Dems Spike Prevailing Wage Reform

JAN. 5, 2012


As work in the California Assembly began for 2012, on Wednesday the festive mood quickly was quashed. In the first committee hearing of the New Year, the Assembly Labor and Employment Committee killed two bills by Assemblywoman Shannon Grove, R-Bakersfield,  AB 987 and 988. The bills would have reformed and updated state prevailing wage laws.

A prevailing wage mandates a certain payment to workers for government projects. It’s designed to prevent non-union contractors from underbidding union contractors.

Grove’s bills would have changed the calculations for prevailing wages, and allowed local governments to determine their own prevailing-wage policies.

“The reforms in these bills are bold and significant steps to reviving our dire economy and putting Californians back to work,” Grove said.  “Forcing citizens to pay amounts for projects beyond what the local free market would otherwise dictate is a misuse of taxpayer dollars.  Unfortunately, the powerful union interests benefit at this taxpayer expense.”

But discussion of the free market went nowhere in the committee hearing.

The state prevailing wage, initially designed only to impact public projects, has crept into many developments that most people would consider private, such as home construction or business expansion.  Grove sought to repeal many of these provisions, as well as modify the way prevailing wage rates are determined.

In a free market, wage rates will vary based on many different conditions. Grove said that the state’s method for calculating prevailing wage rates results from collective bargaining agreements. “No longer will prevailing wage rates in urban coastal areas apply to rural inland areas,” Grove said of her reforms.

Labor Opposition

“Should we actually trust contractors to pay a good wage?” asked Cesar Diaz, deputy legislative director at the State Building and Construction Trades Council, a group opposed to Grove’s bills. “Prevailing wage has helped the middle class.”

At the hearing, all of the opposition to Grove’s bills came from labor union representatives. Most of the opposition claimed that, if the prevailing wage laws were modified, private employers would only pay minimum wage. “The result would be lower paid, less skilled workers,” said Sara Flocks, public policy coordinator at the California Labor Federation. “We need to level the playing field for workers.”

But Grove was adamant that the bill does not repeal the prevailing wage.

Jobs Leaving

Because of the state’s current methods of calculating construction wage rates and determining where these rates apply, Grove explained that Kern County and other rural areas in California are losing private and public construction jobs, as well as jobs in private commercial and industrial development.

“The artificially increased cost of state-mandated construction wage rates plays a substantial role in this economic crisis,” Grove said.  “There is no reason why residents in Kern County should have to pay the same for public works as those in San Francisco or Los Angeles. These bills would have given local governments the right to decide what their own prevailing wage rates should be given their cost of living and local market conditions.  However, shown by today’s vote, the Democrats seem content with big-government policies that hinder economic growth and private sector job creation.”

“It’s a total gutting of prevailing wage laws,” said Assemblyman Luis Alejo, D-Salinas. “It’s been around for the last 80 years to protect middle class jobs.” Alejo explained that “the shrinking middle class needs the prevailing wage to be maintained and preserved so they can afford mortgages, afford to send their children to school, and afford to pay their bills. It’s just part of the cost of doing business in the state and is a fair cost.”

Kevin Dayton, with Associated Builders and Contractors, the bill’s sponsor, told committee members that most of the modifications to the prevailing wage laws were added during the Gray Davis administration, and actually have nothing to do with employee compensation.

“Currently, contractors are required to pay state-mandated construction wage rates to workers engaged in various occupations allegedly related to public works construction,” explained Rob Smith, Grove’s legislative director, after the hearing. “The definition of public works has been expanded in recent years to include numerous kinds of privately built projects that most reasonable Californians would not consider to be government projects.”

The hearing took a strange turn when Assemblyman Mike Allen, D-San Rafael, asked how much discussion went on before the hearing with organized labor. “You are talking past one another,” Allen said.

Dayton answered that Associated Builders and Contractors had been at battle with organized labor since 1950, when the organization was founded. “The statute was pieced together over the years. However, some people recognize that it needs updating,” Dayton said.

Free Market Concerns

“Your bills go too far,” Assemblywoman Mariko Yamada, D-Davis, told Grove. “I have concerns about free market forces. We need certain standards for public works projects. These false dichotomies don’t serve us well going into the New Year.”

Assemblyman Warren Furutani, D-Los Angeles, called the fight between labor and the private sector “trench warfare.” He asked, “How normal is it for some company to make these kinds of profits while workers take less? Is it normal for workers to take less so someone else can take more?”

Assemblyman Mike Morell, R-Rancho Cucamonga, challenged Furutani’s comments. “These are basic economic principles. You can’t spend more than you earn,” Morell said. “Less regulation means free markets.” Morell said people are leaving California for states with “crappy weather and bugs,” for lower tax rates and less regulation. “You want the facts? Those are the facts.”

Assemblyman Sandre Swanson, D-Oakland, the committee chairman, called employees “equal partners” with employers. “You can’t work them harder for the lowest wage. There’s a cost to doing business.”

Both bills failed to pass committee on a 5-2, party-line vote.


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  1. CalWatchdog
    CalWatchdog Author 5 January, 2012, 10:10

    This is another Coastal California Tyranny over Inland California. It’s absurd to believe that prevailing wage laws in Coastal California, where everything is more expensive and wages higher, should prevail in more rural, inland California. Time to split up the state.

    — John Seiler

    Reply this comment
  2. Bobnormal
    Bobnormal 5 January, 2012, 10:51

    And it came to pass, I’ll be leaving my home for Colorado in ten days, this time probably for good. I shall miss my view of Cucamonga peak, and my hometown Ontario,
    P.S. I have a good job waiting for me, thank God

    Reply this comment
  3. Beelzebub
    Beelzebub 5 January, 2012, 12:57


    You couldn’t have picked a prettier state to move to. Colorado suffers from some liberalitis too – but doesn’t have nearly the magnitude or scope of problems that we face in California.

    The pendulum still has a ways to go. When enough producers like you flee the state while the leeches multiply – the laws of math will eventually catch up restoring sanity through tough love. When there are 3-4 leeches for every producer it will either force big change or we will turn into the likes of Nicaragua and completely lose our sovereignty.

    Good luck, Bobnormal. Stay in touch.

    Reply this comment
  4. working stiff
    working stiff 5 January, 2012, 13:10

    do people check facts before they open their mouths or is the oxycontin flowing out of fox news and right wing radio simply inducing a know nothing stupor? prevailing wages are set by county & region and coastal rates are indeed different than inland. its no wonder why right wingers have to rely on their super-minority veto to thwart any progress in this state rather than articulating a political position grounded in reality. sheesh.

    Reply this comment
  5. OffRockfield
    OffRockfield 5 January, 2012, 13:45

    I am in the same boat as Bobnormal, except my job opportunity happened last November.
    I shall miss my views of the Conejo Valley and my residence for the last 18 years, Oak Park.
    I think that ratio has already been reached long ago, Beelzebub, and I don’t think the big changes you speak of are going to happen – I fear that the third-world environment you mentioned with the attendant loss of sovereignty is already entrenched.
    What a pity, because I’ve loved California all my life, but don’t see a good future that’s worth the risk of passing up the opportunities that are available here where the winters are a bit colder…

    Reply this comment
  6. OffRockfield
    OffRockfield 5 January, 2012, 13:47

    Assemblyman Mike Morell is correct…we are leaving because we don’t want to pick up the tab for the freeloaders….

    Reply this comment
  7. junior
    junior 5 January, 2012, 16:04

    “(Prevailing Wage) is designed to prevent non-union contractors from underbidding union contractors.”

    Actually not, PW is designed to assure a level playing field. Otherwise the work would be done by truckloads of underpaid workers from Alabama.

    Reply this comment
  8. HombreLibre
    HombreLibre 5 January, 2012, 17:53

    Sacramento Central Planning (a.k.a. the Retard Chamber) wants to keep Big Labor lapping up the gravy at the expense of the dwindling, fleeing Cali taxpayer.

    Eventually, there will not be enough tax money for the state coffers due to there being more takers (public doles) than givers (taxpayers). Then what? Taxing people for leaving the state? Don’t laugh…

    Reply this comment
  9. Beelzebub
    Beelzebub 5 January, 2012, 17:59

    “I think that ratio has already been reached long ago, Beelzebub, and I don’t think the big changes you speak of are going to happen – I fear that the third-world environment you mentioned with the attendant loss of sovereignty is already entrenched”

    No, there are still enough taxpayers in Cali to carry the leeches – whether we’re talking about the $100,000 plus gov pension swine, the illegal invaders (who cost us $20+ billion each year), the Octo mom types who flock here to drop their litters on the taxpayer dime, the familes of perpetual welfare recipients who are not required by law to work for their money like in most other states (CA has about 12% of the nation’s population and 33% of the nation’s welfare recipients (gee, I wonder why???). When enough producers flee CA the math won’t work anymore, offrockfield. It will result in a CA bond market dislocation and force the overlords to balance the system with massive cuts – or CA will simply secede to Mexico.

    Reply this comment
  10. Barb
    Barb 6 January, 2012, 06:44

    Im n full agreement with Mr. Seiler, split the state in two, three, or four! The state is in disaster mode and unsustainable

    For those leaving, may you find happiness and more freedom for which is your God given right! But please, stay in touch and help us fight on!

    Reply this comment
  11. Capitalist Pig
    Capitalist Pig 6 January, 2012, 13:05

    The whole argument that wage controls(and/or price controls of any kind) help the middle class is bunk. The “cost of doing business” is simply passed on to the end consumer which is you and me, resulting in higher costs, less free spending money and on and on. As a result, the whole ends up subsidizing the few. Worse, many projects simply aren’t undertaken and the whole is further short changed through lack of economic activity that would have otherwise taken place.

    Reply this comment
  12. Rebuttal to Foolish Comments
    Rebuttal to Foolish Comments 6 January, 2012, 21:35

    For Working Stiff – I know you’re stiff and tired after long days of manual labor at the construction site, but someday after work, take a look at the Industrial Relations Dept. website to see that prevailing wages for many trades are statewide or are for all of Northern California and all of Southern California. Did you know that before you posted? And why are you so angry about FOX News and talk radio? Are you afraid of ideas that are different than yours? Are you one of those Fair Doctrine types who don’t like how true working stiffs are listening to Rush Limbaugh as they do their jobs every day?

    For Junior – are you saying that any private job in California not done under prevailing wage is teeming with workers from Alabama? Where is your proof? And why did you pick Alabama? Are you fearful of people from the South? Or is Alabama some sort of code word with meaning understood among racist liberals?

    Reply this comment
  13. echelonLady
    echelonLady 24 January, 2012, 13:11

    I do the prevailing wage paperwork for a non-union sheet metal contractor outside Sacramento. Our workers are very skilled, and get paid a non-prevailiing wage between $25 – $30/hr, which is very good. Prevailing wage rate for our area, including fringes, is about $63/hr. THAT’s DOUBLE. The laws definitely need reform, prevailing wage definitely increase the cost of construction projects that you and I pay for, and are absolutely poised to benefit the unions. I am all for people being paid an honest wage for an honest day’s work, but paying somebody over $60 an hour is not doing our economy any favors. Much of public sector alike, are not moving forward with projects because they are over budget. What is the unemployment rate for construction industry right now? 30% or so? We need some balance, immediately, to get construction moving again and get people back to work. Even at $60/hr, I guy may only be working a few weeks or months a year. I know I’d rather be working full-time at a lower rate than making more and barely working.

    Reply this comment

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