By RALPH BENZAKEIN //
As New York wrestles with an affordability crisis and slowing economic growth, state leaders should focus on policies that attract investment, spur development and create jobs.
Instead, budget proposals in the State Senate and State Assembly seek to expand prevailing wage laws – further increasing construction costs and discouraging much-needed projects.
The Commercial Industrial Brokers Society of Long Island has joined a broad coalition of business and economic-development groups – including the Long Island Builders Institute, the Association for a Better Long Island and the Long Island Association – in opposing this expansion. These proposed changes threaten to stall economic progress on Long Island and across the state.
New York is already among the costliest states for construction, with expenses escalating due to inflation, supply-chain challenges and persistent labor shortages. Expanding prevailing wage mandates could increase project costs by an estimated 20 to 30 percent, making it even harder to bring new housing, commercial spaces and infrastructure projects to market.
Ralph Benzakein: Construction consternation.
We have already seen the consequences of such mandates. In recent years, both the Ulster County and Yonkers industrial development agencies implemented prevailing-wage policies, only to abandon them when no new projects moved forward.
Long Island’s IDAs have played a critical role in fostering economic development, attracting businesses and creating thousands of jobs. Expanding prevailing-wage laws would undercut their ability to support job-creating projects, making it more difficult to sustain Long Island’s economic momentum.
If development slows due to increased costs, then job opportunities shrink, economic activity weakens and communities lose out on essential investments.
New York already has a system in place to determine when prevailing wage laws should apply. Under Article 224-a of the Labor Law, the state’s Public Subsidy Board evaluates projects individually to ensure that large-scale developments receiving substantial public funding meet prevailing-wage standards.
Critics claim that too many projects are exempt, but exemptions primarily apply to small-scale developments, nonprofit organizations or affordable housing – sectors that require cost flexibility to remain viable.
Building momentum: Long Island IDAs have done well supporting new construction projects — but expanding prevailing wage laws could stifle that growth.
If policymakers believe adjustments are necessary, the Public Subsidy Board has the authority to refine definitions and policies without dramatically expanding the law. Imposing broad prevailing wage requirements on private developments would only deter businesses and investors at a time when New York should be working to attract them.
Instead of enacting policies that stifle growth, lawmakers should focus on making New York a more attractive place to invest, build and create jobs. The proposed expansion of prevailing wage laws will slow construction, limit employment opportunities and raise the cost of housing and commercial projects statewide.
Governor Kathy Hochul and the state legislature must reject this proposal – and instead prioritize policies that strengthen, rather than weaken, our economy.
Ralph Benzakein is president of the Commercial Industrial Brokers Society of Long Island.
