that’s being done by the city and their Northland Project, bring them skills to where they’re employable not just for one job, but for many jobs,” Blue said.

He said the policy will help urban as well as rural residents.

“It’s equally distributing, let me say, wealth to areas that have received, wealth into areas that have been economically disadvantaged for years,” Blue said. “And also it brings hope to those who have not had an opportunity to be employed or even underemployed.”

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Senator Lewis: We Need To Do More to Stop Wage Theft

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It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts.

By Bob Holmes (Patch Staff)
Updated Oct 6, 2017 2:12 pm ET

An Op-Ed Column from Senator Jason Lewis and Representative Paul Brodeur:

Earlier this year, at the start of the new legislative session, we were pleased to be appointed by the Senate President and House Speaker, respectively, to co-Chair the Joint Committee on Labor and Workforce Development. Together, we have since immersed ourselves in a wide range of labor and employment issues in the Commonwealth. We have held committee hearings on proposed legislation, met with many different stakeholders to hear their concerns and feedback, and conducted research on policies and best practices around the country.

One particular issue that may surprise many people is the serious problem of wage theft. Wage theft is a collective term for any denial of wages or benefits that are rightfully owed to an employee. The most common wage theft violations in Massachusetts are non-payment of wages, failure to keep true and accurate records, failure to pay the proper overtime rate, child labor violations, failure to pay minimum wage or tips, and failure to pay prevailing wage. Other violations include failure to submit accurate payroll records, earned sick time violations, and improper classification of employees as independent contractors.

Just how pervasive is wage theft? It is estimated that nearly $700 million is not paid to about 350,000 mostly low-wage workers each year in Massachusetts. In addition to the harm this inflicts on struggling working families, it also cheats the state out of greater economic activity, jobs, and tax revenue.

The Attorney General’s Office (AGO) is the state’s primary enforcer of laws relating to wages. Enforcement is carried out by attorneys and investigators in the AGO’s Fair Labor Division (FLD). In Fiscal Year 2017, the FLD received 16,684 calls and 5,604 complaints, and opened 607 cases related to wage theft. The FLD ordered employers to pay more than $6 million in restitution and more than $2.6 million in penalties. This is more than double the restitution ($2.6 million) and about triple the penalties ($900,000) from Fiscal Year 2016. The FLD also cited or settled 27 earned sick time cases, totaling $160,000 in restitution and penalties. And, the FLD issued 47 citations to 46 employers and assessed more than $270,000 in penalties for child labor law violations.

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San Jose: Public projects valued at $6 million will require project labor agreements

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By RAMONA GIWARGIS
PUBLISHED: October 24, 2017 at 1:09 pm | UPDATED: October 25, 2017 at 4:54 am
SAN JOSE — City lawmakers on Tuesday adopted a policy that requires contractors to hire at least some union workers on public projects valued at $6 million or more, including new libraries, fire stations and airport improvements.

The City Council adopted “project labor agreements” requirement on a 6-5 vote. The agreements require a contractor to hire some workers from a local union hall and pay state-mandated prevailing wages — what a majority of workers in a county’s largest city earn. Contractors also must provide fringe benefits and hire a number of apprentices from disadvantaged groups. Contractors will be allowed to hire 35 “core” workers from their own workforce with the rest hired through a union hall.

Private construction projects, those funded by federal dollars and city-funded affordable housing projects will be excluded. Santa Clara County, Los Angeles, San Francisco, Oakland, Cleveland and New York have all passed similar labor agreements.

Backers said the agreements will help ensure every worker has a fair chance of getting work and support families struggling to survive in Silicon Valley’s technology-driven economy. Critics said the move will stifle competition and inflate construction costs, meaning taxpayers get fewer public improvements for their tax dollars.

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