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February 26, 2010

OPPOSITION TO

“Street Cutter” Prevailing Wage Bill

A.404-A (John) / S.632-A (Fuschillo)

       
A.404-A/S.632-A would mandate utility companies and their contractors to pay public works-related prevailing wage to all employees working on projects requiring street opening permits.  Moreover, the bill mandates that utility companies and their contractors employ only “competent workers,” which we believe is intended to block non-union contractors from working on such jobs.

Both provisions would have disproportionately negative impacts on small businesses and Minority and Women's Business Enterprises.  In addition, requiring utilities to pay “prevailing wages” will increase utilities’ cost of necessary infrastructure upgrades and repairs, and these increased costs will ultimately be paid by their business and residential customers. 

It is especially appalling that the legislature would consider burdening New Yorkers with more increased costs to their bottom lines after adding more than 100 new taxes, fees, surcharges and assessments totaling $8 billion during the 2009 legislative session. The imposition of wage mandates on these industries and their customers, already struggling with additional costs imposed by the state, including the 18-a surcharge in the 2009-2010 Executive Budget, and the proposed expansion of the local gross receipts tax, is ill-timed and will only further burden both the employers and the consumers. 

There is no compelling reason to treat these utility projects as “public works” for prevailing wage purposes. Prevailing wage rates are typically based on union contracts, and under existing law, the “prevailing wage” represents one of the final products of extensive negotiations between labor and management involving potentially dozens of wage and non-wage issues. To impose these negotiated wages into the increasingly competitive energy and communications industries will only to create upward pressure on consumer prices.

The bill would also mandate that utility companies and their contractors enter into agreements with the state, county or municipal entity specifying that only “competent workers” be employed on a project requiring issuance of a permit to use or open a street.  The determination that a worker is “competent” is one that is best made by the employer.  Furthermore, the bill incorrectly assumes that utilities do not already hire competent workers. This is inaccurate – utility contracts require the highest level or worker qualifications. Additionally, A.404-A/S.632-A provides no criteria as to what might constitute “competence” and fails to indicate when or by whom such judgments are to be made and enforced. It’s important to note that Section 220 relates to Public Works projects, whereas the utility and telecom industries are both highly competitive and largely private sector.

For these reasons, the Buffalo Niagara Partnership is strongly opposed to A.404-A/ S.632-A.