 Those of us who were working as organizers when the San Francisco Building and Construction Trades Council advocated the establishment of the City’s Office of Labor Standards Enforcement (OLSE) saw the need for it clearly. Interviews with hundreds of non-union workers who had been employed in public works convinced me that failure by non-union contractors to comply with prevailing wage laws was almost universal. Meanwhile no one enforced those laws. The City did nothing to verify the accuracy or completeness of the “certified payroll” documents contractors provided it to demonstrate compliance with the laws. Pete Wilson had dismantled enforcement programs at the state level. Hindered by the California budget process, Gray Davis could rebuild them only slowly. We could sometimes convince workers to file formal complaints or to join in “unfair competition” lawsuits (now restricted), but often family or community ties or even some lingering loyalty to a former employer restrained them.
Real enforcement arrived at last with the OLSE. I helped launch its first successful case. Visiting a job site at the zoo, I questioned in Spanish a non-union carpenter working there and learned that he was being paid far less than the prevailing wage. I called the new OLSE immediately. An investigator came, verified the violation, and discovered others.
Since then, the OLSE has investigated numerous cases. It has continued to find violations. It has then done its job and obtained penalties. Penalized contractors have complained. Some of these belong to the Asian American Contractors Association (AACA), whose members include both union-signatory and non-union contractors. The AACA has spoken out on behalf of its penalized members. It has claimed that the OLSE has singled out Asian American Contractors for investigation and enforcement. If this perception is real, it is nonetheless unjustified. That first case at the zoo did not involve an Asian American Contractor. Since then, Asian American contractors have been far from the only ones investigated or penalized. If the perception is real, however, we can discern how it arises. For years non-union Asian American contractors have been active in San Francisco public works. If the OLSE is doing its job, they will therefore have been investigated. If prevailing wage violations have been anywhere near as common among them as they were when I was walking job sites and interviewing workers, non-union Asian American contractors will also have been often cited and penalized. Only the contractors can answer whether the violations result from misunderstanding of the prevailing wage system or from intentional flouting of it. In either case, the law applies.
The San Francisco BTC hosts a breakfast for John Garamendi, endorsed candidate for California’s Lieutenant Governor in the Democratic primary in June. L-R: Bill Wong, Council Vice President; John Garamendi; Mike Theriault, SFBTC Secretary-Treasurer
The prevalence of violations by non-union contractors of prevailing wage laws in heavily unionized areas is an indirect function of the prevailing wage system. In such areas union wages by definition prevail. (In some areas less heavily unionized than ours they do not.) To compete in public works in heavily unionized areas non-union contractors who obey the law and pay their workers approximately what union contractors pay theirs must get levels of productivity and skill from the workers comparable to those of union workers. This is not beyond possibility. Non-union workers might have received union training and then abandoned the union, or might have received good if not exactly equivalent training in other countries, or, more uncommonly, might have received adequate training in a non-union apprenticeship. Non-union contractors well supplied with such workers are rare. The lower skill of their workers obliges the great majority of non-union contractors to use more man hours to complete a given job than would a union contractor. Thus to compete in public works in such areas as San Francisco most non-union contractors must violate prevailing wage laws.
Lest anyone in the non-union sector or the general public question prevailing wage laws on this account, they should recall that those laws are intended to serve and do serve primarily to protect a regional construction market from depredation by contractors from another region. In markets such as San Francisco, where the high cost of living has obliged construction unions to negotiate wages that are among the best in the country, it would be a simple matter for contractors even from distant regions to import workers, house them for a short while in conditions that no one would accept long-term, and take over work. This is exactly what happened recently here on a substantial excavation and toxic remediation job, in which a non-union Texas contractor employed by Chevron imported its workers from Texas and Georgia. Enough of this and local workers would be faced with a choice between far lower wages and other employment or employment elsewhere, the region would see the skilled resident workforce so important to its safety and prosperity shrink, and local businesses would find themselves deprived of the dollars those workers once spent. The economy would be driven down. Even non-union contractors would find the prices they could charge for work depressed. The prices they pay for material being unchanged, they would be obliged to accept lower profits or to seek further reductions in labor costs, or both. Either choice would continue to drive down the economy. All contractors, union and non-union, benefit from the market stability that prevailing wage laws help to provide.The OLSE has investigated and charged not just non-union contractors, but union contractors as well, usually for employing workers from a lower-paid trade to perform the work of a higher-paid trade. One such case is making its way through hearings now. The contractor is Asian American and widely respected. Some in the AACA and elsewhere may see his case as an opportunity to protest the existence of the OLSE or at least to insist that it be handcuffed somehow in its performance. We will then have to defend the OLSE, and our defense will be straightforward: If anyone believes that OLSE charges are unwarranted, they should not protest outside the hearing room, whether in the halls or on the streets or through lawsuits, but should lay the facts on the table. Anyone who has run work knows the kind of careful record keeping required. Bring forth the records. Let the facts talk.
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