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.

State and local governments paid double the 17 percent inflation rate to cover “prevailing wage” costs for union construction workers on public works projects from 2007 to 2017, said the report by the Empire Center for Public Policy.

A lot of those funds covered fringe benefits, which zoomed even for laborers — the building trades’ lowest- paid workers — from $22.74 to $40.60 an hour.

By comparison, wages for those same workers jumped from $34.89 to only $41.50 an hour.

In New York, fringe benefit costs now account for 41 percent of prevailing wage compensation, double the 20 percent for all private construction workers, the study said, citing U.S. Labor Department data.

“The law effectively provides a taxpayer bailout of under-funded union pension and retiree health care plans,” said Empire Center’s E.J. McMahon.

“The law drives up building construction costs by at least 13 to 25 percent….the actual payments for fringe benefits alone have translated into hundreds of millions of dollars in added taxpayer cost.”

Under state law, contractors bidding on government-funded building projects must abide by the prevailing wages for union contracts– which includes fringe benefits as well as wages.

On average, 56 percent of the increase in prevailing wage compensation covered supplemental or fringe benefits over the past decade for all 228 job titles in metro areas.

Last year, a survey by Turner&Townsend found that New York City was the most expensive city in the world for construction, boosted in part by the Big Apple’s average $100-an-hour wage for construction workers.

You may also like

Editorial: Cuomo’s problematic Medicaid maneuvers

“It’s everything that’s wrong with Albany in one ugly deal,” Bill Hammond, a health policy expert at the fiscally conservative Empire Center, told The Times. Read More

Gov. Cuomo’s Lawsuit on Pres. Trump’s Tax Cuts Dismissed

But according to the Empire Center, a non-profit group based in Albany, the overall impact of the Trump tax cuts actually benefited most state residents. Read More

More New Yorkers covered by health insurance: report

An analysis by Bill Hammond of The Empire Center for Public Policy said the continued drop bolsters the case against the Albany Legislature passing a new law imposing a state government-run health insurance, which Democratic candidates for president are pushing for on a national level. Read More

Comptroller warns of financial distress at the MTA, and the MTA goes on a hiring spree

According to Ken Girardin, a labor analyst at the right-leaning Empire Center for Public Policy, every new police officer will cost the MTA roughly $56,000, which means the new personnel would initially cost the MTA roughly $28 million a year. Those costs should rapidly increase over time, as police salaries rapidly increase. Read More

What Cuomo’s executive order on vaping will and won’t do

“If you have these really young kids and teens getting hooked, then that’s not good," said Bill Hammond, director of health policy at the Empire Center for Public Policy. "But the first step would be to do some research, have a public hearing, get the best expert evidence that you have. Instead of reacting to headlines, find out what’s really going on and proceed with proposed regulations.” Read More

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

Medicaid bungle cost state $102 million over 4 years

“A little series of mistakes in a program this big can add up to a lot of money in a hurry,” Hammond told The Post. “A quarter of a million dollars is a lot of money. It’s important that the auditors are looking at this and are pointing to things that could be fixed.” Read More

New York City Hopes to Ease Strain on Its Emergency Rooms

Another hurdle is whether the new program can live up to the idea of universal health care, said Bill Hammond, a health-care analyst at the Empire Center, a conservative-leaning New York think tank. New Yorkers already had universal access, he said; the problem is how it is used. Health officials are rightly “trying to fix the delivery system,” said Mr. Hammond; meanwhile, the mayor, “made it sound like they’re fixing the coverage system.” Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.