A view of Fallkill Creek (Scenic Hudson image)

Adding a fresh chapter to the seemingly never-ending saga of government excess and regulatory insanity, New York’s state Labor Department reportedly will use federal emergency funds to pay $51.71 an hour to temporary workers hired to clean up Poughkeepsie’s Fallkill Creek, which was damaged last summer during the flooding brought on by Hurricane Irene.

Yes, that’s right: $51.71 an hour. The creek clean-up jobs apparently will be targeted to unemployed people in their late teens and early 20s, but it is unclear if they will be considered part of the New York Works youth employment program, which Rus Sykes wrote about here on Tuesday.

Assuming the job entails a 35-hour work week and will be done by the end of August, each participant earning $51.71 an hour will be paid $21,718 for 12 weeks’ work. For the same amount of money, the state could provide seasonal employment for 1,000 young people at the $7.25 minimum wage — and gotten the job done sooner, to boot.  Or, in the alternative, it might have employed the same number of people, paid them $10 an hour, and saved $219,000 a week.

However, it would be against the law to do it any other way, according to a state official quoted in this Mid-Hudson News account:

The program, to be operated by Nubian Directions in Poughkeepsie, will be funded with federal money channeled through the state and those summer jobs will pay $51.71 an hour, said the Labor Department’s Leo Rosales.

“It’s federal money involved, but because it is prevailing wage because it is work performed for public purpose, prevailing wage rates must be applied in these kinds of circumstances. As a result, you have to pay workers the prevailing wage rate for the locality,” Rosales said.

For the Mid-Hudson, the prevailing wage rate is $30.71 per hour with supplemental benefits of $21 per hour. Rosales noted that had the workers been members of unions, that additional $21 would go toward dues and training, but since they are not union, the summer workers will earn that total $51.71.

If you’re doing the math in your head, $51.71 does, indeed, equate to the same hourly rate earned by someone working a regular full-time schedule in a $100,000 a year job.

Even for government, this sounds too crazy to be true — and maybe it is. The website for the job placement agency, Nubian Directions, indicates the project is funded through the National Emergency Grant (NEG) program administered through the state Labor Department. Concerning wages, an NEG fact sheet states, in part, the following:

Total wages paid to a NEG worker cannot exceed $12,000, excluding the cost of fringe benefits. Wages must be paid at the higher of the Federal, state or local minimum wage, or the comparable rates of pay for individuals employed in similar occupations by the same employer.

The employer of record is also required to provide NEG workers the same benefit package provided to workers hired in comparable job titles. If the employer has different policies for temporary employees than for full-time employees, these policies may apply to NEG workers since the jobs under this grant are classified as temporary.

So, which government rules apply — New York’s prevailing wage, or the NEG guidelines described above?  Or is it a mix of the two, which would imply that those $51.71-an-hour laborers will hit the NEG wage maximum after about six weeks?

When we tried to get some answers from Robert Wright, president of Nubian Directions, he wouldn’t comment but referred us to Leo Rosales, the Labor Department’s communications director quoted by the Mid-Hudson News Service.  Asked about the apparent inconsistency of the NEG guidelines and the prevailing wage, Mr. Rosales sent us the following email response, reproduced here in its entirety:

The prevailing wage rate for laborers applies because workers will be performing public work, which is covered by Article 8 of the Labor Law.  The hourly prevailing wage rate will be $30.71 per hour + supplemental benefits of $21.

Stay tuned for more.

And for information on the overall impact of New York’s prevailing wage policies, see this excellent new study from the Center for Urban Real Estate at Columbia University, which will be the subject of future NYTorch posts.

About the Author

E.J. McMahon

Edmund J. McMahon is a senior fellow at the Empire Center.

Read more by E.J. McMahon

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