Don’t know if you’ve seen the new TV ads that are part of the Cuomo Administration ad campaign touting a “new New York focused on nurturing start-ups and small businesses to create jobs”. According to the ad, this “new New York” works for business. And this “new New York” will attract businesses from all over the world to come to New York and bring jobs, and tax revenue, to the state.
Howard Nielsen, the owner of Sticky Lips BBQ in Henrietta, NY would probably disagree.
Here’s a LOCAL businessman who was willing to invest his own funds to build a new restaurant in the Rochester, NY area who is now being hounded by the state because the Building Trades unions are using the state to retaliate against him for not using union labor when he embarked on the reconstruction of the building where his restaurant is located. How is that “nurturing start-ups and small businesses to help them create jobs”?
Mr. Nielsen bought the building where his restaurant is now located from the Genesee Valley Regional Market Authority through a commercial broker. The building had been on the market for nearly two years. The building sits on land owned by the Market Authority and part of the sale of the building included a land lease that requires Mr. Nielsen to pay monthly rent to the Market Authority for the land. The building was originally built in 1998 from the ground up as a Roadhouse Grill restaurant. It needed substantial repair and restoration to turn it into the establishment that Mr. Nielsen envisioned. He hired contractors to do the construction/renovation work, and he paid for all of the work himself. He did what he set out to do – he started a new business and created new jobs here in the Rochester area, a community that he loves. But instead of congratulating him on doing his part for the economy of upstate New York, the state is now, through the New York State Department of Labor, accusing Mr. Nielsen of not paying the correct wages to the construction workers involved in that repair and restoration work – the state is claiming that because a public entity (the Regional Market Authority) owns the land, that any construction work is considered public work and therefore subject to New York State prevailing wage requirements (which in essence means a requirement to pay the union wage, because New York State prevailing wages are plain and simple the union collectively bargained rate in the given jurisdiction). Here in Monroe County, the prevailing (union) rate is at least 30-40% higher than the “market” rate because prevailing wage requires the union collectively bargained wage AND BENEFIT hourly rate to be paid to all workers regardless of their labor affiliation. I’m an open shop electrical contractor, and when I work on private work my hourly labor cost for wages AND benefits (and I provide insurance, 401K and vacation/holiday benefits) is , on average, between $28 and $32 per hour, because some of my employees have single health insurance coverage and some have family coverage. On public work today, in Monroe County, I am required to pay $51.00 per hour to my electricians across the board, whether they have single or family coverage and regardless of their skill and productivity level. That’s a 37% increase in labor costs for the same employee between private work and public work. This $51/hour “prevailing” rate is a combination of $31.50/hour in wage and another $19.50/hour for benefits which is the rate negotiated by IBEW Local 86 and its signatory contractors. And of that $19.50 in benefits, between $8 and $9 per hour is supposedly the required health insurance contribution that union signatory contractors must make to the union benefit fund for every single worker, whether that worker has single or family health insurance coverage, or any coverage at all for that matter if the person is covered on a spouse’s insurance plan. Now, at $8/hour for 2,000 hours of work over the course of a year (50 weeks at 40 hours per week), that means for that individual, health insurance premiums are $16,000. I just shopped out my health insurance last year, and NO plan that I looked at carried premium costs that high. So why is the hourly health insurance contribution so high? Because that union benefit fund pays for health insurance for current AND retired workers, and for non-field staff like organizers, business managers, and administrative staff employed by the union itself. The hourly cost the signatory contractors are required to pay is increased to cover retiree and non-field union staff costs, and open shop contractors working on taxpayer funded construction are being required to pay benefit costs that are well above what their costs are to provide benefits for their employees as a result of the practice of using the union collectively bargained rates as the de-facto prevailing rates in NY. And of course, it is the taxpayers who are ultimately paying these highly inflated benefit costs. It’s a sham from the get go, and we MUST get our elected representatives to reform the prevailing wage system here in New York. Mr. Nielsen is caught up now in this highly charged debate, and his experience will hopefully add significant pressure to those elected representatives to fix the system so it works for everyone, particularly the taxpayers of New York State.
It’s too bad that a state touting itself as this “Open for Business” kind of state has sought to demonize an honest, hard-working businessman who just wanted to expand his business and create more opportunity for the local workforce and more tax revenue for the state. And how does this position New York as “working for business” Mr. Cuomo? I’d say at the present, New York is “working for unions” and that needs to stop NOW, because the taxpayers simply cannot afford the costs any longer.