Saturday, May 22, 2004

"This was like a Bomb Going Off in the Environmental Community" - Labor Union's Prevailing Wage Law in California Now Threatens Environmentalists
Most people have never heard of the strange pork barrel animal that helps keep state construction costs astronomically high - othewise known as "prevailing wage law." That could be about to change. Under a recent ruling by California's Department of Industrial Relations, the environmental group Heal the Bay will now have to pay all its volunteers the prevailing wage because under amendments to the California Labor Code pushed during the Gray Davis administration, receiving governmental assistance turns construction (defined loosely) into a "public works project."

As one activist said recently:
"This was like a bomb going off in the environmental community," said Shelly Luce, director of science and policy at Heal the Bay, which was forced to halt a volunteer weed-removal project along Malibu Creek. "Our creek monitoring and restoration is 80 percent volunteer ... We were sure it meant we had to shut everything down."

So what exactly is a prevailing wage for anyway? Well, many states enacted laws during headier union times that were designed "to protect" the workers in the labor market from distortions that would be wrought through cheap government labor. To do so, many states and the federal government (the latter for its own projects) mandate that workers be paid the "prevailing market wage". However, there are several problems with this that I have listed in a separate post today, but I've summarized them below:
(1) the prevailing wage is likely and often is significantly higher than the actual market wage
(2) workers on government projects might not be as deserving of even the market wage
(3) it could increase not only the cost, but the number of governmental projects.

So the environmentalists (and many other non-profits that rely on volunteers) in California now have a few options.

First, they can try to have their projects supported by California Chartered Cities as opposed to the state government, under the guise that these cities are entitled under the state constitution to run their own "municipal affairs" and that prevailing wage law is not a "matter of statewide concern" that can trump this right to "home rule". While there is solid precedent (a dated California Supreme Court case called Pasadena holding that prevailing wage law is not a matter of statewide concern), a recent appellant level case known as Long Beach departed from it by holding the opposite. This case is now pending before the California Supreme Court.

Second, they can refuse governmental assistance or pay their workers. Both here would be very difficult for such groups.

Third, they can try to apply for a difficult exception

Finally, they can get an exemption built into the state law exempting volunteers, which I believe the federal and quite a few state governments have. Trouble is, the labor unions aren't willing to budge, as Daniel Weintraub points out

You would think lawmakers would just repeal whatever law is blocking volunteerism, or pass a new law that explicitly allows it. That shouldn't be very difficult if everyone wants it, right? Wrong.......
The easiest fix would be the simplest: a new law that says people who want to volunteer their time can do so. And if they are getting paid, they get paid the prevailing wage.
But not in the Capitol.
Hans Hemann, an aide to Assemblywoman Loni Hancock, the Berkeley Democrat who has taken over the issue in the Legislature, says his boss so far hasn't been able to get labor leaders and environmentalists to agree on a fix.

However, there might be a glimmer of hope for environmentalists. A later dated publication claims that "regulators have stopped enforcing" pending action by the legislature.

Would it be a good thing for the legislature to act? Sure, environmentalists and other non-profits would get out of the high costs associated with this law, but many government contractors would remain stuck with it leaving taxpayers to pony up the higher costs. Leaving the law in place might be just what is needed to draw attention to the problems of prevailing wage law that I point out in the post below.