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California Court Deals Blow to Workers, Allows Charter City Prevailing Wage Exemption to Live On

CA Supreme Court Justices

In California, the State Supreme Court recently heard a case that would have required “charter cities” to obey statewide prevailing wage laws. Under current California law, the prevailing wage is not applicable to charter cities.

With a majority of the state’s largest cities chartered and thus suffering from unchecked wages, workers are being hurt statewide. The high court of California had the opportunity to right this wrong but instead sided with the cities and bucked the Building Trades Council which represents 131 local unions in California. The case centered around Vista, California, near San Diego, whose voters passed a .05% sales tax in 2006 to fund public works projects before becoming a charter city in 2007 to avoid paying prevailing wages on said projects.

The city argued state law doesn’t apply to charter cities, which have greater autonomy than general-law cities, according to the court.

The state’s 120 charter cities include the largest, such as Los Angeles, San Jose, San Francisco and San Diego, according to the League of California Cities.

The unions argued the prevailing-wage law is of statewide concern, giving the state primary legislative authority.

“The city responds that the matter is a municipal affair and therefore governed by its local ordinances,” Justice Joyce Kennard wrote for the majority. “We agree with the city.”

Voters passed the 2007 plan with a 67 percent majority, but dissenting justices continue to note the negative wage impact the charter city exemption has:

In dissent, Justice Kathryn Werdegar called the majority’s approach to the case “neither fair nor reasonable.”

“By failing to appreciate the full impact of the prevailing-wage law, the majority significantly undervalues the statewide economic concerns the law addresses,” Werdegar wrote.

A union spokesman, Sandy Harrison, said the ruling was disappointing.

“We had hoped that the court would understand that the downward pressure on wages in an entire region resulting from cities exempting themselves from the prevailing wage is very much a matter of statewide concern,” Harrison said in a statement.

Prevailing wage laws are meant to protect wages across the industry, not just for union workers or workers in a given region. Republicans argue that such laws are outdated, but it is difficult to argue that preventing unscrupulous contractors from underbidding on contracts only to make up the difference on the backs of workers is a concept with an expiration date.


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