This is a historic moment for public works in the city of San Diego. After decades of neglect, the city is intending to rebuild our streets, sidewalks, storm-drains, libraries and parks, and replace an aging water-wastewater system. In the coming fiscal year, the city is proposing over $330 million in capital improvement projects.
The city will be requiring the application of state prevailing wages to all public works contracts. This is intended to multiply the benefits of the taxpayer investment within the local community. After five decades of virtually exempting itself from prevailing wages, this reversal is the hallmark of new leadership in City Hall that wants to create good jobs, and generate long-term value in the spending of our construction dollars.
At a time when financially motivated Washington lobby groups are pushing risky city charters as a way to get around paying the prevailing wage that keeps thousands of working Californians out of poverty and off the government dole, it is a proud moment for San Diego now that our Mayor Filner and City Council are moving toward expanding these protections.
Let’s be clear at the outset — this is a move that will yield real benefits both for our community and taxpayers.
As someone who went through an apprenticeship program and learned a skilled trade, I can personally attest to the direct benefits that the action being considered by our City Council would provide to local families like mine.
Prevailing wage is the standard wage paid in a given area, and by adhering to this wage, San Diego would keep more of our tax dollars that pay for construction going into the pockets of workers and their families who live in our city, rather than going to less skilled workers from out of town, or in some cases, even out of state. More livable wages locally means more economic activity locally.
And that is — by any measure — a very good thing.
A recent study by Working Partnerships USA shows the dramatic difference prevailing wage can make in a community. The study compares the building of two similar libraries of almost near equal size in Santa Clara County: one in Gilroy built with the benefit of prevailing wage, and one built in Palo Alto built without prevailing wage.
In Gilroy, 71.2 percent of the tax dollars spent on construction went to local contractors, while in Palo Alto, a mere 11.8 percent of the tax dollars went to local firms.
This study further debunks the money-saving claim often made by the out-of-state groups opposing prevailing wage. The Gilroy library project built by workers earning a prevailing wage cost $326 per square foot, while the non-prevailing wage Palo Alto project came in at $430 per square foot.
In other words, Gilroy saved 24 percent per square foot and used local contractors — contractors who paid local people a good wage that they could reinvest in local businesses.
The Palo Alto project has fallen woefully behind schedule, and a May 8 article in Palo Alto Online reported that the city is preparing for legal action against the primary contractor on the project.
San Diego's recently completed Central Library was a complex project, and contractors paid their construction workers prevailing wages. The library was completed on time, on budget and with exemplary safety. Every time you look at the beautiful library dome in the skyline of downtown, think about the different trades that crafted it to perfection. And be thankful for us not to have shared the experience of Palo Alto.
Not only does prevailing wage greatly increase the likelihood of a safe work environment that produces a quality product at the right cost, it also provides economic benefits that go far beyond a specific project.
Economists have shown that every dollar spent on a prevailing wage project creates more than $1.50 in additional economic activity in the community. That means that good wages paid to local workers trickle down to the local bakery or restaurant, where well-paid workers can spend their money with local businesses. The job creators who own local businesses need those customers to keep their strong businesses strong and expanding.
Construction workers under the state’s prevailing wage laws often have access to additional benefits, such as health insurance. That means fewer people showing up at the hospital with no ability to pay for care, and it relieves our city and county of the burden of picking up the tab for those who cannot afford to do it themselves.
Paying workers a fair and livable wage is a powerful statement about the shared values of our community. We should hire local, pay sufficiently and reap the benefits of our investment. An investment that research clearly shows can even save us money at the outset, and deliver the highest quality work on the back end. This is why contractors, workers and community groups have joined together to support prevailing wages.
Lemmon is the business manager of the San Diego County Building and Construction Trades Council AFL-CIO overseeing 23 trade union affiliates. For more information about the Building Trades Council, visit www.sdbuildingtrades.com.