A proposed bill—A6708/S6378—that seeks to expand prevailing wage mandates in New York is raising serious concerns among industry leaders and economic experts. At a time when the state is grappling with a loss of construction jobs and rising project costs, critics say the legislation threatens to worsen the situation rather than help.

“There’s no doubt: An overwhelming majority of New Yorkers want a future with more housing, better infrastructure and projects that support economic growth,” said Strober. “But at a time when Albany should be doing everything possible to make this happen by fostering development, a push to change construction prevailing wage laws threatens to undermine those very goals.”

The bill would dramatically broaden prevailing wage requirements and eliminate the Public Subsidy Board—a key body that balances labor, business, and public interests by determining when prevailing wage rules apply to projects receiving limited public benefits.

Strober emphasized that “the legislation…jeopardizes the state’s much needed development pipeline and removes a board that is working exactly as the Legislature intended.” He further warned that the proposal “threatens the very construction jobs proponents argue it will support.”

Last year, while 40 states saw growth in construction employment, New York lost nearly 7,000 jobs—the largest drop in the nation. “New York already faces some of the highest construction costs in the country, if not the world,” Strober noted.

The impact of prevailing wage requirements on project budgets is significant. “Construction prevailing wages can be as much as double the market wage for each trade,” Strober said. “A 2020 study from the Business Council of Westchester found that, on average, prevailing wage requirements increase the cost of construction projects by 30 percent. For many projects, that’s the difference between breaking ground or abandoning it entirely.”

Historical examples back these concerns. In 2009, the Ulster County IDA suspended prevailing wage rules after an 18-month halt in construction. Likewise, Yonkers experienced a year-long freeze while such mandates were in place—only to see a surge in activity once they expired, with $851 million invested across 12 projects in a single strong construction year.

“The state cannot afford to repeat history and not learn from our mistakes,” Strober said.

The bill’s proposal to abolish the Public Subsidy Board has also drawn criticism. The board, appointed by the governor and overseen by the State Department of Labor, includes representatives from public sectors, organized labor, and private business. It assesses whether private projects receiving less than 30% public benefits must pay prevailing wages, striking a balance between competing interests.

“Advocates for the bill are choosing to disregard important context when it comes to the Public Subsidy Board,” Strober said. “To start, the bill proposed last year to remove exemptions for brownfield projects was rightly vetoed by Gov. Hochul because it was unnecessary and unworkable.”

He added, “Second, to say that the Public Subsidy Board hasn’t met yet in 2025 leaves out an important fact: The board was scheduled to meet in March but the meeting was cancelled by the Department of Labor.”

Further, “the bill’s proponents are misrepresenting the findings of the board,” Strober said. Over the past two years, the board has reviewed 30 projects. Many projects that were exempt did not meet the threshold for prevailing wage application because they were too small, did not receive the minimum 30% public benefit, or were categorized as nonprofits, affordable housing, or historic rehabilitation projects.

Strober concluded with a warning: “This latest legislative attack on housing and job creation will be welcomed by other parts of the country who gain when New York hemorrhages through self-inflicted wounds. Lawmakers should instead focus on practical reforms that truly support construction workers and the broader economy. Our future depends on getting this balance right.”

• Prevailing Wage Impact: Prevailing wage laws require contractors on public projects to pay wages comparable to local union rates. While intended to protect workers, these mandates often raise project costs significantly, impacting overall feasibility.
• Economic and Housing Consequences: With New York facing a severe housing shortage, increased construction costs can slow development of affordable housing, infrastructure, and essential community facilities.
• Labor and Business Balance: The Public Subsidy Board acts as a regulatory check, preventing automatic application of prevailing wages on projects with minimal public subsidy, thereby helping maintain a balance between fair wages and economic viability.
• Political and Industry Stakes: Prevailing wage legislation is a contentious issue involving labor unions, developers, policymakers, and community advocates, each with vested interests.
• Calls for Reform: Stakeholders advocate for reforms focused on efficiency and fairness, rather than blanket expansions that may deter investment and job creation.

Originally reported by Kyle Strober in Libn.