Builders in San Jose have to hire union workers and pay living wages on public projects worth $6 million or more, according to a new policy adopted by the City Council.
The compromise measure proposed by Councilman Chappie Jones and approved in a 6-5 vote Tuesday means contractors can assign up to 35 of their own workers, but have to hire the rest from local unions. As part of the labor deals, developers will also have to pay state-set prevailing wages, provide fringe benefits and hire at least some apprentices from disadvantaged groups.
Labor-friendly councilors—namely Don Rocha, Sylvia Arenas, Sergio Jimenez and Vice Mayor Magdalena Carrasco—voted against Jones’ proposal because they wanted the labor agreements to lower the construction value threshold to $2 million, so it would apply to more projects. Mayor Sam Liccardo wanted to set the benchmark at $10 million.
The project labor terms set by the council Tuesday apply to only three upcoming projects. For another 17, it’s business as usual. However, the city’s new threshold far exceeds the state, which requires union hires for contracts worth $30,000 and up.
Councilman Johnny Khamis and other opponents of the labor agreements say they hurt competition and drive up the price of construction. During the contentious council hearing Tuesday—which dragged on for hours and included several failed compromise measures—Councilman Raul Peralez questioned the credibility of some research cited by Khamis, Liccardo and other critics.
— Ramona Giwargis (@RamonaGiwargis) October 25, 2017
Backers of the labor deals cited a peer-reviewed study from the UC Berkeley Labor Center, which found that the agreements do not inflate the construction costs.
Supporters argue that these binding agreements between developers and unions prevent wage theft and help workers afford living in Silicon Valley, which is grappling with a historic affordability crisis. Several other major cities and jurisdictions, including San Francisco and Oakland, have similar policies.