Construction industry, unions duel over state prevailing wage bill
NH Senate measure targets all state public works projects
A measure under consideration in the NH Senate would require contractors on state public works projects to pay the prevailing wage to workers, but it’s not the wages – it’s the benefits and paperwork that concerned several New Hampshire contractors speaking at a hearing Tuesday before the NH Senate Commerce Committee.
Several trade union representatives at the hearing countered that Senate Bill 271 is really not aimed at local contractors, but those outside New Hampshire, drawn here because it is the only New England state without prevailing wage requirements. (Some 24 states don’t have such laws, although the closest one to New Hampshire without one is in Virginia)
“At the end of the day, tax dollars of Granite Staters should go to local workers and local companies,” said Sen. Dan Feltes, D-Concord, the bill’s prime sponsor.
Feltes cited a 2016 study about the benefits of a prevailing wage: At least $300 million in economic activity resulting in some 1,700 jobs and tax revenues of 7.3 percent.
But contractors weren’t buying it.
“This would be devastating for our business,” said Joseph Campbell, president of North Branch Construction in Concord, who said that 30 percent of the work that employs his 65 workers is with the state of New Hampshire.
Campbell said his firm exceeds the prevailing wage that SB 271 would require under the federal Davis-Bacon Act). But the benefits required and the paperwork would “slow down the process, slow down the time we pay subcontractors.”
The law also requires that subcontractors pay the prevailing wage, he said, but “we don’t have the resources to audit all these small companies to see what wages they are paying. It’s a devastating amount of paperwork.”
Campbell was also voiced concern about penalties, which could be as much as $2,500 per violation, and more importantly, a possible ban from state projects for over three years.
New Hampshire repealed its prevailing law back in the mid-1980s, said Gary Abbott, executive director of Associated General Contractors of New Hampshire.
He said that, although wages and benefits were set by a county-by-county survey of average wages in each occupation, often “the wages were out of whack. That was because there were often not enough workers, and the wages paid defaulted to the union rate, even though 84 percent of the workforce is not in a union, according to Abbott.
Despite that, it was the fringe benefits that concerned most contractors.
William Clark, vice president of field operations of Turnstone Corp., based in Milford, said he pays more than $30 an hour, exceeding the wage, but about $8 an hour in fringe benefits. He said he was concerned because “the prevailing rate for fringe is $20 to $30.
But union representatives said that the lack of a prevailing wage makes New Hampshire a magnet for out-of-state contractors that do pay both lower wages and benefits, often using undocumented immigrant labor, “and it undercuts our local contractors,” said Denis R. Beaudoin, business manager of IBEW Local 490, the electricians’ union. The construction industry has only replaced 2,000 of the 9,000 jobs it lost during the recession, he said, adding: “How can we justify the work going out of state?”
And while contractors testified that they offer health benefits, they don’t match other union benefits, like an apprentice program, said David Pelletier, business manager of UA Local 131, the plumbers and pipefitters union.
“Unions do provide more benefits than open shops,” acknowledged Abbott.
One business did back the prevailing wage bill: American Income Life, a Londonderry insurance firm.
Kris Thieme, an agent from the company, countered contractors’ claim that a prevailing wage would drive up construction costs. He said soft costs, like engineering and architecture, were a bigger factor than labor. Besides, he said, if workers don’t have good benefits or wages, they would be more likely to receive state subsidies for healthcare, which would be passed on to taxpayers.
SB 271 would only apply to state projects, not municipal or school construction jobs, but the NH Municipal Association was concerned that the language wasn’t clear enough on that matter, since many local projects involved state funding.