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CEO Supplies Resounding Endorsement of California’s SB7, the Pro-Prevailing Wage Bill

In California, Senate Bill 7 looks to end the practice of charter cities skirting prevailing wage requirements by making funds for public works projects available only if a city has a policy of requiring contractors to comply with the state’s prevailing wage law.

The common wisdom might indicate that labor would support the measure and business would oppose it, but in California the picture is not that clear. Among the supporters of SB7 are CEOs and business owners who believe that the quality work associated with prevailing wage jobs is the ultimate sign of their success. Among those CEOs is Mark Breslin of United Contractors, “California’s largest exclusively union-affiliated contractor.” Breslin has penned a resounding endorsement of SB7 explaining the positive effects the prevailing wage has on his industry:

The State of California instituted prevailing wage laws to ensure a stable platform for compensation, competition, quality, and the development of skilled workforces. While the majority of California’s Charter Cities promote and preserve prevailing wage standards, several California Charter Cities have attempted the elimination of prevailing wage requirements from city projects as a purported cost-cutting measure. This is a short-sighted effort where the costs far outweigh any perceived benefit. The elimination of the prevailing wage floor would allow contractors to lower their bid proposals by severely cutting employee compensation and eliminating benefits. Competition in the industry should be based on the way the work is executed, not how little you can pay people and get by.

Breslin goes on to suggest that the statistics cited by prevailing wage opponents are not based in reality.

Opponents of prevailing wage are fond of citing a prospective 30% savings by elimination of prevailing wage. Those who make this argument are either misled or deliberately misleading. Elimination of prevailing wage is simply not a significant area for prospective savings; in fact, just the opposite. According to the 2007 Census of Construction, the average total labor cost on public works projects in California is about 22%. That means we would need to eliminate every single worker on every project to achieve those projected savings. Maybe it’s just me, but clueless does not seem credible. And having zero workers on a job does not move it along very well.

In many instances, lowering local standards on prevailing wages can lead to an influx of out-of-state workers on construction sites. This results in a weakened local economy as money flows out of the community instead of staying within. Safety standards are often hampered as well which increases the burden on government programs to support the injured. Breslin touches on some of the unseen costs — i.e. those not directly effecting the immediate bottom line — that come with lowering prevailing wage standards in the name of taxpayer relief.

• — Prevailing wage standards discourage unscrupulous contractors who are known to cheat on payroll taxes, employ low-skilled workers and shirk health and safety requirements on the job site.

• - Under-qualified workers and unsafe work environments can create a far greater risk in terms of sub-par construction, worker injuries and even fatalities. Some states see injury rates rise as much as 20% or more.

• - Workers who earn minimal wages are frequently pushed into relying on government subsidies for healthcare, housing and other social services.

As business interests across the country continue to push politicians to dismantle prevailing wage laws it is important that the public knows what is truly at stake. Quality — not only of the final product but of the life of a region’s workforce — is at stake. When wages are depressed, everyone (except the contractor devoid of standards who can underbid everyone) suffers. Prevailing Wage laws provide protections from exploitation, point blank.


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