pw for sbc.june 2011

8/6/2019 PW for SBC.June 2011

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Prevailing WagesPrevailing WagesPutting the Triple Bottom LinePutting the Triple Bottom Line

to Work in Public Worksto Work in Public Works

Presentation toPresentation to Sierra Business CouncilSierra Business Council

Energy & Climate Leadership InstituteEnergy & Climate Leadership InstituteAuburn, CAAuburn, CA

Alex LantsbergAlex Lantsberg

June 23, 2011June 23, 2011


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TodayToday s Agendas Agenda

Overview of Prevailing WagesOverview of Prevailing Wages

DefinitionDefinition

HistoryHistory

ApplicationApplication

Why Prevailing Wage?Why Prevailing Wage?

Stabilizes the construction industry & its workersStabilizes the construction industry & its workers

Contributes to local economiesContributes to local economies

Supports local government revenuesSupports local government revenues

A Review of the EvidenceA Review of the Evidence

Construction CostsConstruction Costs

Impacts on Human CapitalImpacts on Human Capital

Making the Connections: The TripleMaking the Connections: The Triple

Bottom LineBottom Line


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What isWhat isPrevailing WagePrevail ing Wage??

TheTheprevailing wageprevailing wage is theis the mostmostcommon ratecommon rate that is paid to constructionthat is paid to constructionworkers byworkers by occupationoccupation andand regionregion asas

determined by the Department ofdetermined by the Department ofIndustrial Relations.Industrial Relations.

Includes additional payments forIncludes additional payments for healthhealthcarecare ,, retirementretirement ,, apprenticeshipapprenticeshiptrainingtraining , and, and vacationvacation ..


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What isWhat isPrevail ing Wage?Prevail ing Wage?Different Rates for Different RegionsDifferent Rates for Different Regions


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The History ofThe History of

Prevail ing WagesPrevail ing Wages

NationNations first State Level Prevailing Wage laws first State Level Prevailing Wage lawadopted inadopted in 18911891 by the State of Kansasby the State of Kansas

CaliforniaCalifornias Prevailing Wage Act passed ins Prevailing Wage Act passed in 19311931

Federal Prevailing Wage law (aka DavisFederal Prevailing Wage law (aka Davis--BaconBaconAct) passed inAct) passed in 19311931

3131 states have some form of prevailing wagestates have some form of prevailing wagelawlaw


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Applicat ion ofApplication of

Prevail ing WagesPrevail ing Wages

Required onRequired on public works constructionpublic works construction

projectsprojects of $2500 or more,of $2500 or more, w ith somew ith someexceptionsexceptions for affordable housing.for affordable housing.

There isThere is pending litigationpending litigation in the Californiain the California

Supreme Court to determine if prevailing wagesSupreme Court to determine if prevailing wagesare required where Cities solely fund a particularare required where Cities solely fund a particularpublic works construction project.public works construction project.

441 out of 478441 out of 478 California Cities requireCalifornia Cities requireprevailing wages for municipal projectsprevailing wages for municipal projectsnotwithstanding the above court case.notwithstanding the above court case.


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Why Prevail ing Wages?Why Prevail ing Wages?Benefits to the Construction IndustryBenefits to the Construction Industry

Organizing competition aroundOrganizing competition around qualityqualityworkmanshipworkmanship andand effectiveeffectivemanagementmanagement

ImprovingImproving workforce productivityworkforce productivity

PromotingPromoting capital investmentcapital investment


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Why Prevail ing Wages?Why Prevail ing Wages?Benefits to Local EconomiesBenefits to Local Economies

IncreasingIncreasing likelihood oflikelihood oflocallocalcontractorscontractors working on public projectsworking on public projects

ProtectingProtecting opportunities foropportunities for locallocal

workersworkers

CapturingCapturing thethe multiplier effectmultiplier effect ofof

public contracting labor costspublic contracting labor costs

ImprovingImproving a communitya communityssskills baseskills base


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Why Prevail ing Wages?Why Prevailing Wages?Supporting Local ContractingSupporting Local Contracting

Dispersion of Funds from Palo AltoLibrary, built w ithout Prevailing Wage11.8% Local Contractors

Dispersion of Funds from Gilroy Library,built w ith Prevailing Wage71.2% Local Contractors


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Why Prevail ing Wages?Why Prevailing Wages?Benefits to Local GovernmentsBenefits to Local Governments

High quality workmanshipHigh quality workmanship for publicfor publicinfrastructure that stands the test of timeinfrastructure that stands the test of time

WorkersWorkersincreased buying powerincreased buying power

raises tax revenuesraises tax revenues

Provision of health benefitsProvision of health benefits reducesreduces

strain on the public health systemstrain on the public health system


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A Review of the EvidenceA Review of the EvidenceImpacts on Construction CostsImpacts on Construction Costs

Prevailing wagesPrevailing wages do not increase thedo not increase thecosts of public constructioncosts of public construction

Prevailing wagesPrevailing wages reduce cost overrunsreduce cost overruns

Prevailing wagesPrevailing wages discourage unethicaldiscourage unethical

contractorscontractors


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A Review of the EvidenceA Review of the EvidenceImpacts on Human CapitalImpacts on Human Capital

Prevailing wagesPrevailing wages promotepromote worker safetyworker safety

Prevailing wagesPrevailing wages provideprovide health andhealth andretirement securityretirement security for working familiesfor working families

Prevailing wagesPrevailing wages stabilize all constructionstabilize all constructionworkersworkers wageswages

Prevailing wagesPrevailing wages createcreate opportunities foropportunities forveteransveterans returning to civilian lifereturning to civilian life

Prevailing wagesPrevailing wages supportsupport apprenticeshipapprenticeshipprogramsprograms for the next generation of workersfor the next generation of workersentering the tradesentering the trades


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Why Prevail ing Wage?Why Prevail ing Wage?Apprent iceship and Green BuildingApprent iceship and Green Building

Starting in 2012 all California constructionStarting in 2012 all California constructionapprenticesapprentices will bewill be trained intrained ingreen building practicesgreen building practices

Advanced building techniquesAdvanced building techniques

Improved materials managementImproved materials management

Integration with efficient building systemsIntegration with efficient building systems


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The Faces ofThe Faces of

Prevail ing WagePrevail ing Wage


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Making the ConnectionsMaking the Connections

How does the use of prevailing wageHow does the use of prevailing wagestandards in the construction industrystandards in the construction industrypromote the triple bottom linepromote the triple bottom line??

SocialSocial

EconomicEconomic

EnvironmentalEnvironmental

pw for sbc.june 2011

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