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Feb
2013
28

California’s Pro-Prevailing Wage Bill, SB7, Enjoying Broad Support

In California, a bipartisan bill is being introduced by Senate President Pro Tempore Darrell Steinberg (D-Sacramento) and Senator Anthony Cannella (R-Ceres) that looks to strengthen the state’s prevailing wage laws. Senate Bill 7 would disallow charter cities from receiving state funds or assistance unless they have a prevailing wage law on the books. The bill addresses the problem of cities setting up charters to circumvent prevailing wage laws, only to use taxpayer money to hire contractors that pay low wages:

SB 7 would not apply to contracts under $25,000 and would prevent state funds from going to charter cities if,

1. The city has a charter provision or ordinance that excuses contractors from complying with the prevailing wage law on any projects; or
2. Within the current calendar year or prior two calendar years, the city has awarded public works contracts without including the specifications required by the prevailing wage law. SB 7 would not apply to contracts awarded prior to January 1, 2014, so the disqualification from eligibility to use state funding for construction would apply only going forward.

The authors of the bill have a wide base of support:

“Continuing California’s economic growth depends on creating more middle class jobs, especially in the construction industry that was hit so hard during the Great Recession,” said Steinberg. “Low wage contractors cut costs by cutting corners, but the data shows that they’re not saving public money. We can’t afford to shortchange workers and taxpayers by ignoring the economic net benefit of California’s prevailing wage law.”

“As a civil engineer and former mayor, I am proud to co-author SB 7. It is important that we close this loophole that allows certain firms to game the system. Those firms know that they can marginally undercut prevailing wage to win a contract,” said Senator Anthony Cannella (R-Ceres).

The Mayors of Los Angeles, Sacramento, and Long Beach have all come out in favor of Senate Bill 7.

Antonio Villaraigosa, Mayor of Los Angeles, said, “The City of Los Angeles has benefited for years from construction industry jobs and prevailing wages which support our focus on quality, efficiency and training in construction careers for the residents of Los Angeles. For this reason, I am supportive of Senate Bill 7 which focuses on protecting fair wages, quality construction and apprenticeship opportunities throughout California.”

Mayor of Sacramento, Kevin Johnson said “When we’re seeking bids for city construction projects, quality and value for our citizens and taxpayers is our priority. Paying prevailing wage addresses this concern. Making sure the workers on our projects are paid a fair wage strengthens our city’s and our region’s economy. I strongly support Senate Bill 7, as it clearly benefits the workers and taxpayers of Sacramento.”

“As Mayor of the City of Long Beach I support the prevailing wage because it ensures we have a streamlined, trained and highly-skilled workforce for building the public works projects that our City needs” said Long Beach Mayor, Bob Foster. “It also provides local residents with the opportunity to access skilled apprenticeship training programs that will eventually lead to middle class careers in construction, thus using our tax dollars to drive our own economy and providing value and assured quality projects that will last for decades. For these reasons I support SB 7.”

A study from Colorado State University measured the positive impact prevailing wage laws have on regional economies and employment numbers:

A 2011 Colorado State University study documented the use of prevailing wage in City of San Jose projects, which increased countywide economic activity by $164 million, increased local jobs by 1,510 and increased local tax revenues by $1.9 million over a five year period.

The same study also compared two Northern California public projects: Mitchell Park Library in Palo Alto, scheduled to open this spring and built without prevailing wage, which cost taxpayers $430 a square foot and with only 12 percent of the work going to local contractors; the similar-sized Gilroy Public Library, opened last year and built with prevailing wage, which cost taxpayers less at $326 per square foot and with 71 percent of the work going to local contractors.

The benefits of prevailing wages go beyond economic advantages for workers. They provide higher quality workers which ensures a quality finished product and help fund apprenticeship programs to bolster a well-trained workforce for the future:

Prevailing wage guarantees cities that expertly-trained local workers will build their projects. Without it, bidders are forced to cut corners on training and apprenticeships to get low bids. Quality suffers. California’s construction workforce is rapidly aging. We need a strong prevailing wage throughout our state to encourage young people to enter apprenticeships and tackle the next generation of infrastructure and public works.”

According to the office of Senate President pro Tempore Steinberg,

There are 121 charter cities in California, of which 70 require compliance with the prevailing wage law on municipal projects or allow the city council to require compliance with the prevailing wage law on municipal projects including: Los Angeles, San Jose, San Francisco, Sacramento, Long Beach, Oakland, and Bakersfield.

There are an additional ten cities whose charters allow the city council to require some compliance with the prevailing wage law on municipal projects, including San Diego, Fresno, and Anaheim. There are 41 cities whose charters are silent on issue including Modesto, Oceanside and Merced. The charters of Leemore, Norco, and Woodlake are the only cities that forbid the inclusion of prevailing wage specifications in public works contracts.

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