In my opinion, the rage referred to in the title is from the relative change in position. People in the private sector who used to be paid more on average than government workers are now being paid less. Rightly or wrongly, they see themselves as paying for the stability and growth of the government class with their tax dollars, the decline in value of their retirement plans and homes.
The perception is that they have borne the brunt of the economic decline and the government class has not. I also think the average private sector non union worker equates unions with government and corruption.
The way this issue was handled will probably give Mr. Collins and his chosen candidates a boost in the elections this fall.
News Analysis |
Prevailing Over Rageby Bruce Fisher |
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Your money, your community, and—finally—your representatives
Recently, Democrats in the Erie County Legislature bravely asserted themselves in favor of unions and against the county executive’s proposed privatization of public subsidies for real-estate deals. The dispute was, as ever, about the prevailing wage.
Many issues lurk in that conflict, including the standard flashpoints of race and interest groups. But also at issue is our very definition of what prosperity and community well-being are.
The prevailing wage is a big deal. The New York State Department of Labor has a list of who gets paid what for the construction job that gets done. Prevailing wage for a general laborer is $25.11/hour for a “heavy/highway laborer,” $21.12/hour for a carpenter, $26.35/hour for a plasterer, $31.58/hour for a master mechanic (typically a guy who operates a big yellow machine). Benefits are another $20 or so an hour, and apprentices get about half. You get the picture: The people who do what is typically seasonal labor fixing roads, sewers, schools, and the like get a pretty good buck for the time that they’re lucky enough to be working.
By federal law enacted under the presidency of Franklin Delano Roosevelt, any federally funded project, i.e., that is paid for with federal taxpayer money, must pay prevailing wage. The logic is straightforward: Public funds should support, not suppress, the community’s economic well-being. Ronald Dworkin, in his new book Is Democracy Possible Here?, demonstrates the kind of thinking that this New Deal enactment made mainstream when he discusses the question of federal tax policy in terms of managing what he calls “the community’s wealth.”
Imagine that—the community’s wealth, rather than individual wealth! What an idea!
That’s what the Erie County Industrial Land Development Corporation (ILDC) is supposed to protect, sustain, and enhance. It’s the function of government, after all, to provide for the common good. (Go look it up in the Constitution.)
But here’s where we are now. I don’t know a single Buffalo-area businessperson who isn’t opposed to the unions—viscerally, constitutionally opposed—and most especially opposed to paying the prevailing wage whether or not a construction job is handled by union labor.
Angry rants versus community economic sanity
Anti-government, anti-union, and anti-prevailing wage positions are the articles of faith among the business class here. This is a truly curious phenomenon, because almost everybody who owns a company around here gets lots and lots of public money in one form or another. There are Empire Zone or HO-Zone or some other kind of zone tax credits that are simply not available to anybody who is not a member of the investor class. There are subsidized loans through the county ILDC or a town industrial development agency. There are direct government contracts for building things like school buildings, community college buildings, university buildings, and, of course, the big road-repair jobs. And there are those in the world of the clubs who take astoundingly big money indirectly through working for or supplying the healthcare system, which gets public money in any of a bazillion ways.
Notwithstanding the massive array of public funds that go to the “private” sector here, among the leaders of the companies, the loathing for unions, and most especially for the prevailing wage, is red-hot.
A Marxist might say that the local polarization between pro-union Democratic legislators and the business class is a clear case of class consciousness, but I don’t think we have to get that sophisticated. Hereabouts, it’s about culture, and style, and about personalities, too. The non-owners, whether union members or not, are just kinda tired of being ranted at by folks who drive new-model luxury cars, who cluster at the city clubs in winter and at the country clubs in summer, and who have a sneering, contemptuous way of talking down to everybody as they assert that what’s good for their personal checkbooks is good for everybody.
The conflict over the prevailing wage is a tough issue. Some pro-labor folks worry that not-for-profit entities—like charter schools—won’t do any building if they don’t get to borrow money at the subsidized rate from an IDA or the Erie County ILDC now that the law requires them to pay prevailing wage. Critics also say that the inadvertent effect will be to see increased borrowing costs for these projects, and non-union labor making non-prevailing wage wages if indeed these projects go ahead, thus thwarting the intent of the legislation.
But as so much money that comes to this community is public money from Washington or Albany rather than local-source money, and as so much construction that gets done here is for public purposes, one wonders aloud to the business class: Why would you guys turn down outside money just because more of it is going to go to a few, just a few, of our working people?
The class problem
Not everybody is going to be making prevailing wage. As this column showed recently, with a poverty rate in double digits, and with the problem of intensifying poverty all across Upstate New York, it seems illogical that anybody who has the ability to add and subtract would object to public funds being deployed such that the general public welfare benefits.
We must remind ourselves that income polarization around here, like everywhere else in America, is a reality. An analysis of state tax returns filed in Erie County in 2007 (the latest year for which data are available) show that over 42 percent were for incomes of $20,000 or less. The broad middle class, which is to say those reporting incomes between $20,000 and $100,000, doesn’t seem very robust here, given that they add up to just under half the tax-return filers. Everybody who reports incomes of under $100,000 in Erie County, about 90 percent of households, all told take in only about half of all the income.
What that means is that a lot of folks would be happy to get paid the prevailing wage for construction work, or any work at all.
According to the New York State Department of Labor, about 16,000 people are employed in the categories “construction of buildings,” “heavy and civil engineering construction,” and “specialty trade contractors.” Out of a county workforce of 458,000 or so, that’s not many people.
There are many, many more people employed in jobs that don’t make prevailing wage. There are more than 51,000 Erie County citizens working in retail. Retail wages are notoriously low, which is why the folks who campaign for a “living wage” of about $12 an hour point out that it’s truly loony for public funds to subsidize retail developments when it’s nearly impossible for folks earning retail wages to sustain themselves, much less kith and kin.
Only 48,000 people in Erie County work in manufacturing, and with the decline in automobile manufacturing around here, not nearly as many of those folks are making union wages compared to even a few years ago. About 30,000 people work in banks, insurance companies, and collection agencies—and outside of a relative handful of executives, their salaries put them squarely into the middle of the middle class.
Of the remaining categories of workers here, folks working jobs that give them a shot at being eligible for things like mortgages, car loans, and some sense of personal security, about 60,000 are at work in healthcare, less than a thousand in agriculture, and the biggie that everybody in the investor class complains about even more than about construction workers: government.
Add up federal, state, and local government, including schools and colleges, cops and firemen, social workers and FBI agents, and it’s the biggest single part of the workforce, at over 75,000 paychecks out of the 458,000 in our county. But let’s be clear: The median salary for a government worker here is under $40,000, and a very large portion of these folks have at least a college degree. The good news for the local economy is that, at about 17 percent of the local workforce, government workers enjoy some financial stability.
But of all those folks so far listed, far too few can rely on the kinds of incomes that will gain them entry into the salons where unions are trashed and government derided. How strange, then, that—until the Erie County Legislature stood up to make a gesture of solidarity with an old notion of community well-being—the tone of our politics was trending toward the sneering contempt of the few for the many.
So bravo, Erie County Legislature. Perhaps this is the first step toward a more sane politics of defending the public interest, the broad public interest, and utilizing (gasp!) government to achieve that goal.
Bruce Fisher is visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.
Reader Comments
BuffaloRandy 30 Jul 2009, 08:41
Tomato 31 Jul 2009, 08:12
The proponents of prevailing wage fail to consider that a significant portion of the work is performed by companies outside of Erie County, and in fact outside of New York State. All too often purchasing and construction projects are won by companies that are not saddled by the negative business climate here. You can throw all the money at the worker that you want, but if they don't live here you are not going to see any benefit other than a negative flow of tax dollars. Don't be fooled, the support for prevailing wage only comes from the few who will benefit from it and the rest of the workers be damned. The statistics cited in this article clearly support this.
Bruce Fisher 31 Jul 2009, 16:04
Prevailing wage is paid to individual workers, not to companies. The State Department of Labor itemized over 16,000 individual workers who work in the builing trades and who are residents of Erie County. The basis of my analysis was these data. My conclusion: that paying locally-resident construction workers the prevailing wage is an economic benefit to the area. This is the analysis that underlise the Davis-Bacon Act, which mandates that prevailing wage be paid with projects supported with federal tax dollars. Federal law reflects a policy based on this analysis; my point is that local law should reflect this analysis, too. As for the issues of perception, I agree: the widespread drop in the purchasing power of moderate- and lower-income families has helped to create an atmosphere of resentment of workers whose wages have not dropped or whose employee benefits (health insurance, pension, etc.) have not been cut. Republican politicians, conservative commentators and wealthy individuals often criticize public-sector employees and falsely claim that they are the largest portion of the workforce here, while the fact is that they constitute about 17% of the workforce here, which is about average for the nation. My point is that reducing the wages of taht part of the workforce, or any other part of the workforce, e.g., the construction workers who work on jobs that are subsidized with taxpayer funds, is against the economic interest of the community -- especially when so much of the cost of government workers and of government-sponsored public works is paid for with dollars imported from outside the community.
Disgruntled
03 Aug 2009, 18:09
Back when I worked as Plumber at a small company prevailing rat work was what other people got as I didn't butt lick hard enough. It creates tensions that in this person still grate. There was one individual who was a walking fountain of leaks that got a bulk of the rate work that I feel to this day like vandalizing his house.
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