Why Economic Recovery Act of 2020 is needed stimulus for construction industry

Gov. Phil Murphy recently signed the New Jersey Economic Recovery Act of 2020. Interested parties hailed the $14 billion in tax credits that will prompt a new effort to stimulate our economy, devastated by the coronavirus. Indeed, in a recent media outlet, more than 30 individuals representing business, municipalities, labor and education affirmed this legislation’s anticipated positive effects.

When we read about these large, comprehensive economic policies, it is often difficult to determine their direct impact on the state’s citizens. For those of us in the construction industry, union carpenters and their signatory contractors will keenly feel these effects. It will help to anchor and stabilize income for craftworkers in the middle class.

By stimulating construction activity and growth in New Jersey, the consequences extend to the workers employed on these numerous projects because of the prevailing wage that craftworkers earn.

Public construction projects in New Jersey are subject to prevailing wage mandates. The Prevailing Wage Rate Determinations list the wage and fringe benefit rates based on collective bargaining agreements established for a particular craft or trade on the locality in which the public work is performed, according to the Department of Labor & Workforce Development. In New Jersey, rates vary by county and statewide by the type of work performed. This effort attempts to reflect the prevailing wages in the area where the construction occurs.

Prevailing wage is not an indication of the training that workers have on a job site. In the bidding process, unions often use “qualified bidder language,” highlighting the extensive training regimen that its workers bring to every project.

Prevailing wage provides an economic impetus that municipal legislators and officials should applaud. With a healthy wage structure, its residents are economically more capable of supporting, indeed improving, municipal functions and services backed by local tax dollars.

We must not forget that the New Jersey prevailing wage model has stood the test of time for more than 100 years. For New Jerseyans, this is a robust reality exemplified by the projects built under prevailing wage guidelines. They include:

  • The Hon. Frank J. Guarini Justice Complex, Jersey City, $300 million;
  • MLK Justice Complex, Newark, $70 million;
  • Orange High School, Orange, $40 million;
  • Interstate 80 bridge over the Rockaway River, $20.8 million;
  • Westwood Regional Middle School, Westwood, $18 million;
  • New Community Center and Library, North Bergen, $13.5 million.

There is also a geographic component linked to prevailing wage that often goes unrecognized because it is so commonplace. Those working on projects under prevailing wage — union or nonunion — often live in the project’s proximity.

These workers contribute to their communities via state and local taxes and frequently support their local businesses. In the case of union carpenters, they often offer their skill set as volunteers for projects that assist residents or community organizations in need.

A prevailing wage is not a ticket to wealth. It merely assures that craftworkers — often with years of training — receive compensation for their talents and efforts. We continue to hear about the growing divide that separates haves and have nots. A prevailing wage is the demonstrative result of an action that bridges these differences, allowing those in New Jersey’s construction industry to enter and remain in the American middle class.

This is why it might be acceptable to add a different shade of meaning to the term “prevailing wage.” A more realistic name might be “living wage,” because that is precisely what construction projects in New Jersey bring to those who offer their time, skill set and professionalism. The prevailing wage mandates, in the end, provide for this livable wage for both union and nonunion workers.

With the passage of Murphy’s recent New Jersey Economic Recovery Act of 2020, the effects might take some time before we appreciate its impact. However, for those of us in the construction industry, it is a burst of hope and a financial anchor that we need for 2021, after a year of challenges unseen in most of our lifetimes.

Patty Grant is the industry and media relations manager for the Carpenter Contractor Trust.