Powerful Labor Leader Tells Lawmakers to Keep Their Hands Off Prevailing Wage Laws

This story was produced by the Oregon Journalism Project, a nonprofit newsroom covering the state.

Few pieces of legislation in the current session have generated more substantive disagreement than Senate Bill 1566, which would clarify and tweak existing prevailing wage laws in order to increase the supply of affordable housing and child care.

Increasingly, the issue has driven a wedge between traditional allies: nonprofits and affordable housing developers on one side and trade unions on the other.

As expected, all sides testified in Salem on Feb. 9. But what was remarkable to veteran Salem watchers was when a high-ranking trade union official warned lawmakers not to consider such reforms again.

As OJP has previously reported, the Oregon Bureau of Labor and Industries, which interprets prevailing wage laws, has increasingly come down on the side of trade unions, who understandably want their members to be paid as much as possible.

BOLI’s interpretations, according to developers, have meant large cost increases—on the order of 10% to 20% of project costs. That means fewer housing units get built and some projects, including new child care facilities, simply do not happen.

State funding for affordable housing has exploded over the past decade, going from virtually nothing to well over $1 billion in total. As funding increased, BOLI has made a number of decisions that developers say are at odds with the law and with past practices. The agency has told developers that the use of state bond dollars triggers prevailing, i.e., union, wages; that public investment in streets and utilities adjacent to private development also triggers higher wages; and that commercial uses—such as day care on the ground floor of a housing development exempt from paying prevailing wages—also now trigger the higher wages for entire projects rather than just the commercial portions. (BOLI insists it is interpreting the laws correctly.)

SB 1566 attempts to clarify the law in each of those areas.

On Feb. 9, the trade unions, including electricians, sheetmetal workers, ironworkers and painters, filled a Capitol hearing room and made their case to the Senate Committee on Labor and Business in opposition to SB 1566.

“Presenting carve-outs to prevailing wage coverage as a policy solution to high costs of housing and child care is a false choice,” a coalition of eight union groups said in written testimony. “By taking the proactive step of cutting wages and benefits, the Legislature would send a clear signal to Oregon’s skilled workers that their ability to support their families is not a priority.”

Housing developers, representatives of Oregon cities short on housing, and some service providers, however, told lawmakers that BOLI’s interpretations are causing hardship.

Many new affordable housing projects around the state, for example, have empty ground-floor spaces where developers had hoped to site child care facilities. They did not do so, however, because of BOLI’s position that a commercial use, such as child care, negates the exemption from paying prevailing wages for the entire development.

Dana Hepper, director of the Children’s Institute, an advocacy group, told lawmakers that because of the “child care crisis” in Oregon, the state created funding to co-locate child care in affordable housing projects.

“[But] nonprofit housing developers may not be able to access this co-location support,” she added, “because including any commercial space, including child care, would trigger a prevailing wage requirement to which they were otherwise not subject.”

Child care, of course, is not a partisan issue. Nor is Oregon’s acute shortage of housing, for which Gov. Tina Kotek and other top elected officials have declared an emergency. But Sen. Dick Anderson (R-Lincoln City), who sponsored SB 1566 along with Rep. Vikki Breese-Iverson (R-Prineville), is pessimistic that his bill will get any more oxygen this session.

That’s because of the powerful voice that spoke last and loudest on the bill.

Robert Camarillo is executive secretary of the Oregon State Building and Construction Trades Council, which represents 30 member unions. Rather than address specific parts of the bill, Camarillo simply told lawmakers to keep their hands off the prevailing wage law.

“This is something we strongly oppose,” Camarillo testified about SB 1566. “I urge you not to entertain these types of proposals in the future.”

“This is not something we will ignore,” he added.

Camarillo won’t have to worry. Anderson told OJP on Feb. 12 that he has been told by Democratic leadership his bill won’t move forward.

“It’s disappointing, but predictable, to see ‘Big Labor’ prioritize rigid adherence to prevailing wage rules over the urgent need to build more affordable housing in Oregon,” says Anderson, who is also the vice chair of the Senate Housing and Development Committee.

“If the Democratic majority truly wants to stand up for housing affordability, they should go further and pass this bill to actually build more housing,” Anderson adds. “Until they stand up to the unions, we will see a continuing spiral downward.”

Camarillo did not respond to a request for comment.