The Problems With Prevailing Wage in New York State

July 31st, 2008

Let me start with an important notice and fact - ‘prevailing wage’ is not prevailing in the way that most people think of it. Miriam-Webster’s dictionary defines ‘prevail’ as:
To be frequent; predominant; continue in use.

Now for prevailing wage in New York State, the term prevailing just means the highest wage currently being paid. It is not the arithmetic mean, medium or mode. It is not a reasonable average or even an average of the highest-paid hourly rates. Typically these rates are determined by county, although there are some exceptions.

Rebecca A. Meinking, president of the Empire State (New York State) chapter of the Associated Builders and Contractors explains “Because prevailing-wage laws require payment of wages higher than those that actually prevail; the majority of local contractors who employ local workers, but who pay those workers a wage that is ‘market-driven’ as opposed to ‘union-driven,’ will be reluctant to bid on IDA [Industrial Development Agency] construction projects. That reduced competition will result in higher costs - plain and simple.” This quote was from Ms. Meinking’s article in the Opinion section of the Rochester Business Journal, published May 30, 2008. It was in response to James Bertolone and Frank Wirt, authors of a labor article published in the same journal on May 16, 2008.

For example: four plumbers are being surveyed for prevailing wage rates in Nassau county. These workers make $75, $80, $85 and $65 per hour during the time being studied. In this case, the prevailing wage is $85. This means that once the New York State Department of Labor (often abbreviated NYSDOL) sets the prevailing wage, that all non-union contractors must pay $85 per hour and not a penny less.

So wait, this means that companies can’t pay what they want to? Yes and no - company’s can pay a rate they determine to be appropriate. Using the case of plumbers again: John Doe’s plumbing company pays $50 an hour. However, and this is a big however - John Doe’s company must pay their $50 base rate AND a $25 fringe supplement, per hour, on public work.

Examples of public works project include: roadway, traffic signals, schools, libraries etc. Essentially anything that is going to be used by the public, and is being paid for in part or fully by public dollars. In this example, John Doe’s plumbing only pays their own rate of $50 on private jobs that do not require that prevailing wage be payed.

Hard to make sense of all this - welcome to prevailing wage laws and regulations in New York State!

Let’s take a closer look. Using John Doe’s plumbing again - why would they take public work? Well chances are they do, but they’re not happy about it. They likely go out of their way to do as much private work as possible, so that they can pay their rates and not ones mandated by New York State.

So why is this a problem? Hard workers should get paid well, and contractors and laborers work hard right? Well of course they do! As I type this article, hundreds of men and women are hard at work on a major local highway renovation here in my city. It is a five-to-six month job, and every day I see their hard work and progress. In no way to I want to disrespect the hard work these workers and workers like them do day-in and day-out.

This being said - this is a definite problem, and here’s why. There are two major types of contractors, union and non-union. Prevailing wage only applies to non-union contractors. Therefore, when these two very separate groups bid on the same project - their bids are sometimes drastically different. Union contractors can pay their workers whatever they want in order to submit a low bid and get a job. On the other hand, non-union contractors must always be cognizant of the prevailing wage rates in the counties they work in, and keep these in the front of their minds as they calculate their bids. More often than not, union contractors win out with significantly lower bids.

Compounding this problem, public works projects are often the most likely to go with the lowest bid, even if it means sacrificing quality. If a school were quoted $1.7M from a union contractor for a new parking lot, and $2.0M from a non-union contractor, most schools would be very hard-pressed to justify spending an extra $300,000 on the same job.

So how did this happen? Until 1931, union contractors were at a major disadvantage to their thriving non-union counterparts. The Davis-Bacon Act of 1931 was put into place by the federal government to level the playing field. During the depression, this made sense. Now that we are 77 years and counting from the implementation of the law, the table is so severely slanted in the direction of union contractors, one wonders how such a regulation has gone so long without any major amendments.

It should be noted that Davis-Bacon has been temporarily suspended on a number of occasions, most recently in 1992 following Hurricane Andrew and in 2005, following Hurricane Katrina. These suspensions during crucial recovery efforts add to the suspicion of the law’s effectiveness.
Potential solutions? Davis-Bacon needs to be re-examined and overhauled to reflect the economy of this century. If it is suspended during times of extreme need, why does it need to overly-tilt the business table in the favor of unions during times of economic calm? Prevailing wage regulations put non-union contractors at a disadvantage so severe that they struggle to keep their businesses alive. Something must change or economic development will come to a halt in New York State.

Special note: this article in no way paints a perfectly clear picture of prevailing wage laws and regulations in New York State. This is designed to serve as a guide and summary, and should be used for reference purposes only.

For the latest up-to-date information on Prevailing Wage in New York State, and issues relating to it, please visit http://labor.state.ny.us.

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The Immigration Fight Gets Ugly

July 30th, 2008

Atlantic Scaffolding, which employs nearly 400 at a Pascagoula -based Chevron refinery, has let go at least eight workers this month.

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Steel Industry - Before & After the Union

July 29th, 2008

Throughout this essay, I will describe the differences workers experienced in the steel industry “before the union” and “after the union.” In addition, I will discuss what I believe were the most important changes workers experienced.

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Detroit council moves ahead on plan to oust mayor

July 28th, 2008

The Detroit City Council says it is continuing its efforts to remove Mayor Kwame Kilpatrick from office.

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Steel Industry - Before & After the Union

July 27th, 2008

Throughout this essay, I will describe the differences workers experienced in the steel industry “before the union” and “after the union.” In addition, I will discuss what I believe were the most important changes workers experienced.

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Baylor president’s firing unrelated to past job

July 26th, 2008

Baylor University’s board chairman said today the firing of President John M. Lilley had nothing to do with alleged wrongdoing at his previous job.

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Is Your Carpal Tunnel Syndrome Condition Caused by Work?

July 25th, 2008

Is carpal tunnel syndrome caused by work? Well that is obviously a hotly debated topic among medical and legal experts. Different states have different workers compensation laws (work comp for short). Some states say that even if the person has a risk factor for carpal tunnel syndrome (CTS) or a pre-existing condition, and it can be shown that his work activities “aggravated” these conditions, which resulted in CTS, then the courts in these states typically rule in the patients favor. Other states are more strict and say you have to prove that CTS was actually CAUSED directly by work-related exposure.

The other part of the question of “Is carpal tunnel caused by work?”…is how do you prove an employee didn’t have CTS before coming to work for that company? With all the disability and privacy laws about medical records it’s difficult to get information unless the employee is honest and forthcoming; and sometimes the person may just not have realized they had signs and symptoms of carpal tunnel syndrome in the first place. Unless the employee was diagnosed with CTS, and the employee discloses this to his new employer it may be difficult to prove otherwise, until this information is brought out in court.

When the court tries to determine “Is carpal tunnel caused by work?”…they rely on information from doctors, surgeons, and EMG/NCS tests. Every carpal tunnel work comp case that I have been involved in, the patient has had at least one if not two EMG/NCS tests. They also must look at the employee’s previous work history and or any hobbies that may have contributed to CTS.

Again, the problem or question of “Is carpal tunnel caused by work” is difficult to determine if the employee didn’t have previous EMG/NCS tests to compare to the current tests.

Occasionally though, an employee will have had a previous evaluation or work-up for CTS and may have EMG/NCS tests. These are helpful, especially to your doctor, because it can help determine (along with history and exam) if the condition is getting worse or not.

It may help the court decide (also along with medical history) if the carpal tunnel symptoms you currently are having were caused by work or possibly caused by some other non-work related factor or medical condition that may need to be treated and before now the employee was unaware of his or her condition!

I hope this gives you some insight on whether carpal tunnel is caused by work or not. I always tell my patients to worry about yourself, your medical condition first!….Get properly diagnosed and treated, then worry about whether your carpal tunnel is caused by work or not.

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New disability regs prompt chorus of concern

July 24th, 2008

When people ask whether it’s accessible for the disabled, owner Jerry Doser says he jokingly tells them, “No, but I’ll paint some lines in the parking lot and put some cups out there and then you can play.” …

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The Union Debate - Are They Really Needed?

July 23rd, 2008

There are many who condemn companies like Wal-Mart which is not unionized, and although there have been attempts to unionize it, Wal-Mart remains free from union demands. Only about 9% of our population works union, and chances are we all pay a lot more for products and services because of that 9%. So, should unions be allowed to exist?

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Illegals Arrested Working Federal Job Site.

July 22nd, 2008

Marshall County authorities bust several illegal aliens working at a federally-funded job site.

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