Thoughts on labor, unions and prevailing wages (OR)

Posted by National Alliance for Fair Contracting on

I’ve come to my support of labor, unions and prevailing wages in several ways.

Theresa Kohlhoff
Thursday, August 29, 2019

Labor Day signals the end of summer, kids going back to school, my birthday, late season harvests and barbecues. This Labor Day, given the PERS vote in the legislature and the LO council goal to advocate against our state prevailing wage law, as the sole dissenter on the council to this “goal,” I wanted to also make some observations about the significance of the holiday itself.

Oregon’s prevailing wage law, “Little” Davis-Bacon Act, is modeled after the federal law. The statutory purposes are progressive: “To ensure that contractors compete on the ability to perform work competently and efficiently while maintaining community-established compensation standards; to recognize that local participation in publicly financed construction and family wage income and benefits are essential to the protection of community standards; to encourage training and education of workers to industry skills standards and to encourage employers to use funds allocated for employee fringe benefits for the actual purchase of those benefits.”

If a public works project – e.g. schools, roads, pipelines and other public facilities – is going to cost over $50,000, LO must pay prevailing wages. These wages are generally, but not precisely, the rate that union workers get paid in a particular geographical area and are set by the Bureau of Labor and Industries. So for example, the prevailing rates for a public contract in the Portland metropolitan area will generally be higher than, say, in Eastern Oregon.

On the other far end, non-union, non-prevailing wage construction workers may be paid at a cheaper rate, and with or without benefits. Touted as choice and freedom for the worker, it is touted as fiscal responsibility: Paying the differential between the two rates – prevailing and non-prevailing – is denounced as a waste of tax payer money.

I disagree.

If one only focuses on the cost of prevailing wage labor in public contracting versus cheaper non-prevailing wage labor, the economic analysis completely overlooks equal or greater cost savings and the major benefits derived from prevailing wage – to the public entity, to the worker and to the community. Note: I am not advocating for public projects that are beyond our means, or for disregarding prudent budgeting. Raw cost to taxpayers obviously matters. It’s just that true costs have to include far more economic and community factors than just the one criteria: cheapest contract bid. One only has to look at the dismal prospects of our youth as the dark cloud of income inequality and the gig economy reveals who is benefitted by the squeeze and who is gasping from being squeezed.

I’ve come to my support of labor, unions and prevailing wages in several ways. For one, I’ve had practical experience as a lawyer representing a private contractor doing major projects in five states.

He preferred to use union labor and continues to support a strong union.

He got better ratings and therefore cheaper insurance. He was rewarded with an enhanced reputation, even in a fast moving environment, for getting jobs done well and on time. Nothing in this world is perfect but to this business owner the extra labor cost was really minimal when the issue was considered as a whole.

Research confirms and expands these observations. For example, see www.smartcitiesprevail.org/benefits-prevailing-wage/. A union construction worker earns as much as 17% more, lowering the poverty rate by 30%; worksite injuries and fatalities are reduced by as much as 18%; apprenticeships for veterans and POC are expanded by 40%; unfair competition from employers cutting corners on safety/quality is reduced; job productivity is improved by as much as 20%; up to $367 million is saved on food stamps and tax credits. Every $1 of prevailing wage produces $1.50 for the economy! Is this not the way to opportunity? Is this not the way to have confidence and NOT scare ourselves into recessions? The way to build/rebuild a vibrant, resilient, capable middle class that benefits and supports the entire community? I certainly think so.

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Could Gov. Newsom’s ambitious housing goals be sidelined by a worker shortage? (CA)

Posted by National Alliance for Fair Contracting on

Labor think tank says California would need at least 200,000 new construction workers

By LEONARDO CASTAÑEDA
PUBLISHED: January 14, 2019

Gov. Gavin Newsom has said he wants to build as many as 3.5 million new houses by 2025 to solve California’s housing crisis.

But those ambitious goals could be derailed without hundreds of thousands of new construction workers needed to dramatically accelerate the pace of California home building, even assuming that cities agree to zone for more housing and there’s money available to build it all. And it’s hard to imagine, given recent trends, where that many additional workers in the low-wage, high-risk industry would come from.

Newsom took an early stab at the money question in his first budget, offering $500 million in state funding for middle-income housing, But he wants California’s companies to take on a bigger role funding new homes. And he said he’s already talked with some Silicon Valley tech companies who are open to cooperating.

Ramping up housing construction from about 100,000 units in 2016 to 1980s levels – about 300,000 new homes were built in 1986 – would require some 200,000 new workers, according to the researcher behind a new study for Smart Cities Prevail, a pro-union nonprofit. But even that influx of workers wouldn’t be enough to meet the goal of 500,000 new houses a year that Newsom floated during his campaign.

“Workers are not going to fall out of trees,” researcher Scott Littlehale said.

Littlehale’s study found that California housing construction isn’t just failing to attract new workers. It’s losing the workers it already has, many of whom are low wage and lower-skilled.

From 2006 to 2017, California lost about 200,000 construction workers. And within the construction trade, many workers are opting for commercial building jobs, which pay more, have better benefits and steadier work.

During the boom building years, the construction industry was “dependent on young workers without a college degree and on immigrant workers,” Littlehale said. Today, both populations are on the decline.

(Read More)

(View PDF of Study – Rebuilding California: The Golden State’s Housing Workforce Reckoning)

Prevailing wage and collective bargaining boost labor market competitiveness and productivity

  • The housing industry currently lacks the wage competitiveness and career training pipeline needed to offset the physical and economic risks of construction. This is hindering its ability to attract and retain the workers needed to increase production of new units.
  • Prevailing Wage standards and collective bargaining agreements are consistently associated with higher wages, increased apprenticeship enrollment, more production efficiency, and fewer workplace safety problems.
  • Most peer reviewed studies have concluded prevailing wage has no significant effect on overall project costs.

Housing builders’ reservoir of low-wage, less-skilled labor is not refilling itself. Background regulations that promote labor-management cooperation around the vital elements of skilled construction workforce development can play a vital role in restoring California residential building to the production engine that it once was.

(Executive Summary)

(Rebuilding California – Video)

Smart Cities Prevail Launches Multi-State Campaign On Prevailing Wage Laws

Posted by National Alliance for Fair Contracting on
TV and online effort will reach California and New Mexico

Source: Smart Cities Prevail
Wed, 23 May 2018, 16:21:14 EDT

SACRAMENTO, Calif., May 23, 2018 (SEND2PRESS NEWSWIRE) – Smart Cities Prevail today released a series of new TV advertisements on prevailing wage laws, part of a multi-state public information campaign launching in California and New Mexico.

“HT Tran” tells the story of an Iraq War veteran who came home after being wounded in combat to found the award winning general engineering firm Anvil Builders.

“I wouldn’t be alive today if all the guys I served with took shortcuts,” Tran says. “Taking care of workers doing dangerous and difficult jobs here at home is no different than taking care of soldiers in the army. Prevailing wage is an investment in well-trained local professionals who know how to get the job done right the first time.”

Research has shown that prevailing wage laws disproportionately impact veterans, because they work in construction at higher rates than non-veterans.

“Rebuilding America” highlights the important role that prevailing wage laws play in promoting local hiring and higher quality workmanship on schools, roads and other public projects. Research consistently shows that prevailing wage laws improve the economy and help generate more local middle-class jobs without increasing overall project costs.

“While the well documented economic and community benefits of prevailing wage have been long-validated by respected economists and earned these laws broad bi-partisan support, they are often not well understood by the public at large,” said Smart Cities Prevail spokesman Todd Stenhouse. “This campaign isn’t just about facts and figures – it’s about telling the story of what is at stake and who is really impacted by these laws. More often than not, it’s you or someone you know.”

Established in the 1930’s, prevailing wage laws establish the local market minimum wage on different types of skilled construction work. Typically, the wage includes a base wage, benefits and training contributions – based on surveys of workers performing similar jobs in the community.

(Read More)

Prevailing wage crucial for construction workers

Posted by National Alliance for Fair Contracting on

BY SAMANTHA DRAPER
POSTED 02.20.2018

It is sadly ironic that portions of the construction industry have been fighting for years to reduce wages on these important but dangerous jobs are now claiming they face a skilled labor shortage.

Just last year, California’s housing industry spent millions of dollars lobbying against minimum labor standards in any part of the residential construction sector. Even though research shows that construction labor represents a paltry 15% of total housing construction costs, they tried making the mathematically absurd claim that paying their workers enough to pay the rent -even in exchange for less red tape on certain projects – would somehow make California’s housing affordability crisis worse.

Some California contractors talking about labor shortages were trying to convince California municipalities to become “charter cities” so they could circumvent prevailing wage rules.

But they haven’t been the only ones.

Since 2015, five U.S. states have repealed their prevailing wage laws – laws that establish minimum wages for different skilled crafts on publicly funded projects and promote privately financed training programs that are designed to prevent skilled labor shortages. Other states are considering following suit, even though labor represents just over 20% of the total cost of public works projects – a historically small and declining share in what constitutes fully one-third of all output in America’s fourth-largest economic sector.

(Read More)

Opinion: Wage discrimination in construction industry makes minimum standards a good idea

Posted by National Alliance for Fair Contracting on

By HILDA L. SOLIS
PUBLISHED: August 30, 2017 at 11:49 am
UPDATED: August 30, 2017 at 5:32 pm

Equal pay for equal work remains elusive, even here in progressive California.

A recent study by Smart Cities Prevail showed that Latinos make up two thirds of the construction workforce, yet only make about 70 cents on the dollar of white workers with the same skills. The study noted that Latino construction workers also are significantly more likely to be uninsured and to struggle with housing affordability.
Low minimum wage standards are one factor that contributes to these types of disparities.

California legislators are soon expected to consider streamlining development of more housing across our state. At its core, the proposal involves removing certain regulatory hurdles in exchange for guarantees that a small percentage of new developments will include “affordable” units.

A similar effort failed last year when no agreement was reached on wage standards for workers on streamlined projects.

According to industry research, workers’ wages and benefits are just 15 percent of the total cost of constructing housing. By comparison, profits for developers and contractors are 18 percent of costs and growing faster than the cost of labor.

…

And with labor standards being eroded, other problems have become more pervasive.

For example, wage theft occurs when employees are paid for fewer hours than they worked, less than legally required, or when their employer is paying in cash and cheating on payroll taxes. California’s construction industry has seen a 400 percent increase in wage theft since the 1970s-a period that has also seen a dramatic increase in the share of immigrants in our construction workforce.

(Read More)

Opinion: Writers offered bogus info for ‘answers’ to housing crisis (CA)

Posted by National Alliance for Fair Contracting on

By ROBBIE HUNTER |
PUBLISHED: July 24, 2017 at 11:07 am
UPDATED: July 25, 2017 at 4:27 am

Too bad that John Gamboa and Herman Gallegos didn’t dig a little deeper before they did the bidding of greedy developer/speculators in their July 7 column on California’s housing crisis.

If they would have looked around in their own back yard in the Bay Area, they would have found some real research instead of having to regurgitate the misleading information that the California Center for Jobs & The Economy spoon-fed to them as a “study.”

A study it wasn’t. Instead, the center’s report cherry-picked a few numbers out of some tired old statistical abstractions to trash the idea of paying decent, middle-class wages to construction workers.
If Gamboa and Gallegos wanted real information, they should have checked with the Mountain View City Council, which in 2013 asked its staff to look into a real-world prevailing wage project. The city’s analysis determined that the use of the prevailing wage added 10 percent to the cost of a taxpayer-subsidized, 51-unit Franklin Street Family Apartments complex.

Mountain View’s staff report relied on numbers that came straight from the developer. Gamboa and Gallegos, on the other hand, lifted some of the most CCJE’s most ridiculous readings of the prevailing wage’s impact to predict outlandish rises in housing prices, rents and poverty. They got it wrong.

The bottom line on the prevailing wage is that the higher productivity of a highly-skilled and trained work force keeps added labor costs manageable – about 4 percent, according to the research of SmartCitiesPrevail.org. And that’s before you add in the social cost savings when construction workers and their families don’t have to obtain food stamps or MediCal to survive.

(Read More)

Open Letter from City Leaders Calls for Prevailing Wages in State Housing Reforms

Posted by National Alliance for Fair Contracting on

Thu, 18 May 2017, 17:53:20 EDT | Source: Smart Cities Prevail

SACRAMENTO, Calif., May 18, 2017 – In an open letter that ran as a full page ad in today’s Sacramento Bee, elected leaders from six of California’s eight largest cities called on California Governor Jerry Brown and the State Legislature to include prevailing wage standards in state housing reforms. The ad was paid for by Smart Cities Prevail (SCP).

The state Legislature is considering myriad ideas for reform. One that has generated a lot of push-back from the building industry is incorporating prevailing wage standards into more residential projects.

Smart Cities Prevail (SCP) is a non-profit research organization that focuses on wage policies and contracting standards in the construction industry. The ad was signed by a group of local elected officials from the cities of San Diego, Los Angeles, San Jose, San Francisco, Oakland, and Sacramento.

The ad references ongoing efforts to streamline more housing development – with several proposals under consideration to combat California’s persistent housing affordability crisis again this year.

“Real housing reform needs to do more than simply streamline more development,” the leaders write. “We need to promote investment in the people who are doing the building, and struggling to pay the rent in our communities.”

(Read More)

Requiring higher wages would pay off in more home-building: Guest commentary

Posted by National Alliance for Fair Contracting on

By Murtaza Baxamusa
POSTED: 04/28/17, 9:50 AM PDT

 

For the second straight year, the California Legislature is considering cutting red tape for developers and builders in an effort to encourage construction of more housing. This approach suggests that the state’s affordable-housing crisis is entirely the result of too many regulations and too much public input inhibiting supply.

Not exactly.

A recent study analyzing industry and economic census data by Smart Cities Prevail (SCP) revealed that it takes 13 percent more workers to produce residential housing today than it did 20 years ago. And while construction profits have increased 50 percent more than the cost of labor or materials, inflation-adjusted wages for blue-collar construction workers have actually decreased by 25 percent.

As the saying goes, you get what you pay for. And by leading a race to the bottom for productivity and wages, the industry has helped create California’s housing crisis.

If we truly want to solve this problem, this dynamic needs to change.

There are more than a million Californians who work in construction. Yet many working Californians simply don’t make enough money to afford a roof over the head of their family.

(Read More)

Housing Affordability Prevailing Wage Standards Can Help Improve Housing Affordability

Posted by National Alliance for Fair Contracting on

STUDY: LINKING PREVAILING WAGE STANDARDS WITH HOUSING REFORMS WOULD CLOSE AFFORDABILITY GAP

Alex Lantsberg, MCP, AICP

A brand new study by Smart Cities Prevail shows that linking prevailing wage standards with proposed reforms to streamline new housing development would close the affordability gap, save state and local governments tens of millions of dollars annually, and disproportionately benefit communities of color.

Overall, the study notes that it takes 13% more workers today to match the residential housing output that California enjoyed just twenty years ago. This steep decline in productivity has been matched by a 25% decline in inflation-adjusted blue-collar construction wages (the median wage is just $35,000 per year) and housing prices that have soared as high as 54% in the Bay Area.

“A productivity renaissance will be necessary to produce housing units in the numbers that will noticeably shave what Californians pay for housing,” said study author Alex Lantsberg. “Studies have repeatedly shown that the best way to realize that goal is by incorporating prevailing wage standards.”

Prevailing wage is a minimum wage for blue-collar construction work that reflects local market rates for different skilled crafts. Long associated with stronger economic outcomes and more local hiring, most research shows that prevailing wages have no significant impact on total project costs because they promote higher skilled craftsmanship. This triggers increases in productivity and efficiency as high as 15%, reduced reliance on taxpayer funded public assistance programs, and prevents workforce shortages by helping to fund the apprenticeship programs that are used to meet California’s construction workforce training needs.

(Read More)

(Full PDF Copy of Study)

National Poll: Most Voters Support Prevailing Wage on Public Infrastructure Projects

Posted by National Alliance for Fair Contracting on

By SMART CITIES PREVAIL

“While voters may have disagreed on many issues this past November, they agree that prevailing wage laws should be preserved by a wide margin,” said pollster Brian Stryker. “Only 21% of voters want to eliminate prevailing wage laws-even after hearing a commonly referenced argument for doing so. And support for prevailing wage extends to large majorities of Democrats, Republicans, Independents and Trump voters.”

Construction is America’s fourth largest industry, and directly supports more than 6.6 million jobs. About a quarter of annual construction output, or $363 billion, is spent on government owned construction projects-including roads, bridges, schools, transit systems, water projects and municipal buildings.

Prevailing Wages are determined by surveys of existing market wage and benefit rates for skilled craft workers-such as carpenters, plumbers, electricians, ironworkers, cement masons, heavy equipment operators and others-in more than 3,000 communities across America. The Davis Bacon Act requires prevailing wage on most federally funded construction projects while about thirty states have laws requiring prevailing wages on state or locally funded projects.

(Read More)

(See Poll Summary)