Some unions are fighting for a new minimum wage for construction workers

from Ben ChristopherCalMatters

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When is a minimum wage increase of more than $11 an hour actually a pay cut?

This question dominates the current debate California Housing Account it has split the state’s two most powerful construction worker unions and many state legislative Democrats unwilling to get on the wrong side of either group.

House Bill 1751, authored by Fullerton Democrat Sharon Quirk-Silva, would remove regulatory barriers to the construction of townhouses — tightly clustered, multi-story homes. In exchange for this speedy approval process, townhouse developers will have to pay their workers at least $28 an hour.

This is a significant pay increase compared to the state minimum wage of $16.90.

But the fiercest opposition to the bill came from what might seem like an unexpected source: The State Building and Construction Trades Council, an umbrella organization that represents electricians, plumbers, sheet metal workers and other skilled construction unions.

The trades – as the council is colloquially known – argue that the new wage floor could have the paradoxical side effect of reducing “prevailing wages“, which many of their members enjoy. Prevailing wages are mandatory minimum rates for publicly funded or assisted construction projects, which include many affordable housing projects and other projects pushed forward by a recent state law in California. State and federal regulators set prevailing rates based on surveys of the most common wages in each field and geographic area. Because union pay scales can cover hundreds of workers in similar employment, these union-level wages often set the prevailing wage.

In a heated debate on the floor of the Assembly earlier this month, Quirk-Silva emphasized — repeatedly — that the bill would in no way affect state-set wage rates.

“It’s not a substitute for the prevailing wage,” she said. “It doesn’t undercut the prevailing wage. This bill leaves the prevailing wage right where it is in current law.”

Deals isn’t buying it, noting that the federal government sets its own rates for federally supported projects. But the group’s larger conflict may come down to precedent.

For years, the construction trades fought any legislation aimed at easing regulations on new home construction unless it also included pro-union guarantees. These are either prevailing wage requirements at the union level or, in recent years, even more restrictive.”qualified and trained” rules that require developers to hire graduates of apprenticeship programs, the majority of whom are union members.

Quirk-Silva’s City House streamlining bill institutes a new standard: a minimum wage far below what most members of the trade already make.

Raising the modest minimum wage to the new bone the pro-housing bills throw construction workers would “signal the new normal,” said Chris Hannan, president of the Trades Council. “When you start a trend of doing minimum wage, then that becomes the new solution.”

Again the crafts and carpenters

Standing on the other side of the debate, supporting the new wage standard, are the California carpenters’ unions.

Trades that struggle with carpenters are a famous fight in Sacramento. This isn’t even the first time groups have publicly opposed this particular wage proposal.

Last summer, Assemblywoman Buffy Weeks, an Oakland Democrat and a longtime ally of carpenters, inserted laborer housing construction minimum wage between $28 and $40 an hour in the budget bill in the final hours of the fiscal year. Except for high-rise construction projects, where the use of steel and concrete typically attracts more skilled workers, unions represent relatively few workers who build California homes, the carpenters argued at the time. The new pay standard would be a modest adjustment for those non-union workers whose current wage threshold is the state minimum wage.

For years, carpenters’ union leaders have argued that improving labor standards for low-wage workers represents “opportunity to organize” for the union.

Deals were apoplectic. Dozens of union members gathered at the budget bill hearing to denounce what they saw as an anti-union reversal of state labor policy. One representative likened the measure to Jim Crow laws. Many labor-minded Democrats on the committee backed down; the motion was shelved.

This year, the idea was given a little more time for debate, although traders and some lawmakers still complain about what they see as a rushed process.

When the Quirk-Silva bill was introduced in early February, it focused solely on the townhouse provisions. The wage language was only added in time for its second committee hearing in late April. (Quirk-Silva’s team declined to make her available for an interview to explain that delay or to discuss the bill as a whole, citing personal family matters. On the floor, she explained the late addition in part by noting “severe health issues” among staff and family members.)

Since then, all legislative debate has focused on the issue of wages.

This in itself is a remarkable development: The bill exempts the development of townhouses from both environmental review and the jurisdiction of elected local city councils and planning boards. Just a few years ago, such a proposal would have resulted in a capital-shattering, headline-grabbing battle. But a year after Gov. Gavin Newsom signed it into law freeing up most urban housing the development of environmental litigation, land use implications appear to be an afterthought.

In an Assembly vote last month, San Diego Assemblyman Chris Ward called the minimum wage issue “the 900-pound gorilla.” He, like many Democrats who spoke on the bill, said he supported the legislation as a whole, but that he remained cautious about “unresolved” questions about how the new wage rate would affect existing labor standards.

The bill needed 41 of 80 yes votes to enter the Senate. He passed with only 47.

Increase or decrease in wages?

Quirk-Silva’s office tried to sidestep the prevailing wage fight at first.

Prevailing wages are required for publicly funded works, including many affordable housing projects. They are determined by the California Department of Industrial Relations, which sets its rates based on the most common salary for any type of work in any region of the state.

The Quirk-Silva bill specifically prohibits the State Department from considering the new $28-an-hour townhouse wages when making those calculations, lest a glut of townhome builders inadvertently reduce the wages owed to union roofers and plumbers.

Merchants are not happy with this discount. This is because the federal government conducts its own wage surveys and sets its own prevailing wages for federally funded infrastructure projects.

The current prevailing federal salary required for a roofer in Sacramento, for example, is $46.73 per hour plus benefits. This number is based on the most common salary for that job in the area or — if at least 30% of the workers in the survey are not paid the flat rate — the regional average.

“The federal government is not going to care what this bill says,” Scott Vetch, a lobbyist for the union’s affiliated unions, said during a hearing on the bill in April. “And they will set the prevailing wage rate for all trades at $28.”

Trade “has an argument” in that argument, said Kevin Duncan, an economist at Colorado Pueblo State University who has studied the effect of prevailing wage policies on construction costs. Imagine a smaller market with a relatively low union rate. If the bill uncorked a geyser of contractors paying all their low-wage workers exactly $28 an hour, “that would be the prevailing rate — and with zero benefits,” he said.

Supporters of the bill dispute that, saying such a specific outcome is unlikely given how many contractors are likely to use this particular townhouse bill. They also argue that vanishingly few residential roofers perform federal public works jobs in Sacramento — or anywhere in California — so changes to the prevailing federal wage for housing projects aren’t likely to affect many workers anyway. Instead, most roofers are not unionized on privately funded projects, and many earn less than $28 an hour, said Danny Curtin, director of the California Council of Carpenters.

To say that raising those wages “will actually reduce everybody else’s wages defies understanding,” he told the hearing.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.