NYC Construction Safety Bill – Helpful? or Just a Barrier to Non-Union Workers?

Since January 1, 2015, 31 construction workers have died in New York City construction worksite accidents.  A New York Times investigation into the spike in construction worksite deaths in late 2015 spotlighted that these deaths were not only preventable, but often glaring and tragic results of poor training, systemic disregard of common sense physical safety regulations, and inadequate supervision that mostly affected undocumented immigrant laborers.

Several laws were passed to mandate improved safety.  However, the most comprehensive bill has been stalled.   Some legislators have expressed opposition on the grounds that these bills would result in taking jobs away from minority construction workers and contractors.

This bill would require that every construction worker on projects over three stories receive 59 hours of safety training.  New York City construction unions have generally supported the bill.  Their critics contend that they support it because some of their members have already received the requisite safety training and would be exempt from the new bill’s requirements.

The debate on this one bill illustrates a problem with respect to construction trades around the country.  The influence of trade unions that not only garner higher wages but provide training and insist on safety precautions for their members is increasingly missing nationally.  In the early 1970s, 4 in 10 construction workers were union members; today less than 1 in 10 is.

Investigations by OSHA into the spate of construction deaths in New York conclude that non-union worksites are more dangerous than union worksites.  For instance, in 2012 2012, 79 percent of all fatal falls at construction sites occurred at non-union construction sites.

American construction workers today make $5 per hour less today than they did in the early 1970s, after adjusting for inflation.  Even as home building activity increased from 2011 to 2016, hourly wages for construction workers rose slower than for average private sector pay.

In addition to deteriorating pay and working conditions, the absence of trade unions also results in fewer opportunities to progress from unskilled laborer to skilled laborer.  The shortage of skilled laborers is consistently cited by sources like the National Association of Home Builders as a reason for a disappointing stock of new homes.

In New York City, legislators are seeking to fill the void left by trade unions with respect to safety.  The bills that the New York City council passed greatly increase fines for safety lapses.  However, this is a convenient posture because it means the City can take money when it catches someone else making a mistake.  The City is balking at requiring increased training because this is unpopular with a powerful real estate lobby and against the short term interests of some minority contractors.

In addition, New York City, like many governmental bodies around the country, is a dubious ally with respect to worker safety because they have their own financial problems. New York City has an enormous pension deficit, somewhere between $65 billion and $145 billion depending on who is counting.  Budget problems that large are a disincentive to the passage of any laws that could cause their own expenses to go up on jobs that they contract out.

 

 

 

About Chris Donnelly

Christopher J. Donnelly, is an experienced attorney, bond analyst and fixed income strategist, with years of experience in structured finance, distressed bonds and bond related litigation in a variety of industries and the emerging markets. He is a graduate of Rutgers University (BA), The University of Pennsylvania (JD) and New York University, (LLM in Taxation). Chris is a Managing Director of Straacom, LLC and can be contacted at cdonnelly@straacom.com. Straacom provides strategic research, analysis and communications for publication and on assignment for private clients.

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