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Prevailing Wage in New York State: The Impact on Project Cost and Competitiveness

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Abstract:

Industrial development agencies (IDAs), the primary economic development entities in most NY communities, turned to CGR for independent analysis related to two key issues. First, proposals before the NY Legislature would require projects funded by IDAs to pay construction workers prevailing, instead of market, wage. Second, a 2007 report by a New York City coalition (Jobs with Justice) working on behalf of the poor and working class, had raised questions about the job creation record of IDA-assisted projects.

CGR found extending prevailing wage to the private sector would significantly inflate NY’s already above-average construction costs and weaken the state’s ability to compete in the ongoing competition for major development projects. In a separate analysis, CGR found the job creation record of IDA-assisted projects to be significantly better than the coalition had claimed. A summary table of the many differences between the two reports is included in the report.