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For Release — June 2, 2009

Business Council says wage mandate will damage recovery

ALBANY— “A bill to require union wages on private sector projects that receive any government aid, no matter how limited or indirect, will bring construction to a halt, kill jobs and deter new investment in New York. Proposed wage mandates will drive up costs for private sector projects, affordable housing and other stimulus efforts. If the goal is to prolong the recession this is the bill,” said Kenneth Adams, president & CEO of The Business Council of New York State.

The Business Council is opposing a bill (A.3705/S.4912) to require “prevailing wages”, essentially union wages on private sector projects.

Recent research shows that this mandate would damage New York's ability to compete for projects. This mandate would make construction costs 28 percent higher in upstate New York communities than in comparable out-of-state communities and 76 percent higher downstate than in comparable communities. The Center for Governmental Research study is available here.

“New York is already an expensive place to do business, adding costs that discourage investment and the creation of jobs in this economic climate will only lessen our chances of recovery,” said Adams. “Rather than helping workers, this bill will actually have the unintended consequence of hurting them by putting the brakes on job creation and decreasing the amount of affordable housing available to families.”

“This bill takes projects that are clearly not “public works” and subjects them to wage mandates that will make them unaffordable to complete,” said Adams. “It will do the greatest harm to small construction firms in the state who will see projects evaporate.”

The Business Council's memo in opposition to the bill is available here.

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