State lawmakers this week moved to make public construction more expensive in a bid to steer work to one of New York’s struggling construction unions.
A bill (S8334/A10626) approved by the state Senate yesterday would require companies on public work projects to pay the state’s “prevailing wage” to truckers hauling and delivering “aggregate supply construction material,” such as sand, gravel or other crushed stone. It would include time spent on “any return hauls, whether empty or loaded,” and “any time spent loading/unloading.”
The bill, sponsored by Senator Shelley Mayer (D-Westchester County) and Assemblyman Harry Bronson (D-Monroe County), passed the Senate by 43-17. The Assembly was poised to approve it late Thursday night, but the bill ultimately never made it to the floor for a vote.
Prevailing wage, of course, is a misnomer. It’s not just an hourly pay rate, but rather a combination of pay and benefit levels plus myriad overtime rules. And it’s anything but prevailing; the state and New York City entities that set the prevailing wage assume unions represent at least 30 percent of the workers in every trade in every region. That allows them to use union contracts as a proxy for the survey of wage and benefit levels the law requires. But federal census data show the unions represent a shrinking share of New York trades workers—far less than 30 percent statewide.
The Mayer-Bronson bill would essentially impose pay and benefit levels set in Teamsters union contracts on nearly every school, road, pipe and other infrastructure project at a time when both state and local tax revenues have cratered. But, as with other efforts to expand prevailing wage, the proponents’ main concern is giving unionized companies a leg up in bidding—in this case, by forcing more efficient competitors to match the Teamsters’ terms.
New York City would be hit especially hard, as the bill would require projects there to pay $87.91 per hour to dump truck drivers, with tractor trailer operators getting even more. In the already strained Southern Tier, the mandatory hourly pay would be $52.09, while Capital Region projects would have to shell out $53.28.
Higher costs wouldn’t be the only problem.
Setting an artificially high wage for drivers would change the economics around which material providers get used on public works jobs. The inflated transportation costs would instantly give more expensive suppliers a leg up if they’re closer to the work—which could advantage companies in Connecticut and New Jersey at the expense of upstate sources.
It’s not clear however if this scheme will withstand judicial scrutiny. For one thing, the Legislature would be regulating wages paid when drivers are in other states, which presents both practical and interstate commerce issues.
The prevailing wage law was written to set on-site pay for “laborers, workers and mechanics” based on the rationale that trades workers might come from elsewhere in the country and undercut local workers. Operating costs make trucking operations less mobile than individual carpenters or plumbers. In many cases those operations also are attached to a permanent physical facility, such as a quarry or processing plant.
Expanding the mandate to cover truckers in transit will test the constitutional language that authorizes the state’s prevailing wage law. The text is explicit about the wage reflecting “where such public work is to be situated, erected or used.” The prevailing wage law exists today because the constitution explicitly authorized the state to require inflated wages on public works jobs. Otherwise, the law might have been voided by courts long ago because it interferes with so many government functions. The trucking component may be a bridge too far.
So why are lawmakers doing this, now of all times? As E.J. McMahon has explained, the fervor to make New York’s prevailing wage law apply to more projects and more types of work is driven in part by the fact that many union pension plans are in bad financial shape. The prevailing wage helps neutralize the disadvantage unionized construction outfits face in competitive bidding.
The New York State Teamsters Conference Pension & Retirement Fund is less than 65 percent funded, and “is projected to have an accumulated funding deficiency within the next four years.” Teamster truck drivers in New York City today see more of their base hourly “pay” diverted into union-run benefit funds, like the retirement fund, than into their paychecks.
Teamster benefit funds elsewhere in the state were so underfunded that workers in Rochester and Syracuse actually saw their hourly cash pay shrink in real terms between 2008 and 2018. Benefit fund contributions ate up most of the overall wage growth. And the COVID-related shutdown of construction sites and other business operations has reduced fund contributions—making the Teamsters even more desperate for help from Albany.