Posts tagged prevailing wage

    Opinion: Construction Unions Face Fork In The Road: Shrink Or Seize The Moment

    February 16, 2024 // “This is the best shot the unions have had in decades,” said Joshua Freeman, a Queens College, City University of New York history professor. “There’s low unemployment, a sympathetic administration, an infrastructure ramp and sympathetic public attitudes. Lots of things are going in the right direction for unions.”

    Counterpoint: Davis-Bacon Requires Pork Spending, Costs Taxpayers Billions

    October 23, 2023 // The Davis-Bacon Act was passed in 1931 and was initially meant to counter a Depression-era practice of literally busing in workers from a lower-paying region so employers didn’t have to hire local workers who would not work for the wages being offered. This practice benefitted many workers, frequently African-Americans, who lived in poor regions with little work. Busing in unskilled labor is rarely a factor with the law, as most federal projects involve skilled labor. The present-day purpose behind the Davis-Bacon Act is to boost unions. The Labor Department’s Wage and Hour Division is the entity that surveys businesses and determines the prevailing wage for these types of projects. This wage mirrors what companies with collective bargaining contracts — union wages — pay their workers. Unions that drive up their members’ wages are thus protected from the economic consequences of doing that if their business involves federal contracts because non-unionized businesses will have to pay the same wages and, therefore lose any wage-price advantage. The AFL-CIO is one of the main boosters of the law, unsurprisingly.

    How YIMBYs won over unions in California

    August 22, 2023 // The Trades acknowledges there’s a shortage of workers for California’s needed residential construction, and they know their existing unionized workforce is getting older. A union-backed study from 2019 stipulated that to meet the state’s affordable housing goals, California would need to recruit at least 200,000 new workers. But the Trades insist things are not so dire yet that leaders need to abandon “skilled and trained” requirements, and they say more people will be incentivized to become “skilled and trained” only if lawmakers guarantee good union jobs waiting on the other end of an apprenticeship. About 70,500 people have graduated from these apprenticeships between 2010 and 2022, according to the California Department of Industrial Relations. In the end, California lawmakers didn’t really have to make a choice, and ended up passing Wicks’ bill, along with another similar bill that included the Trades’ preferred “skilled and trained” language. For now, developers basically can choose which law they want to follow if they want to convert strip malls to housing. (Yes, really.) “AB2011 was a huge victory, but they allowed the building trades to save face by passing both bills,” said David, the YIMBY activist.

    Biden’s New ‘Prevailing Wage’ Rule Will Cost Taxpayers, Benefit Unions, and Hike Inflation

    August 18, 2023 // Actually, the changes are a significant step backward. Biden is effectively undoing a major change made by the Reagan administration—changes that were made, fittingly, to help combat inflation. That change, made in 1982, repealed the "30 percent rule" that guided the process for determining what wages would be paid on which projects. Under the 30 percent rule, the prevailing wage for any particular area would be based on the highest wages paid to at least 30 percent of workers within the same area. You don't need an advanced degree in accounting to see how that mandate could artificially hike wages on federal projects. The government barred itself from even considering bids that might pay average wages, thereby obligating taxpayers to pay more than they might have had to in an open market.

    ABC: Final Davis-Bacon Rule Undermines Taxpayer Investments in Infrastructure

    August 9, 2023 // “The final rule comes in the midst of challenging economic conditions facing the construction industry, including high materials costs and a skilled labor shortage of more than half a million in 2023,” said Brubeck. “The onerous new requirements and artificial inflation of construction costs imposed by this rule will only exacerbate these headwinds and undermine taxpayer investments in infrastructure.” ABC submitted nearly 70 pages of comments on the DOL’s proposed rule, and its more than 50 significant changes, urging the DOL to withdraw the proposal. The 1931 Davis-Bacon Act and related regulations require contractors and subcontractors that perform work on federal and federally funded construction projects of $2,000 or more to pay a government-determined prevailing wage and benefit rate on an hourly basis to on-site construction workers. According to the DOL rulemaking, the Davis-Bacon Act and 71 active Related Acts collectively apply to an estimated $217 billion in federal and federally assisted construction spending per year—about 63% of all government construction put in place—and provide government-determined wage rates for an estimated 1.2 million U.S. construction workers. The Congressional Budget Office estimates that repealing the 1930s-era Davis-Bacon Act would save the federal government $24.3 billion in spending between 2023 and 2032. A May 2022 study found that the Davis-Bacon Act costs taxpayers an extra $21 billion a year, increases the price tag of construction projects by at least 7.2% and inflates construction workforce wages by 20.2% compared to local market averages if the DOL calculated prevailing wages using modern and scientific methodology via the U.S. Bureau of Labor Statistics.

    In Philly, VP Harris details new labor rules for federal construction projects

    August 9, 2023 // Vice President Kamala Harris, on Tuesday, visited Philadelphia to announce changes to labor rules that could give higher wages to construction workers on federal projects. At the headquarters of labor union DC 21, in Northeast Philly, Harris detailed the Labor Department's first update in decades to the Davis-Bacon Act of 1931, a law that requires the payment of prevailing local wages on public works.

    Biden Labor Department offers new rule on “prevailing wages” that is less accurate

    August 8, 2023 // “The Biden administration’s decision to turn back the clock on Davis-Bacon Act regulations to a Carter administration-era version will benefit a few well-connected unions while raising costs on taxpayers. The administration’s new rule will allow a survey of just a third of workers to calculate the ‘prevailing wages’ to be used when awarding federal contracts. It only takes a basic understanding of math to know that that 30 percent is not a majority and therefore cannot be said to be ‘prevailing’ in any common understanding of the term. Rather this new rule will allow for cherry-picked statistics that result in wage inflation, driving up the costs of those contracts.”

    A Union View from Inside

    June 20, 2023 // UA local unions not only suppress opportunities for nonunion workers but also seek to limit union membership to protect the high earnings of current members; in other words, the UA is doing the exact opposite of what it claims to do: instead of “protecting” workers, the UA intentionally excludes potential pipefitters from the labor market to limit supply and drive up prices. Worse, this exclusion means that less pipefitting work gets done. American industries processing steam, petrochemical, water, and other materials suffer from a loss of valuable skilled labor. Probably the best example of this policy of disenfranchisement is the pictured flier, which I saw inside the union hall. The flier claims that bureaucrats are trying to destroy the UA apprenticeship program. Of course, I was surprised to learn that apprenticeships would be targeted by politicians, since politicians usually support work and skill training regardless of political affiliation. As neither the flier nor the website directly referenced the bill in question, I did my own research. In June 2019, the Department of Labor proposed an expansion of apprenticeship programs, awarding $183.8 million to support the development and expansion of training programs. This included industry, employer, government, nonprofit and union training programs. The United Association told its members that union apprenticeships were being attacked. In truth, the DOL was merely seeking to expand apprenticeship options, including union apprenticeships.

    32 Knowledge Tracker How New York’s Democratic Socialists Brought Unions Around to Public Renewables

    June 20, 2023 // ince they did not initially have access to state-level union leaders, the DSA organizers started by building relationships with local utilities unions across the state. Public Power New York recruited hundreds of volunteers to help steer the victories of numerous DSA-endorsed state legislators in 2020 and 2022. One successful candidate was climate organizer Sarahana Shrestha, now a state assemblymember from the Hudson Valley. She unseated her long-tenured Democratic primary opponent, in part, by highlighting his opposition to the BPRA. The bill began to move in Albany in a real way when unions outside of the utilities sector, like the New York State United Teachers, the New York State Nurses Association, and the Service Employees International Union, endorsed the bill. Once the bill passed the state Senate in the summer of 2022, the utilities unions took a more serious interest in the plan. The BPRA’s labor provisions include prevailing-wage assurances and require that all the NYPA’s renewable projects include collective-bargaining agreements for every employee, including contractors and subcontractors. These agreements must be in place before work can start on a project. The law creates a $25 million just-transition fund to retrain fossil fuel–sector workers who could lose their jobs, and specifies that union leaders must be consulted in this process. It also prioritizes hiring these retrained workers for the NYPA’s renewable projects.

    A Bay Area homebuilder planned a project with union rules. Can it work anywhere else?

    May 9, 2023 // Developers are subject to state fines of up to $10,000 per month for each missing monthly compliance report. If a company is found to be skirting the “skilled and trained” standard entirely, the penalties can rack up much higher and much quicker: $200 per day “for each worker employed in contravention” of the rule.