While lawmakers have focused their attention elsewhere, representatives of the construction industry have continued to highlight their opposition to prevailing wage requirements. These rules mean that contractors have to pay workers a minimum pay rate while working on publicly funded construction projects. Some have blamed such requirements for making construction in New York so expensive. A 2017 report from the Empire Center for Public Policy stated that prevailing wage requirement increase costs on public construction projects by as much as 25 percent.
The state-city deal to bring one of Amazon’s two new headquarters to Long Island City might at least have provided New York City with another big benefit—a much-needed model of advanced, efficient building practices. After all, Amazon isn’t just a big corporation: It’s widely admired as a global leader in technological innovation.
Instead, it appears the deal will ensure that Amazon is saddled with the same arcane and outmoded construction-union work rules and compensation levels that have saddled New York City with the nation’s highest urban construction costs.
A private charity is seeking the New York Legislature’s go-ahead to build housing for critically ill kids and their families on state-owned property.
The Legislature’s answer: sure, you can go ahead and build—if you’re willing to pay extra (possibly a lot extra) to our union friends to do the work.
On the whole, New Yorkers can breathe a sigh of relief if the state Senate’s gridlock forces an early end to the 2018 regular session of the Legislature. Otherwise, the next two weeks will still leave plenty of time for lawmakers to get up to no good.
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.