BREAKING: CA Supreme Court Says Cities Can Determine Their Own Construction Wage
The California Supreme Court handed down a landmark decision yesterday, the ramifications of which could quite likely dwarf the major wins that supporters of Fair & Open Competition enjoyed in the June 5th Elections.
First some background about California Prevailing Wage. Wages on public works construction in California (which apply whenever any public money is involved) are based on an examination of construction union Collective Bargaining Agreements (CBAs) for each of the major municipalities in California. Essentially, whatever the unions are paying their workers is the wage that the state requires all public works contractors to pay in that region. For instance, the CBA for a bulldozer driver in Sacramento determins the wage that the same tradesman must be paid in Bakersfield.
So while this high wage might be appropriate for the expensive metro economy of Sacramento, the same high wage is required to be paid in the much less expensive economy of Bakersfield, CA. This union-backed rule essentially allows labor unions to employ their metropolitan-located workers in rural communities without a loss in the amount of wage that is paid for the work region by region. In practice, this policy has led to cost over-runs on school, government building and library projects across the state.
But 121 California cities have been able to take advantage of a city incorporation designation that mirrors the flexibility advantage enjoyed by Charter Schools. Charter Cities as they are known, unlike General Law Cities, are allowed flexibility in the way they contract for outside work and can thus establish wages that are reflective of the local economy. The unions challenged one city, Vista, CA on the legality of waiving the state-mandated Prevailing Wage in favor of a locally-determined wage. After more than 6 years of working it's way through the court system the California Supreme Court ruled yesterday that in fact the practice is legal.
Kevin Dayton at the Dayton Public Policy Institute (and a former ABC colleague of mine) is amassing a collection of media reporting on the decision here. But The North County Times Reported it this way:
We'll be doing additional reporting on this landmark decision incuding the potential political ramifications to California unions and benefits to California cities in the upcoming days and weeks. So keep your eye on this blog!
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