It seems hardly a day goes by without more news of New York taxpayers being squeezed by union-friendly laws. This time, it’s for government construction 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.

The law requires payouts that are generally above market rates, and it counts fringe benefits as “wages.” Notably, the report said, most of the increases in costs were for pension and health-care costs.

The result? Project price tags soared: “The law drives up building construction costs by at least 13 to 25 percent,” the center’s E.J. McMahon wrote. “The actual payments for fringe benefits alone have translated into hundreds of millions of dollars in added taxpayer cost.”

In the city, he reports, the building trades’ lowest-paid workers saw their hourly wages jump from $34.89 to $41.50 an hour — but their fringe benefits soared from $22.71 to $40.60.

In every region of the state but Long Island, benefits accounted for more than half the uptick. By comparison, at construction jobs nationally, fully three-quarters of the increase went to actual wages.

All this means more money from taxpayers, and fewer projects. But it also means more union political support and campaign donations for New York pols. And to them, it seems, that is what matters most.

You may also like

EDITORIAL: Cuomo’s latest ‘triumph,’ gold-plated at your expense

Gov. Andrew Cuomo’s latest economic development “triumph” is a deal to bring a high-tech chipmaker into the 450-acre Marcy Nanocenter outside Utica, where Cree Inc. will build a $1 billion plant with 600 skilled jobs at an average $75,000 salary. Read More

Business lobby opposes wage mandate

E.J. McMahon, research director of the Empire Center for Public Policy, estimated that expanding the prevailing-wage mandate in New York to all projects that get public support would boost construction costs significantly. In an essay published after the legislation was filed, McMahon argued the proposed expansion resembled a “costly protection racket” for New York’s “politically powerful labor cartel.” Read More

The labor movement’s push for farmworker rights

Fiscal conservatives fault the state prevailing wage requirement for driving up the cost of public infrastructure by double digits. A 2017 Empire Center for Public Policy analysis found the law “drives up total construction costs by 13% to 25%, depending on the region, which will translate into billions of dollars in added taxpayer-funded spending.” Read More

Expanding prevailing wage: a help to region’s fortunes, or hindrance?

But an Empire Center for Public Policy study estimated that the state's prevailing wage mandate would drive up the cost of publicly funded projects by at least 20 percent in the Buffalo area, compared to median private-sector construction wages. The study estimated the mandate led to increases of anywhere from 13 percent to 25 percent in the state, depending on the region. Read More

Lawmaker calls question about prevailing wage calculation a ‘deflection’

The Empire Center for Public Policy, a fiscally conservative think tank, has repeatedly highlighted the opaque process by which the state Department of Labor calculates prevailing wage in different regions and raised questions about the accuracy of the calculations. The group recently noted that the state “refused to publicly release copies of the construction union contracts and pay scales it uses as the basis for its prevailing wage calculation.” Read More

EDITORIAL: Prevailing wage leads to prevailing waste

Research has found that prevailing wage requirements increase the cost of construction. In New York, a 2017 report released by the Empire Center for Public Policy found that prevailing wage requirements inflated the cost of publicly funded construction projects in the state by 13 to 25 percent. Read More

Is there any way to build more for less?

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. Read More

Why it costs so much to build anything in New York City

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. Read More