California Forum

Prevailing wage laws didn’t cause housing crisis. Attacks on them are about greed.

In this Aug. 16, 2017, photo sheet metal worker Benjamin Voget prepares to install a gutter on a home under construction in Sacramento. Some contractors blame the shortage on laws requiring that they pay “prevailing wages” on affordable housing projects. Unions vehemently disagree. (AP Photo/Rich Pedroncelli)
In this Aug. 16, 2017, photo sheet metal worker Benjamin Voget prepares to install a gutter on a home under construction in Sacramento. Some contractors blame the shortage on laws requiring that they pay “prevailing wages” on affordable housing projects. Unions vehemently disagree. (AP Photo/Rich Pedroncelli) AP

Years ago, as ironworkers in downtown Los Angeles built some of the tallest skyscrapers west of the Mississippi River, our union crews proved the point of the prevailing wage: You get what you pay for.

Ironworkers come out of our 4-year apprenticeships ready to work. Take a look at the Library Tower, at Fifth and Hope, all 73 stories of it. At the peak of our production, we erected 240 columns and I-beams a day. They were massive pieces of steel, and it was tough, hard work, and we got fairly paid for it.

The bosses had alternatives to choose from in the labor market. But they knew that the untrained crews, even though they worked as hard as they could and matched us as far as effort goes, just didn’t have the same skills or the same training. When they were put to the test, they’d be lucky to make 40 pieces a day, even though they were working six to a crew at ground floor while we were five to a gang and 50 stories in the air.

The truth about the prevailing wage is that it adds only a very small amount to overall projects costs – about 3 or 4 percent. Another truth is that if you cut construction workers’ pay by half or more you are going to be plunging them and their families into poverty.

In the end, the contractors on the Library Tower – now known as the U.S. Bank Tower, and still an L.A. landmark – knew the truth. You can’t build greatness on the cheap.

As we celebrate Labor Day 2017, the same laws of construction industry math still apply. When contractors want to build the best in the least amount of time, they have to hire the best. Even if it costs you more on the front end, you make it up in added productivity and by not having to make costly fixes on the back end.

This year, we are celebrating the 86th year that paying the prevailing wage has been the law when federal dollars are used to build dams, freeways, hospitals, bridges, courthouses and the like. This is also the 80th year the law has been on the books in California, for the same types of public infrastructure projects.

At its most basic, the prevailing wage is the common hourly rate that prevails on any given trade in any given local area. The rate is determined by state officials based on their surveys of regional pay scales negotiated between construction trades and private employers.

The idea behind the prevailing wage is simple: Contractors who bid on these projects should not be able to win them by bringing in and abusing workers from right-to-work states where wages have been driven into the ground.

It is a fair system, and it has enabled construction workers – more than 400,000 of whom we represent in the State Building and Construction Trades Council – to maintain their foothold in the middle class at a time when most other blue-collar industries in the United States have withered into extinction.

Unfortunately, some builders and contractors are fighting to kill the prevailing wage. We know that greed is their reason.

They launched their most recent attack this year at the same time that the Legislature came back into session with the California agenda brimming with bills to fund and streamline the construction of new affordable housing.

On cue with the lawmakers’ return to Sacramento, some commentators and editorial writers protested the inclusion of prevailing wage provisions in the affordable housing legislation. They claimed that the state could build more affordable housing if only we could get rid of the prevailing wage.

This is an argument that plays right into the hands of the forces of greed. The lamentable fact is that any savings that unscrupulous developers and contractors can bleed out of labor will wind up in their pockets in the form of profits.

The truth about the prevailing wage is that it adds only a very small amount to overall projects costs – about 3 or 4 percent. Another truth is that if you cut construction workers’ pay by half or more you are going to be plunging them and their families into poverty.

Then they’ll need food stamps and rent subsidies, and maybe one of those phantom apartments that developers say they’d be able to build if only they could cut their workers’ wages.

As we celebrate our holiday honoring work, our country is facing a major challenge on the issue of labor. Along with our infrastructure, the spirit of millions of our people also is cracking. Indeed, it is the deplorably low wages being paid to most American blue-collar workers that greatly contributes to lack of affordability for housing.

It’s a choice that we as a society need to make, to let the working people of this country know that they have not been abandoned. There is no better way than by letting them know that if we pay the bills, they will get a fair wage.

Robbie Hunter is president of the State Building and Construction Trades Council of California. He can be contacted at info@sbtc.org.

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