CA 'Charter Cities' Undercut Prevailing Wage Laws in Race to the Bottom

Mark Breslin Pro SB7 Prevailing Wage

In a recent op-ed for the Modesto Bee, Mark Breslin, CEO of San Francisco-based United Contractors, explains why he favors California’s SB7, a bill which would make charter cities eligible for public funds if they would only follow prevailing wage guidelines.  

In recent years, anti-union groups have supported ballot initiatives throughout the state that designate cities as charter cities specifically to avoid paying prevailing wages on public works projects.  In doing so, they push “race to the bottom” tactics that seek to lower wages in the construction trades despite the personal, jobsite, and community benefits associated with paying prevailing wages.

Breslin’s defense of the prevailing wage is compelling:

Prevailing wage laws were first passed in California decades ago in order to ensure a fair platform for compensation, competition, quality, and development of skilled workforces. Though most Charter Cities and all General Law Cities in California pay prevailing wages on local construction projects, some Charter Cities have exempted prevailing wages in a shortsighted effort to save money, but the true costs outweigh any perceived benefit.

Further, out-of-state lobby groups have recently mounted an effort — city by city — to encourage local leaders and politicians to place charters on the ballot in order to eliminate prevailing wage. They promise savings of as much as 30 percent on projects. The lobbyists making these arguments either don’t know what they are talking about, or they are being deliberately misleading.

According to the 2007 Census of Construction, labor costs on public works projects in California only amount to about 22 percent of total costs. Their claims lose all credibility in light of the fact that you would have to eliminate all workers on a project to save the amount they propose. Wishful thinking and empty promises won’t get the job completed on time.

Cities that eliminate these good jobs and replace them with low-paying jobs with no benefits may incur other costs that might not be obvious at first. Research shows that lower wage standards on local projects are likely to shift costs to the public by shifting the burden of healthcare from the employer to the taxpayer.

As California attempts to meet the infrastructure needs of its expansive population, prevailing wages are increasingly important to the region’s workers, their families, and the taxpayer who will ultimately be left on the hook for benefits and safety protections fly-by-night contractors do not provide.  SB7 is a response to lobbying attempts by contractor associations who wish to change California law for the worse.  According to Breslin, SB7 is what is best for honest business:

California has long been a state where our infrastructure has been built by workers who are highly skilled, well trained, and paid a wage that can keep their families in the middle class. In our industry, like many others, we have to balance the quality of the work versus what it costs to get the job done. SB7 is an important step towards that balanced approach, and it is being done in such a way that even some of the toughest CEOs and business leaders in the community can, and should support.

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