Prevailing Waste - New York's Costly Public Works Pay Mandate

The cost of publicly funded construction projects in New York is inflated up to 25 percent by the state's outdated "prevailing wage" mandate, which requires contractors to pay workers the amounts required by union collective bargaining agreements. The Empire Center for State Policy Report was coauthored by E.J. McMahon, research director of the Empire Center, and Dr. Kent Gardner, principal and chief economist of the Center for Governmental Research.
The state-mandated pay levels are intended to apply only whenever unions represent 30% or more of workers in a given locality. Although census data indicate union membership falls short of the mark in much if not most of New York, the state Labor Department does not collect data verifying the threshold is being met. The law effectively saddles contractors both with higher wages & (particularly) benefits, but also with productivity-sapping union work rules—such as a requirement that highly paid operating engineers stand by to push the buttons on automated elevators used by other workers on a construction site.

Report Date: Apr 2017
Author(s): Kent Gardner , Michael Silva , Robert Zielinski
Subject(s): Economic Analysis , Public Finance
Location: New York State

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