Zack Hutchins
Director of Communications

For Release — June 30, 2010

Business Council says service worker wage mandate a job killer

ALBANY— “Expanding the prevailing wage law to private businesses for the first time sets a dangerous precedent that will prevent job creation and raise prices in New York,” said Kenneth Adams, president and CEO of The Business Council of New York State, Inc.

The bill (A.10257-D/S.8379-A) would alter existing labor law provisions that were created to establish wage requirements for building service employees to apply to broad new categories of employees, including service workers for utility companies, and numerous other categories not contemplated by the drafters of the original legislation. In fact, service work for utility companies was explicitly and intentionally excluded from the original legislation in recognition that the extension of wage requirements to such workers would be inappropriate and would result in increased costs to consumers. Estimates from just three of the state's utility companies are that the added costs to ratepayers would exceed $37 million annually. There is no rationale offered by the sponsors of this legislation to support expanding prevailing wage mandates to the private sector for non-public works.

“Once this law is expanded to utilities it is easy to see how it could be applied to virtually any private entity, such as manufacturers, hospitals and universities and others,” said Adams. “New York is already uncompetitive because of high costs imposed by government. Placing wage mandates on private sector employers will make matters worse. Legislators would be hard-pressed to come up with anything more harmful to economic recovery in New York.”

The wage mandate in the bill applies to contractors who perform services for utilities. These additional costs – that will be passed along to ratepayers -- do nothing to improve safety, reliability or customer service.

New York has some of the highest energy prices in the nation. A report issued by the Public Policy Institute in March demonstrated that state and local government taxes make up more than a quarter of most New Yorkers' electric bills. New York's power industry paid an estimated $6.367 billion in state and local taxes, assessments and fees in 2009. The figure is $853 million higher than the total the industry paid in 2008, an increase of more than 15% in just one calendar year. This mandate would simply drive those costs higher, making energy even more costly for both residential and business customers in New York.