Why is New Jersey such an expensive state to live in? According to at least one State Senator it is because of wages paid to union tradesmen for public works projects. This proposition is unfair and a bit insulting to the men and women who have built this State.
New Jersey’s economy is built on the bedrock laid down by the men and women who built our roads, bridges, dams and schools. The same people constructed our power-generating stations and do the dangerous work every day of stringing high-voltage lines across our state so our residents can have uninterrupted power at the flick of a switch. And that power goes to luxury office buildings in every county – built by tradesmen – that are home to the attorneys, engineers, bond counsels and architects who are living comfortably and making up to four times more money — much of it from government coffers — than any tradesman.
Despite the obviously valuable contribution of tradesmen to our state, Sen. Mike Doherty, an attorney, has revived the proposition that the state’s unaffordability is due to the prevailing wage law. (The prevailing wage is the union wage scale for skilled trades workers in publicly financed projects.) There are many things that make New Jersey expensive, but the prevailing wage law ranks dead last.
New Jersey ranks at or near the bottom in every measurable economic index from property taxes, to debt, to business environment. Despite the obvious need to cut spending and borrowing, Sen. Doherty, in a published essay, blames skilled labor for the state’s high cost of living. He finds trade unionists making $68 an-hour for public projects untenable. But that wage is a pittance compared to the money that those in his profession take from taxpayers.
The senator deliberately omits any discussion of the large share of public project costs that is paid to lawyers, bond counsel, engineering firms, architects, underwriters, financial advisors and other “consultants.” These professional fees are collected in two ways; one as professional advisor to a government body undertaking a project and the other as consultants used to execute the borrowing to finance the project. These fees are paid at every level of government and at dozens of obscure agencies and authorities, such as county improvement authorities.
For example, last year the Passaic County Freeholders funded construction of a new public works building and bonded $17 million through the county improvement authority. The fees paid to lawyers and other financial consultants to borrow that money was $241,000! Over in Bergen County, the improvement authority there paid out more than $431,000 in professional fees each for six of its last 10 financings – topping out at $674,000 for one refinancing package! State government pays similar sky-high fees to professionals.
The fees paid to execute borrowing are not competitively bid nor are they publicly reported and, therefore, off the radar screen. Similarly, legal, engineering and architectural work commissioned by governments for construction projects are not subject to the state’s bidding laws so government officials can hand the plug-and-play jobs to anyone they wish at a cost of millions of dollars to unsuspecting taxpayers. Competitive bidding and transparency are needed to hold down the costs of professional services, but I don’t see anyone in the legislature proposing that – perhaps because there are so many attorneys in Trenton protecting their turf.
For politicians to decry the high cost of living in New Jersey and then turn a blind eye toward the lucrative dark-money industry of professional fees is at best hypocritical. Don’t those fees contribute to the state’s affordability problem?
Over the past decade, good paying jobs in NJ are disappearing as corporations move to less expensive states. Manufacturing jobs have been pushed out for decades; replaced by low wage service jobs. And thanks to the internet economy, even low wage retail jobs are disappearing. The only jobs that New Jersey seems to entice lately are low-wage warehouse jobs
The money paid to union tradesmen represents among the few good-paying jobs that still exist in this state for blue collar workers.
The purpose of our prevailing wage law is to make certain that those who are charged with updating our electrical, water and road infrastructure are capable of sustaining themselves and their families in this very expensive state – a state made more expensive by the professionals’ generous and under-reported fee arrangements. The prevailing wage money paid to tradesman is circulated in our economy to support businesses and “grow the pie”. The prevailing wage also helps ensure that contractors hire skilled, knowledgeable workers trained, not only in their craft, but in safety precautions as well. If Sen. Doherty had his way, state contractors could hire unskilled labor or illegal immigrants and pay them whatever they pleased. From an attorney’s perspective that may seem okay, but it is not fair to working people or good for our economy.
To create an affordable New Jersey, our elected officials at every level of government need to summon the courage to cut unnecessary spending and embrace the discipline to set spending priorities and stick to them.