After a new report concluded developers are likely to save money by using union labor on private prevailing wage projects, LaborPress reached out to representatives from construction trades unions to discuss the role that prevailing wages play in the public construction sector.
Angelo Angelone, President of the Concrete & Cement Workers District Council, recently introduced a panel discussion on the report that Cornell University’s School of Industrial and Labor Relations authored.
“As representatives of men and women working in the concrete industry in NYC, We recognize the pivotal role that prevailing wage laws play in safeguarding the rights of workers and ensuring fair compensation and upholding the principles of equity and justice,” he said.
LaborPress got the opportunity to speak to Eddie McWilliams, executive director of the Laborers-Employers Cooperation and Education Trust and an affiliate of the concrete workers union, about the promise and importance of enforcement of prevailing wage laws for the construction trades unions.
Prevailing wage is what determines the rate for wages, benefits and overtime that the state sets at the county-level every year on publicly funded projects. In New York prevailing wage laws have existed since the late 1900s, predating The Davis-Bacon Act, a federal law passed in 1931 that governs federal projects and provides regulations for state laws. In order to set rates, the state Department of Labor works with localities to base them on a combination of local wages and collective bargaining agreements.
The purpose of the laws is “to level the playing field for responsible contractors in a given area so that they wouldn’t be undermined by another employer who exploits labor, right? That’s the bottom line with prevailing wage,” said McWilliams.
As the Cornell report concluded, prevailing wage laws often give unions a competitive edge in bidding for construction contracts due the comprehensive benefits packages they provide for their workers. If non-union workers do not provide comparable benefits packages, they’re required to pay any worker a supplemental rate that would cover the extra cost of benefits.
But despite this advantage for unions, there are still industries where union contractors are struggling to win state contracts. McWilliams said that within New York City, union labor has a strong foothold on certain types of projects like those initiated by the city’s School Construction Authority or the Department of Design and Construction. But that doesn’t extend across the board.
“Where it involves housing, supportive housing, there’s a lot of non-union developers and contractors in that market. It’s a very difficult market. They are institutionalized through the New York State Affordable Housing Association and other professional organizations,” he said.
What accounts for non-union firm’s success winning certain types of public contracts? The data suggests that it could be a combination of material costs, underbidding or worker misclassification.
“A lot of it is through misclassification. Not reporting the total number of hours worked, paying people under the table. When I say misclassification, I mean they’ll pay people the lowest wage possible, say that of a laborer while they’re doing other work, like say, carpentry or iron work,” McWilliams said.
Union contractors have called for stronger enforcement of prevailing wage laws to prevent this type of fraud. Though there are gaps in enforcement across the city and state, McWilliams gave Manhattan District Attorney Alvin Bragg’s office credit for leading the way in creating a special task force to address the issue.
McWilliams made the argument that it’s in the interest of the state government to enforce prevailing wage law, especially around benefits because if employers can skirt around providing them for their workers, the cost gets shifted to the state.
“Over the years now, we’ve seen a shift where, particularly in construction and development of housing — residential housing, including affordable housing — they’ve been shifting the responsibility or the cost, of healthcare and those other supplemental benefits back onto the taxpayer, right?” he said.
