March 23, 2020
City of West St. Paul
1616 Humboldt Ave.
West St. Paul, MN 55118
RE: Prevailing Wage Standard
Mayor Napier and Councilmembers:
As organizations that are committed to both expand access to affordable housing and promote the welfare of working families, we urge the City of West St. Paul to continue its policy of requiring payment of prevailing wages in the construction of taxpayer-subsidized economic development projects, including affordable housing.
Prevailing wage standards provides an important safeguard for taxpayers and workers alike by helping to safeguard construction quality, preserve a competitive environment for area contractors, strengthen the local tax base, and protect workers from exploitation. A recent study of Minnesota’s state prevailing wage law found that the law increases the annual incomes of construction workers by 5.2%, expands health insurance coverage by 5%, improves pension coverage by 5.3%, and decreases the use of food stamps by 2.1% for construction workers. Minnesota’s prevailing wage law also improves the local economy financially by generating $37 million in state and local tax revenues.
Removing prevailing wage requirements will erode the wage floor that keeps blue-collar construction workers above the poverty line and provides them with the income they need to pay for housing. Studies indicate that the repeal of prevailing wage protections is associated with declines in the average hourly wage for blue-collar construction workers on both public and private construction projects.
Prevailing wage policies also function as a tool to prevent wage theft and exploitation of immigrant workers, which represents a growing problem in multi-family housing construction. A recent housing forum in Minneapolis highlighted the concerns of workers and tenants who have been pitted against one another by developers that wish us to believe we must choose between housing affordability and fair wages for construction workers.
Forum participants, including municipal elected officials and staff from more than a dozen counties and cities across the Twin Cities metropolitan area, heard testimony from a construction worker who reported working on Dominium’s Legends of Spring Lake Park project for a subcontractor whose practices he compared to: “a chain of theft that goes down, down, down and those people at the very bottom – those of us in the Latino community”. The worker explained that when he finally quit his job, his boss tried to pay him in cocaine.
Forum participants also heard from tenants who shared troubling accounts of their treatment at the 834-unit Huntington Place Apartments in Brooklyn Park, which was then owned and operated by Dominium. Their accounts invoked a 2019 MinnPost article on the apartment complex which detailed how, “residents for years have reported safety issues, unfair treatment from management and poor living conditions, including mold and asbestos in the walls.” MinnPost reported complaints from advocates that people were putting in work orders and they were “not getting work done.
At the conclusion of the forum, elected officials from cities such as Bloomington, Minnetonka, St. Louis Park and Richfield pledged to take action to end wage theft and tenant neglect across the housing industry. They committed to supporting stronger wage theft protections and to pursuing policies such as prevailing wage standards to ensure workers are paid family-supporting wages.
We don’t need to sacrifice worker well-being to deliver affordable housing. Developers should not be allowed to pay substandard wages on publicly-subsidized housing projects in West St. Paul. When taxpayers help finance an affordable housing project, they rightfully expect that workers on that project will make a good, family-supporting wage. We ask that you maintain a strong prevailing wage standard for all projects that receive Tax-Increment Financing.
Finally, we ask that you refrain from attacks on workers at a time when it is impossible for our members to attend Council meetings. Our members care deeply about protecting workers that build taxpayer-subsidized affordable housing, and would like an opportunity to face their elected officials and express their concerns. In the midst of the COVID-19 public health crisis is not the right time to hold a “public” hearing when the public cannot be present. We ask that you reject the proposed repeal of prevailing wage protections and instead commit to working with our organizations to pursue affordable housing strategies that protect tenants and workers alike.
The City of West St. Paul is a leader in maintaining a high standard for the workers that build publicly subsidized affordable housing. We urge you to maintain the existing prevailing wage standards to protect workers and maintain opportunities for local construction contractors.