4.2 billion reasons why prevailing wages kill affordable housing

The latest findings from the New York City Independent Budget Office confirm something most of us already knew: Paying construction workers prevailing wages would make it impossible to achieve the city’s affordable housing goals and create the jobs that go along with them.

Of course, the Building and Construction Trades Council of Greater New York is the only group questioning the IBO’s findings. The building trades are the only ones who gain from exorbitantly high labor costs that stifle development but put the remaining work solely in union hands.

The city’s building trade unions would rather cling to false rhetoric – but when it comes to their advocacy around being paid a prevailing wage, the proof is in the numbers.

The IBO found that prevailing wages increase construction hard costs on affordable housing by 28 percent – around $80,000 per affordable unit.

Overall, a construction prevailing wage mandate on Mayor Bill de Blasio’s plan to build 80,000 new affordable housing units would require a whopping $4.2 billion in additional public subsidies, according to the IBO.

So when they push for a prevailing wage mandate, the building trades are really saying they want New York’s taxpayers to spend an extra $4.2 billion for the same work that is already being done by other construction workers. Not only is this willfully naïve, it’s insulting to taxpayers to assume that funding will ever materialize.

It is also important to recognize exactly why costs increase so drastically under prevailing wage mandates. Contrary to the unions’ misleading characterization, this is not a “living wage” or “middle-class” issue. Prevailing wages go far beyond what any average New Yorker would consider to be middle-class wages.

For example, the area median hourly wage for a carpenter is $29.48. The prevailing wage for a carpenter is $50.50 – a 71 percent difference. Along with hourly benefits, that’s more than $195,000 annually. Prevailing wage and benefits on other trades, such as steamfitters and structural ironworkers, pay well over $220,000 annually.

The fact is that construction workers in New York are already securing good jobs and making solid middle-class (or better) wages, regardless of whether or not unions want the public to know that. But if construction costs shoot up by 28 percent, we’re going to see fewer developments built – and that will result in fewer housing units and jobs for the middle class.

Unfortunately, Gary LaBarbera and the building trades are already in the process of killing thousands of those middle-class jobs by derailing the 421-a program, which was one of the city’s most powerful engines for affordable housing construction. LaBarbera only seemed to care about those jobs if they were going to his friends.

When they’re faced with these facts, the city’s construction trade unions typically try to change the subject by claiming that prevailing wage mandates improve safety and quality on construction sites – contrary to any actual evidence of that fact.

The majority of deaths and accidents on construction sites in New York City occur on sites lower than 10 stories, not larger sites being built by merit shop contractors. So when LaBarbera and his cronies advocate for apprenticeship programs for developments 10 stories or more, what is that about? It isn’t about safety. It is simply about controlling construction jobs.

Do union-built sites provide better quality? The behavior of the city’s construction market indicates that they do not. More and more construction in New York City is being built non-union. Why? Because merit shop construction is quality work, is done safely, and comes in on time at a reasonable cost.

That is why merit shop contractors and workers are increasingly building the majority of affordable housing that New Yorkers are demanding all across the five boroughs. Their work is largely what has driven the success of the city’s affordable housing efforts thus far, and they will keep doing that safe and quality work as long as the demand exists.

And they’re not asking for another $4.2 billion in taxpayer money to do it.

Brian Sampson is the president of the Associated Builders and Contractors, Empire State Chapter.