Another Voice: Benefits Add Hidden Costs to Prevailing Wage Projects

From The Buffalo News

By Brian Sampson

The May 10 article, “Expanding prevailing wage: a help to region’s fortunes, or hindrance?,” was well written and identified both sides of the issue. But the article didn’t mention an important factor, perhaps the most important, in the prevailing wage calculations: the excessive cost of the supplemental benefits tied to prevailing wage projects.

The cost of the benefit package is grossly out of line with the regular marketplace. For most employers, the cost of benefits (workers compensation, health insurance, retirement and statutory expenses) is somewhere around 25% to 40% of the cost of the salary.

For example, if someone is paid $50,000 annually, the cost of their benefits could range from $12,500-$20,000, depending on what the employer offers. But when looking at prevailing wage in New York, and in particular in Erie and Niagara counties, it’s a vastly different story.

When you examine the wage and benefits tables from the New York State Department of Labor, the numbers are staggering. A laborer classification in Erie County receives a wage of $29.61 per hour and the supplemental benefits are $25.70 per hour.

That means the cost of the benefits is 86% of the hourly wage. That’s more than double the highest average in private industry.

In Niagara County it’s even worse. A similar laborer will receive $26 per hour in wages and $38.06 in supplemental benefits. The cost of the benefits is 146% of the wage, quadruple that of private sector employers.

The unfortunate reality is, as taxpayers, we’re already paying these inflated benefits on traditional public work like roads, bridges, sewers, schools, etc. That’s a hefty burden to bear and is reflected in the poor quality of our infrastructure.

Yet now some would like us to place that same burden on private projects that need financial assistance. If our roads and bridges are bad, what do you think will happen to our private job market?

The negative impacts of the proposed law are very clear. Ulster County passed a law applying prevailing wage to private work supported by the industrial development agency about a decade ago. What happened? For two years, no one submitted a project to the IDA for consideration. Upon repeal of the law, projects flowed again.

Let’s not be fooled. Proponents of the expansion of prevailing wage are already doing great damage to taxpayers. They shouldn’t be allowed to ruin what little positive job growth we now have in New York.

It’s time for New York to follow its laws and reevaluate how it calculates prevailing wage.

Brian Sampson is president of the Empire Chapter of Associated Builders & Contractors.

Read more from The Buffalo News

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Ogdensburg City Council Votes to Award Wastewater Treatment Plant Contract, Lawsuit Considered by Contractors’ Group

By |September 11th, 2019|Categories: Albany, News|

OGDENSBURG — City Council unanimously voted to award a construction contract to Jett Industries of Colliersville for the $35.9 million wastewater treatment plant rehabilitation project, but also caught an earful from two separate parties skeptical about the process, Monday night.

Ogdensburg City Council Awards WWTP Project Bid, Despite Complaints From Non-Union Labor Representative

By |September 10th, 2019|Categories: Albany, News|

Ogdensburg City Council took a tongue lashing after accepting a $35.9 million wastewater treatment plant rehabilitation project bid from Jett Industries. Amanda Bertram, vice president of public affairs for the Associated Builders and Contractors, called the award shameful and told city councilors they should have heeded her warnings about entering into a project labor agreement just to please Gov. Andrew M. Cuomo.

Editorial — Too Hot to Handle: Labor Pact Didn’t Save Ogdensburg Any Money on Project Bids

By |August 29th, 2019|Categories: Albany, News|

“It’s not shocking, this is a pattern that we have seen with public works projects across New York state that are bid with project labor agreements,” Amanda Bertram, vice president of public affairs for the Associated Builders and Contractors/Empire State, said in a story published Saturday by the Times. “Across the board, they all come in millions of dollars over engineering estimates. This is a trend.” Associated Builders and Contractors is a national trade organization representing those in the construction industry who don’t belong to unions. Ms. Bertram met with City Council members in November to discuss the disadvantages of using PLAs.

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2019-05-22T13:28:06-05:00