Downstate labor unions are pushing legislation that would require private-sector construction projects that receive even $1 of government assistance to pay "prevailing wage."
If this law goes into effect, it will kill economic development in Upstate, GCEDC CEO Steve Hyde told the Ways and Means Committee on Wednesday.
"This is just over the top," Hyde said. "You can go back in history across the U.S. and see that when government tries to mandate wages and tries to tinker with the mechanisms of free market systems, you get bad results."
Prevailing wage is the amount of compensation, including benefits, the Department of Labor sets for workers employed by companies doing projects for government agencies.
Supporters of the proposed change in the law equate prevailing wage with market-rate wages but that's just factually incorrect, Hyde said. A prevailing wage requirement would drive up the cost of projects backed by an IDA (Industrial Development Agency) by 25 to 30 percent.
That will drive business out of the state, Hyde said.
For small companies looking to expand, it will make projects financially unfeasible and for companies looking to locate new plants to New York, it will make the state even less competitive.
The IDAs in Ulster County and Yonkers have previously tried imposing similar requirements on projects they helped finance and in both cases, the IDAs had to back off the prevailing wage requirement because economic development came to a grinding halt in those jurisdictions.
"This is really a 'turn the lights out' for economic development if this were to happen in New York State," Hyde said.
With less development, Hyde said, there will be fewer jobs and the fallout would hurt huge sectors of New York's economy, from construction to architects and engineers.
While the major push for the bill is coming from Downstate labor unions, Hyde said he hasn't heard what position, if any, labor unions in Western New York are taking. One of the bill's cosponsors is from Rochester, Assemblyman Harry Bronson.
A similar bill has previously passed the State Assembly but died in the then-Republican-controlled State Senate. Now that Democrats control the Senate, the bill's defeat is far less certain.
Hyde asked members of the Legislature to write to state representatives expressing their opposition to the bill in the hope that it could be defeated.
Photo: Jim Krencik, marketing and communications director for GCEDC, and Steve Hyde, CEO.