July 2017 – At long last, it looks like California lawmakers are getting serious about the state’s housing crisis. At the same time, it’s crucial that legislators in Sacramento watch out for developers going on the attack against the blue-collar construction workers who are suffering like millions of other less-than-wealthy Californians who are paying more and more every year to put a roof over their heads.
When the developers moan about the cost of labor, when they ask for changes in the law to get rid of the prevailing wage, our elected representatives need to know what the unscrupulous among the modern-day land barons really want. They want to revert to the underground economy, where they pay their workers in cash under the table, with no benefits, setting them off against each other in a race to the bottom. They want to avoid paying state and federal taxes and fees for new schools and sewage plants and other infrastructure.
They want to pay as little as they can and charge as much as they can while we pay as much as they can extract from us while they profit as much as they can at our expense.
You can do that when you own the land, when you go on spending sprees when the business cycle spins downward, so you can control the market when the economy improves.
No, there’s nothing wrong with making a fair profit, and making smart investments when times get tough deserves its reward, too. But there is something morally reprehensible about denying working people their foothold in the economic mainstream, about relegating them to less-than-standard housing of their own, to unsafe communities, to long commutes, to futures for their children with little chance of ever joining in on our nation’s prosperity.
Of all the progressive legislation passed in the United States going back to the presidency of Teddy Roosevelt, perhaps none established a greater degree of fairness for blue-collar workers than the 1931 Davis-Bacon Act. For 86 years, the law has established a minimum hourly rate for construction workers on taxpayer-funded projects based on the predominant hourly wage for each Trade in each locality across the country. The prevailing wage as established by Davis-Bacon has long governed the big public construction projects like roads and school buildings and, in the past two years, California’s high speed rail project (which also has a Project Labor Agreement).
Now, with Sacramento’s focus on housing in the current legislative session, academics, politicians and newspaper columnists who do the bidding of the greedy have extended their targeting of the prevailing wage to legislation that seeks to resolve some of the pressures in finding a place to live.
Erroneously and relentlessly, they sprinkle their discussions on the causes of California’s high housing costs with suggestions that the prevailing wage is right up there as a culprit, next to local slow growth policies, added permitting costs, lengthy environmental reviews and inclusionary zoning ordinances.
In a market-based system where demand for housing far exceeds the supply, especially along the California coast, where lots of people want to live and where blue-collar workers are being priced out of their homes, the absolute wrong thing to do would be to reduce wages on the segment of the population that needs all the political help it can get to hang on to what it’s got left.
Prevailing wage construction workers, first of all, add almost nothing to the cost of the multi-family projects that would come under the jurisdiction of Davis Bacon in the state’s affordable housing initiatives, according to the reputable and reliable work of researchers at SmartCitiesPrevail.org.
Construction labor, of course, only accounts for 15 percent of the price tag on the projects, and the premium that workers enjoy on a prevailing wage job is more than made up in the long run through the added productivity that naturally results from employers taking advantage of a more highly skilled and trained workforce.
Better paid workers, too, are far less likely to burden taxpayers with social costs such as food stamps, and they are far more likely to be employed by top-flight construction companies that see the value in providing decent health benefits to their employees, rather than relying on taxpayers for their care.
Still, the housing situation in California is grave. Market forces continue to exacerbate the jobs-housing imbalances. Lawmakers have much to debate in trying to rectify the supply side of the equation, where some estimates on the shortfall in new housing construction quote a figure of 240,000 needed units a year that are not getting built.
Lawmakers this year seem intent on making some progress on that score, by moving forward on a $3 billion affordable housing bond for the November 2018 ballot and on another bill that would streamline the review process for new housing construction in places that have been falling short.
The State Building and Construction Trades Council of California supports these initiatives, both of which include prevailing wage provisions. At the same time, we will just as severely oppose any effort that would remove the prevailing wage from any housing proposal that contains a public component.
There is no question that California has to take steps to build more houses. It also needs to make sure that the construction workers who give rise to them will make a decent enough wage to live in them.