This winter, New York has had two major construction scandals. In March, Related, the giant real estate firm building out much of the Hudson Yards office and apartment site on Manhattan’s West Side, sued construction unions, alleging that they inflated costs by more than $100 million, including fooling Related into paying up to $70 an hour for someone who fetches coffee.
The state Senate’s ruling majority coalition hopes state budget talks will include a “discussion about whether the definition of public work should be updated”—shorthand for whether costly union compensation packages should be imposed on a much larger number of projects subsidized directly or indirectly by taxpayers.
Governor Andrew Cuomo has married his unrealistic renewable energy targets to his push to steer work to the building trades unions. The likely results: even higher costs—and even fewer projects.
An Empire Center report last week noted that the state and local governments paid twice the 17 percent inflation rate for job compensation at public construction projects between 2007 and 2017. Thank New York’s “prevailing wage” law for that.
New York’s public building costs are the most expensive in the world partly because taxpayers are subsidizing skyrocketing pension and health care costs for the construction industry, according to a study released on Monday.
The state-mandated hourly compensation of construction workers on New York public works projects generally rose by double the 17 percent inflation rate over the past decade-but most of those added dollars did not boost workers' pay, according to "prevailing wage" schedules for major building trades.
New York state, its local governments and public authorities are committed to spending tens of billions of dollars on public works in the next five to 10 years. But under current law, they’re also committed to wasting billions of taxpayer dollars on public works — to subsidize the above-market compensation of the state’s shrinking but politically influential construction unions.
A fiscal watchdog group is questioning the state’s century-old prevailing wage law for construction workers, saying it unnecessarily costs taxpayers billions of dollars a year in added expenses for big road, bridge and other projects.