Opinion: Wage discrimination in construction industry makes minimum standards a good idea

PUBLISHED: August 30, 2017 at 11:49 am
UPDATED: August 30, 2017 at 5:32 pm

Equal pay for equal work remains elusive, even here in progressive California.

A recent study by Smart Cities Prevail showed that Latinos make up two thirds of the construction workforce, yet only make about 70 cents on the dollar of white workers with the same skills. The study noted that Latino construction workers also are significantly more likely to be uninsured and to struggle with housing affordability.
Low minimum wage standards are one factor that contributes to these types of disparities.

California legislators are soon expected to consider streamlining development of more housing across our state. At its core, the proposal involves removing certain regulatory hurdles in exchange for guarantees that a small percentage of new developments will include “affordable” units.

A similar effort failed last year when no agreement was reached on wage standards for workers on streamlined projects.

According to industry research, workers’ wages and benefits are just 15 percent of the total cost of constructing housing. By comparison, profits for developers and contractors are 18 percent of costs and growing faster than the cost of labor.

And with labor standards being eroded, other problems have become more pervasive.

For example, wage theft occurs when employees are paid for fewer hours than they worked, less than legally required, or when their employer is paying in cash and cheating on payroll taxes. California’s construction industry has seen a 400 percent increase in wage theft since the 1970s-a period that has also seen a dramatic increase in the share of immigrants in our construction workforce.

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Opinion: Writers offered bogus info for ‘answers’ to housing crisis (CA)

PUBLISHED: July 24, 2017 at 11:07 am
UPDATED: July 25, 2017 at 4:27 am

Too bad that John Gamboa and Herman Gallegos didn’t dig a little deeper before they did the bidding of greedy developer/speculators in their July 7 column on California’s housing crisis.

If they would have looked around in their own back yard in the Bay Area, they would have found some real research instead of having to regurgitate the misleading information that the California Center for Jobs & The Economy spoon-fed to them as a “study.”

A study it wasn’t. Instead, the center’s report cherry-picked a few numbers out of some tired old statistical abstractions to trash the idea of paying decent, middle-class wages to construction workers.
If Gamboa and Gallegos wanted real information, they should have checked with the Mountain View City Council, which in 2013 asked its staff to look into a real-world prevailing wage project. The city’s analysis determined that the use of the prevailing wage added 10 percent to the cost of a taxpayer-subsidized, 51-unit Franklin Street Family Apartments complex.

Mountain View’s staff report relied on numbers that came straight from the developer. Gamboa and Gallegos, on the other hand, lifted some of the most CCJE’s most ridiculous readings of the prevailing wage’s impact to predict outlandish rises in housing prices, rents and poverty. They got it wrong.

The bottom line on the prevailing wage is that the higher productivity of a highly-skilled and trained work force keeps added labor costs manageable – about 4 percent, according to the research of SmartCitiesPrevail.org. And that’s before you add in the social cost savings when construction workers and their families don’t have to obtain food stamps or MediCal to survive.

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Open Letter from City Leaders Calls for Prevailing Wages in State Housing Reforms

Thu, 18 May 2017, 17:53:20 EDT | Source: Smart Cities Prevail

SACRAMENTO, Calif., May 18, 2017 – In an open letter that ran as a full page ad in today’s Sacramento Bee, elected leaders from six of California’s eight largest cities called on California Governor Jerry Brown and the State Legislature to include prevailing wage standards in state housing reforms. The ad was paid for by Smart Cities Prevail (SCP).

The state Legislature is considering myriad ideas for reform. One that has generated a lot of push-back from the building industry is incorporating prevailing wage standards into more residential projects.

Smart Cities Prevail (SCP) is a non-profit research organization that focuses on wage policies and contracting standards in the construction industry. The ad was signed by a group of local elected officials from the cities of San Diego, Los Angeles, San Jose, San Francisco, Oakland, and Sacramento.

The ad references ongoing efforts to streamline more housing development – with several proposals under consideration to combat California’s persistent housing affordability crisis again this year.

“Real housing reform needs to do more than simply streamline more development,” the leaders write. “We need to promote investment in the people who are doing the building, and struggling to pay the rent in our communities.”

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Requiring higher wages would pay off in more home-building: Guest commentary

By Murtaza Baxamusa
POSTED: 04/28/17, 9:50 AM PDT


For the second straight year, the California Legislature is considering cutting red tape for developers and builders in an effort to encourage construction of more housing. This approach suggests that the state’s affordable-housing crisis is entirely the result of too many regulations and too much public input inhibiting supply.

Not exactly.

A recent study analyzing industry and economic census data by Smart Cities Prevail (SCP) revealed that it takes 13 percent more workers to produce residential housing today than it did 20 years ago. And while construction profits have increased 50 percent more than the cost of labor or materials, inflation-adjusted wages for blue-collar construction workers have actually decreased by 25 percent.

As the saying goes, you get what you pay for. And by leading a race to the bottom for productivity and wages, the industry has helped create California’s housing crisis.

If we truly want to solve this problem, this dynamic needs to change.

There are more than a million Californians who work in construction. Yet many working Californians simply don’t make enough money to afford a roof over the head of their family.

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Housing Affordability Prevailing Wage Standards Can Help Improve Housing Affordability


Alex Lantsberg, MCP, AICP

A brand new study by Smart Cities Prevail shows that linking prevailing wage standards with proposed reforms to streamline new housing development would close the affordability gap, save state and local governments tens of millions of dollars annually, and disproportionately benefit communities of color.

Overall, the study notes that it takes 13% more workers today to match the residential housing output that California enjoyed just twenty years ago. This steep decline in productivity has been matched by a 25% decline in inflation-adjusted blue-collar construction wages (the median wage is just $35,000 per year) and housing prices that have soared as high as 54% in the Bay Area.

“A productivity renaissance will be necessary to produce housing units in the numbers that will noticeably shave what Californians pay for housing,” said study author Alex Lantsberg. “Studies have repeatedly shown that the best way to realize that goal is by incorporating prevailing wage standards.”

Prevailing wage is a minimum wage for blue-collar construction work that reflects local market rates for different skilled crafts. Long associated with stronger economic outcomes and more local hiring, most research shows that prevailing wages have no significant impact on total project costs because they promote higher skilled craftsmanship. This triggers increases in productivity and efficiency as high as 15%, reduced reliance on taxpayer funded public assistance programs, and prevents workforce shortages by helping to fund the apprenticeship programs that are used to meet California’s construction workforce training needs.

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(Full PDF Copy of Study)

National Poll: Most Voters Support Prevailing Wage on Public Infrastructure Projects


“While voters may have disagreed on many issues this past November, they agree that prevailing wage laws should be preserved by a wide margin,” said pollster Brian Stryker. “Only 21% of voters want to eliminate prevailing wage laws-even after hearing a commonly referenced argument for doing so. And support for prevailing wage extends to large majorities of Democrats, Republicans, Independents and Trump voters.”

Construction is America’s fourth largest industry, and directly supports more than 6.6 million jobs. About a quarter of annual construction output, or $363 billion, is spent on government owned construction projects-including roads, bridges, schools, transit systems, water projects and municipal buildings.

Prevailing Wages are determined by surveys of existing market wage and benefit rates for skilled craft workers-such as carpenters, plumbers, electricians, ironworkers, cement masons, heavy equipment operators and others-in more than 3,000 communities across America. The Davis Bacon Act requires prevailing wage on most federally funded construction projects while about thirty states have laws requiring prevailing wages on state or locally funded projects.

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(See Poll Summary)

Berkeley Makes History With Wage Theft Ordinance

AUGUST 16, 2016

Last year, at the start of spring, 21 construction workers were hired by a local contractor to hang drywall for a 79-unit apartment complex in downtown Berkeley, California. The workers spent five months on the project, but when they finally wrapped it up, they still hadn’t received a dime from their employer.

They filed complaints with their local trade unions, which were able to pass the message up to the Labor Enforcement Task Force and Joint Enforcement Strike Force, two coalitions of state and municipal agencies that have appraised $4.2 million worth of unpaid wages in California since 2012. Their investigation led California Labor Commissioner Julie Su to place a lien on the contractor for $60,000, the total amount the workers were owed, three months after they left the job site.

For Todd Stenhouse, a spokesperson for the wage advocacy nonprofit Smart Cities Prevail, the state’s response marks a turn for the best in what might have been a tragic finish for those workers. But successes like this represent a drop in the bucket when it comes to the hunt for unscrupulous contractors.

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City of Berkeley Enacts First of Its Kind Wage Theft Prevention Ordinance

By Valerie Gotten – Jul 20, 2016

BERKELEY, Calif. /California Newswire/ – Last night, the City of Berkeley approved a first-of-its-kind local ordinance aimed at preventing wage theft on local construction projects, Smart Cities Prevail announced today.

Authored by Councilmember Laurie Capitelli, co-sponsored by a majority of the Council and supported by construction industry trade associations and workers’ rights groups, the measure requires that developers and builders certify that all contractors performing work on large projects have complied with state wage and hour laws as a condition of winning a certificate of occupancy from the city.

“Enforcing wage laws is especially difficult in the construction industry, because unscrupulous contractors who cheat workers in order to win bids on large projects find ways of disappearing after the work is done,” said Smart Cities Prevail Policy Director Scott Littlehale. “By expanding transparency and accountability BEFORE a project is complete, Berkeley has taken an important step towards preventing wage theft and leveling the playing field for honest construction businesses competing for this work.”

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State Prevailing Wage Laws Save or Create 400,000 Jobs in America


Posted by Frank Manzo IV
February 9, 2016

CONTACT: Todd Stenhouse, (916) 397-1131 or toddstenhouse@gmail.com

Chicago, IL – As policy debates rage in states from Michigan and New Hampshire to New Mexico and West Virginia, researchers from the Illinois Economic Policy Institute, Colorado State University-Pueblo, and Smart Cities Prevail have just completed the first ever national study on the economic, social, and project cost impacts of state prevailing wage laws.

Prevailing wage laws govern the wage rates paid to construction workers on government-funded public works projects.

The report, entitled “The Economic, Fiscal, and Social Impacts of State Prevailing Wage Laws: Choosing Between the High Road and the Low Road in the Construction Industry,” utilizes industry standard IMPLAN modeling software and industry comparisons between states with and without prevailing wage laws to assess the impact of these policies on a variety of economic and social factors: including job creation, wages, worksite productivity, rates of in-state contracting, impacts on taxpayers, reliance on government assistance programs, and effects on communities of color and veterans.

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(Report Fact Sheet)

(Full Copy of Report)