Letter to the editor: Restoring prevailing wage would save taxpayers money (WV)

Posted by National Alliance for Fair Contracting on

Jan 16, 2020

As West Virginia continues to fall short on revenue collections, Gov. Jim Justice said his budget proposal is “very conservative” in his State of the State Address. But Justice missed an important opportunity in his speech to get ahead of budget shortfalls that would put students first, hire West Virginia workers and save taxpayers money.

Restoring the prevailing wage should be one of the tools state government uses to get West Virginia through the leaner times ahead. Since prevailing wage repeal, students have suffered from new schools not opening on time and with faulty school construction. This costs taxpayers dearly.

Taxpayers have lost millions of dollars from the repeal of prevailing wage. Multiple new school facilities must be redone or fixed using our government dollars. Contractors who benefit their own bottom line with shoddy school construction built by unskilled workers from out of state cost us local jobs and the state tax revenues from not having more West Virginians employed.

While taxpayers shell out money later this year to redo floors at two new schools in Fayette County, the governor and Republican leadership in the Legislature will be looking for ways to head off shortfalls with spending cuts. But government leaders should also look at the positive impact of bringing the prevailing wage back. This law will employ more West Virginians to build our schools and eliminate wasteful spending from “do overs” caused by poor school construction.

Charles Parker
President, West Virginia State Building and Construction Trades Council

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Labor leader says square footage increase shows prevailing wage repeal hasn’t worked (WV)

Posted by National Alliance for Fair Contracting on

By Jeff Jenkins in News
November 10, 2019 at 4:11PM

CHARLESTON, W.Va. –

School superintendents from dozens of counties will appear before the state School Building Authority next week in hopes of convincing the SBA to fund their school construction projects in the latest round of “Needs” grants. A recent move by the SBA will allow some of those counties to seek more money for their projects.

The SBA last week approved a 20 percent increase in allowable square footage costs for new school construction.

“We’re seeing trends in square foot costs that affect all projects so we thought it was prudent for us to raise the maximum amount a county could request up to 20 percent higher,” SBA Director of Architectural Services Ben Ashley said.

A West Virginia labor leader said the increase is further proof the the legislature’s decision to repeal the state’s Prevailing Wage law in 2016 hasn’t worked.

“It’s true that costs have gone up but it’s kind of surprising that with the repeal of prevailing wage they are recognizing this,” West Virginia Affiliated Construction Trades Foundation Director Steve White recently told MetroNews. “You get what you pay for and the school systems are finding out when low-wage labor is used it’s causing all sorts of problems and costing them more.”

In 2016 the Republican-led legislature wiped out the long-held practice in West Virginia where the government surveys contractors to determine the minimum level of pay for a variety of classifications of jobs on state-funded projects, such as schools.

Supporters of prevailing wage argued prevailing wage provided a living wage for workers, while keeping out-of-state contractors from undercutting West Virginia construction companies and workers. Those favoring the repeal said the state overpaid millions of dollars for projects with the flawed survey system.

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Labor says study proves ending prevailing wage was a mistake (WV)

Posted by National Alliance for Fair Contracting on

By MetroNews
May 21, 2019 at 2:07 PM

CHARLESTON, W.Va. – The organization which represents skilled tradesmen in West Virginia believes a new study out of the University of Missouri-Kansas City is clear evidence the removal of the prevailing wage requirement in West Virginia was a mistake.

The Affiliated Construction Trades Foundation released the findings from the Midwest Economic Policy Institute which examined West Virginia’s state funded construction costs three years after the legislature eliminated a requirement for payment of a prevailing wage on state funded construction jobs.

“The report finds there has been no savings,” said ACT Foundation Executive Director Steve White on MetroNews Talkline. “This experiment to bring savings has failed.”

Supporters of the removal of the prevailing wage requirement claimed the action would enable to the state to enjoy enough savings to build five new schools for the cost of three. White said the data from the study found quite the opposite. He said the study found no savings to taxpayers, despite diminished wages for the laborers on the job.

“Building four schools for the price of three or five for the price of three would be a 25 percent savings,” White said. “It’s totally untrue.”

White said many of their members have lost not only wages, but also lost benefits because of the provision’s removal.

“When you compare it to surrounding states, they’ve lost even more,” he said. “The folks in surrounding states that have prevailing wage have seen modest increases. You’ve seen huge cuts in wages and benefits.”

White and his organization plan to use the data to build their case for the legislature to reinstate the prevailing wage law in the next legislative session. White said the provision has done more harm than good, despite what it was touted to have been in the beginning.

“We want good paying jobs and we want people to have good benefits,” he said. “There’s also cost to the taxpayer when people are not paid and not productive and don’t have those benefits.”

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(See PDF of Study)

 

2-Minute Preview: Lawmakers to hear bills on prevailing wage for school construction, … (NV)

Posted by National Alliance for Fair Contracting on

Tuesday, March 19, 2019
David Calvert

Lawmakers on Wednesday will consider reversing a 2015 Republican-backed law limiting prevailing wage for school construction projects, …

Prevailing wage on school construction projects

Lawmakers on the Assembly Government Affairs Committee will review AB190, a bill that reverses some changes to prevailing wage rules that were passed under Republican control in 2015.

The measure would eliminate the requirement that public schools and colleges pay 90 percent of the prevailing wage – a sort of minimum wage for construction work – and revert it to 100 percent. It would also lower the threshold at which prevailing wage kicks in, from projects that cost $250,000 and up to $100,000 and up.

The measure is sponsored Democratic Assemblyman Skip Daly. The committee meets at 8:30 a.m.

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Study: Prevailing Wage Strengthens Minnesota’s Economy & Promotes a Skilled Workforce (MN)

Posted by National Alliance for Fair Contracting on

School Project Data Shows the Law Boosts Local Hiring and Has No Effect on Construction Costs

Date: July 16, 2018
Author: Frank Manzo IV

St. Paul: In the wake of Michigan’s controversial decision to repeal its prevailing wage law, new research shows that Minnesota’s prevailing wage law boosts the economy by almost a billion dollars every year, creates 7,200 jobs, strengthens apprenticeship programs, increases local hiring by 10%, and has no significant effect on the overall cost of publicly-funded construction projects. The research was completed by the Midwest Economic Policy Institute and University of Colorado State University-Pueblo economist Dr. Kevin Duncan.

“This study brings important, new evidence that Minnesota’s prevailing wage law maintains wages and benefits for Minnesota’s construction workers, reducing their need for public safety programs and helping to keep these working families in the middle class, and it does this without a detectable impact on public construction costs,” said University of Minnesota labor economist Dr. Aaron Soujourner. Soujourner is a former economic adviser to President Trump and President Obama who performed a peer review of the research.

Prevailing wage functions as a local minimum wage for different types of skilled construction work. It is typically applied to publicly-funded projects like roads, bridges, and schools, and is based on what skilled craft workers in the community are most often paid for comparable work. The state’s average full-time, blue-collar construction worker currently earns about $48,000 per year.

“Prevailing wage is a win-win-win for Minnesota taxpayers, the state’s economy, and the construction industry,” said study co-author and Colorado State University-Pueblo economist Kevin Duncan. “While the data consistently shows that overall project costs and bid competition are not affected by the law, its impacts on wages, local hiring, welfare reliance, workforce productivity, and the overall stability of the labor market are especially significant.”

The study analyzed more than 600 winning bids for school construction projects in the Twin Cities region between 2015 and 2017. While the majority of bids did not include prevailing wages, there was no statistically significant difference in the average total cost of prevailing wage bids and non-prevailing wage bids. However, prevailing wage bids utilized 10% more local subcontractors.

“In terms of project costs and local hiring, the new data out of Minnesota mirrors what’s been seen in other states,” said study co-author and Midwest Economic Policy Institute Policy Director Frank Manzo IV. “A repeal of Minnesota’s prevailing wage law would not save money, but it would export more tax dollars to businesses from out of town.”

(Read More)

(PDF Copy of Full Report)

(Executive Summary)

(Key Findings)

My Turn: Armand E. Sabitoni: Morgan attacks construction workers

Posted by National Alliance for Fair Contracting on

By Armand E. Sabitoni
Posted Apr 10, 2018 at 5:49 PM

There is no greater investment than ensuring our children have the foundation built for future success. As Rhode Island’s school buildings get older and unhealthier each year, the time is now to invest in new school infrastructure. Building new schools and making necessary technology updates are vital to Rhode Island’s economic recovery and also stimulate job growth.

Construction workers are the backbone of a strong economy and play a critical role in school infrastructure investment. Skilled men and women go to work each day, in sometimes difficult conditions to put food on the table for their families. Tirelessly, they pour blood and sweat safely and efficiently building our roads, bridges, schools, water and energy systems.

Unfortunately, on her March 30 Commentary piece (“Fix more R.I. schools for less money”), Rhode Island House Minority Leader, Patricia Morgan, sadly insinuates that all construction workers are overpaid and should take a pay cut to build our schools.

Morgan proposes that the state exempt school construction from the state’s prevailing wage law, falsely thinking this will save money. Some elected officials have tried this charade in other states, attacking the livelihood of blue-collar workers they claim to represent.

Prevailing wage laws are bipartisan and have Republican roots back to 1931, when Sen. James Davis, R-Pa., and Rep. Robert L. Bacon, R-N.Y., helped to pass the Davis-Bacon Act federally and most states passed local prevailing wage laws quickly thereafter. Nationally, Republicans and Democrats, consistently support prevailing wage laws as necessary to protect family-supporting, blue-collar construction jobs.

Prevailing wage laws guarantee a minimum floor for wages, leveling the playing field for construction contractors bidding public work. Data based on what skilled workers earn in a local area are used to set the prevailing wage rate.

All construction workers, union and non-union, are paid a set wage and benefit rate determined by market surveys for work performed in their classification. These laws protect the local skilled workforce in Rhode Island from out-of-state contractors who might otherwise attempt to underbid their competition with low-wage out-of-state workers. Strong prevailing wage laws generate millions in local economic spending activity.

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Raimondo Speaks To Construction Unions, Supports Prevailing Wage

Posted by National Alliance for Fair Contracting on

The taxpayers will not get any breaks on school construction but will pay the prevailing wage, the governor signaled in a D.C. speech.

By Margo Sullivan, Patch Staff |
Apr 18, 2018 1:30 pm ET

WASHINGTON, DC – Rhode Island Gov. Gina Raimondo told the Building Trades unions she is running for another term, and she supports the prevailing wage. Raimondo delivered a speech in Washington, D.C. on Wednesday. In her remarks, she mentioned the projects her administration has undertaken to put construction workers back on the job. Among the projects, she included her $1 billion plan to replace and rebuild the public schools.

State Rep. Patricia Morgan, a declared Republican candidate for governor, had suggested saving the taxpayers money by not paying the prevailing wage for the school construction jobs. But Raimondo, without mentioning Morgan, stood squarely with the unions and demands for the prevailing wage. The unions had a seat on the panel that developed the billion dollar plan for the schools. No taxpayer groups were represented.

Here is the governor’s speech.

Introduction
Thank you! I love having the opportunity to spend time with people who build things.

Thank you Sean McGarvey. I am so grateful for your friendship and support, and for inviting me back to speak here once again. Brent Booker, thank you for your leadership and for everything you do to support America’s tradesmen and tradeswomen. Terry O’Sullivan, you’re incredible – I’m so thankful for our partnership.

Armand Sabitoni – the pride of Rhode Island! I could not ask for a better friend or supporter. You are a champion for the building trades and you deserve so much credit for all of the exciting development that’s happening back home in our small state.

And to my own local leaders: Michael Sabitoni, Tim Byrnes, and Scott Duhamel, thank you for everything you’ve done to strengthen Rhode Island’s middle class. We’re not done yet. Let’s keep going, and let’s keep building.

Rebuilding the Middle Class Deal
For decades, there was a deal in America: if you worked hard and did what was expected of you, then you could raise a family with dignity and security. You could own a home, save for retirement, help your children pay for school, and even take time to visit beautiful beaches like the ones we have in Rhode Island!

In recent years, though, that “deal” has come under attack. There are powerful forces in America that have been working to ensure that a privileged few do well, without any concern for what happens to American workers.

In my state, the building trades got crushed by the recession. As recently as 2012, nearly one out four Rhode Islanders in the building trades were unemployed. When I was running for Governor, I would talk to tradesmen and tradeswomen. They’d been out of work three months, four months, nine months, a year. They were losing their homes. Losing their marriages. Losing their pride.

We had to do something. Back in 2014, across Rhode Island, there weren’t any jobs for laborers, but there was so much work to do.

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School Construction Authority General Contractor Sentenced To 96 Months In Prison For Long-Running Scheme To Deprive Workers Of The Prevailing Wage

Posted by National Alliance for Fair Contracting on

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

Friday, April 1, 2016

Earlier today in Brooklyn federal court, Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), was sentenced to 96 months’ imprisonment, ordered to pay more than $1.3 million in restitution to the IRS, and ordered to forfeit to the government over $7.1 million in criminal proceeds, following his convictions on May 8, 2015, after a four-week jury trial, for mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges.

The convictions arose out of Nadeem’s leadership role in a long-running scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do. Nadeem’s co-conspirators Zainul Syed, Afzaal Chaudry and Irfan Muzaffar were also convicted at trial of various crimes for their participation in this scheme. Muzaffar was previously sentenced to 18 months’ imprisonment, and Chaudry was previously sentenced time served, following approximately ten months of imprisonment. Syed is awaiting sentencing. The sentencing proceedings were held before U.S. District Judge Brian M. Cogan.

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Sunshine Week: Beat reporter shines light on schools’ use of federal contracts

Posted by National Alliance for Fair Contracting on

By Robert Brauchle

March 16, 2015

 

Reporter Ryan Murphy began 2014 with a tip that Isle of Wight County Schools may have skirted federal regulations in the construction of the new Georgie D. Tyler Middle School.

Using the state Freedom of Information Act to access copies of contracts, emails and bid documents, the Daily Press Isle of Wight County beat reporter found that the school division had omitted wage standards from the construction contract that are required under the federal Davis-Bacon Act. The effect was to lower the cost of construction by underpaying local workers hundreds of thousands of dollars.

“I spent a couple of months digging into the documents and digging into legislation to figure out exactly what had happened,” Murphy said.

Murphy worked with school administrators to get the documents he needed.

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A.G. SCHNEIDERMAN AND D.O.I. COMMISSIONER PETERS ANNOUNCE ARRESTS OF NYC SCHOOL CONSTRUCTION AND HOUSING AUTHORITY CONTRACTORS AND LABOR BROKERS

Posted by National Alliance for Fair Contracting on
Contractors Allegedly Paid Workers Below Prevailing Wage, Labor Brokers Demanded Kickbacks On NYC School And Housing Construction Projects

FOR IMMEDIATE RELEASE: DECEMBER 4, 2014

(New York, NY) Attorney General Eric T. Schneiderman and New York City Department of Investigation Commissioner Mark G. Peters announced today the arrests and indictments of a contractor and two labor brokers overseeing New York City School Construction Authority (SCA) and Housing Authority (NYCHA) projects for allegedly underpaying construction workers. The arrests stem from a joint investigation into underpayment and kickback schemes on projects at P.S. 196K, a public school in Brooklyn, and the Pomonok Houses Project in Queens. As alleged in two indictments, several workers were deprived of several thousand dollars each from the alleged schemes. If convicted on the top counts, each defendant faces up to seven years in prison.

“Contractors who work on public projects cannot ignore New York State’s labor laws in order to line their own pockets,” said Attorney General Schneiderman. “In this case and many others, my office is taking aggressive action, including criminal prosecution when appropriate, to ensure that workers are paid the wages they’ve earned.”

“Not only does prevailing wage fraud deprive honest workers of fair pay, but it is a gateway to other schemes that endanger public safety. Exposing and putting an end to prevailing wage fraud is a cornerstone of DOI’s multi-pronged effort to combat corruption in New York City construction. I thank the Attorney General and his staff for their partnership on these important cases,” New York City Department of Investigation Commissioner Mark G. Peters said.

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