Wilson Seeks Reduction in Construction Worker Wages

Promising to save state and local governments as much as $200 million annually, the Wilson Administration on Thursday announced reforms to cut construction workers’ wages on government-financed building projects.

The governor’s proposals, expected to take effect within a few months, would modify “prevailing wage” standards long prized by construction industry unions.

The move would achieve through regulation changes similar to those that Republicans in the Legislature have tried to pass for years. It also comes as federal prevailing wage standards under the historic Davis-Bacon Act are under attack from Republicans in Washington.

Speaking for the Wilson Administration, Lloyd W. Aubry Jr., director of the state Department of Industrial Relations, said the reforms would bring state standards into line with federal requirements and “are not a wholesale attack on the prevailing wage law.”

Aubry said the changes “are in the interest of taxpayers and will not affect the quality of work. They will save tax dollars at a time when California’s infrastructure needs are great.”

But the wage-cutting proposals angered union leader Bob Balgenorth, president of the State Building and Construction Trades Council of the AFL-CIO.

Wilson “has come back from a failed presidential candidacy and he’s trying to regain his credibility with a mythic savings for taxpayers,” Balgenorth said.

He said the changes would come back to haunt California by, among other things, drawing in contractors from other states, undermining construction quality and damaging union apprenticeship programs, along with driving down wages and benefits for workers. “There’s a net loss to all segments of the community,” he said.

Prevailing wage standards, both at the state and federal level, are traditional methods used to prevent contractors from underbidding each other by slashing workers’ pay and benefits.

The main change proposed by the Wilson Administration would alter the basic formula for calculating prevailing wages on public works projects. It would peg wages to what either the majority of construction workers in a given area are earning or to a “weighted average” of workers’ wages.

The existing “modal” system has tied wages to the most common pay level in an area--enabling the union pay scale to prevail even if a minority of workers are represented by labor organizations.

Balgenorth said that when the federal government made a similar change during the Ronald Reagan Administration, it significantly cut into construction workers’ wages, and he fears the same will occur in California.