San Jose Revisits Prevailing Wage for Private Construction

San Jose lawmakers on Tuesday will revisit a debate over construction companies hiring local workers and paying them prevailing wages on city-subsidized construction.

In June, the City Council approved a law to prevent contractors from exploiting low-wage workers. The decision was part of a lengthy process spurred by negotiations between labor unions and the city. The South Bay Labor Council, its affiliate nonprofit think-tank Working Partnerships USA, the Santa Clara-San Benito Counties Building Trades and the Mechanical, Electrical, Plumbing, and Sprinkler Fitters Union were considering a potential ballot measure to enact a gross-receipt tax on large corporations.

Labor leaders, however, pulled the measure in exchange for San Jose adopting certain workforce standards that would ensure workers collect prevailing wages. At its June 25 meeting, the council moved forward with the first part of that deal—opting to study other aspects, like the local hire requirement, at a later date.

According to a July 24 memo from San Jose Economic Development Director Kim Walesh and Public Works Director Matt Cano, city officials are now recommending that the council adopt a law that encompasses all of those components. Walesh and Cano previously cited legal, administrative and enforcement resources as reasons why the study of local hire provisions was taking so long.

“[The first law] was limited to prevailing wage requirements and did not include provisions for apprentices, local hiring and targeted workers because these provisions needed further analysis,” Walesh and Cano wrote. “Staff anticipated bringing back a second ordinance that would address minimum labor requirements for using apprentices, local workers and underrepresented workers.”

The core of the new law addresses what constitutes a city subsidy, local hire provisions and exclusions for affordable housing developments.

A point of contention at the June 25 meeting was whether the downtown high-rise incentive would be considered a subsidy. The program looks to expedite development by cutting certain fees. But developers say that an increased cost of labor would delay building.

In preparation for Tuesday, Elisabeth Handler, a spokesperson for the economic development department, said that the city does consider the high-rise incentive program a subsidy by definition.

If the council gives the proposal the green light at its first meeting post-summer recess, private construction companies that receive subsidies must “use good faith efforts to have ‘local residents’ perform at least 30 percent of the total work hours necessary to complete the construction work.”

City officials referred to San Francisco's local hiring policy for construction to help define a “local resident.” In this case, it's someone who is “domiciled”  in Santa Clara County for at least seven calendar days before starting work on the project. That means the person has the intent to stay and live in the area.

Construction companies accepting city subsidies would also need to use “good faith efforts” to hire "underrepresented workers as entry-level apprentices to perform 25 percent of the total apprentice hours.”

The city has defined “underrepresented workers” as people who receive government assistance, are at risk of losing their home, are a veteran or are a survivor of labor trafficking, among other things.

The San Jose City Council meets at 1:30pm Tuesday inside the council chambers at City Hall, 200 E. Santa Clara St. in San Jose. Click here to read the agenda. 


  1. San Jose lawmakers on Tuesday will revisit a debate over construction companies hiring local workers and paying them prevailing wages on city-subsidized construction.

    In other words, this is a tax.

    And why is the reporterette writing as an advocate for unions and politicians? That puts her at odds with the declining fraction of the public that’s expected to pay this tax, along with all the other taxes.

    …oh, ‘scuse me. She did put in one short, gratuitous sentence that looks like it was invented on the spot, and can’t be verified.

    Would it be asking too much to spend fifteen minutes on the phone, getting a few quotes from named spokespersons on the other side of this über-stooopid proposal? I’d even be willing to put in my 2¢. For example:

    “Why are our ‘representatives’ throwing our tax money at something like this? If the Mayor and Council waqnt to subsidize people with such a low bar for accountability, they’ll game the system in no time.

    “And where’s the emergency? These companies already have a hard time getting enough workers in this economy, and that’s already pushing up wages. No government assistane is needed. If there was ever a proposal that isn’t necessary, and that will cost (actual) residents more money, this one would be in the running. Maybe even in the top five.”

    Councilcritters and the Mayor need to pay attention to the whole city, and not be such obvious lap dogs for the South Bay Labor Council. Who does the Council and Mayor represent, anyway? This proposal makes them nothing more than union toadies — and these unions are always trying to get their fingers deeper into our pockets. Why does the city government help them, and it’s always at our expense?

    If our ‘representatives’ can’t even say “No” to something like this, it’s no wonder we’re paying up to half of every dollar we earn in taxes! And with both the local government and these self-serving unions tag-teaming long time residents, that ratio will become even more lopsided.

    Finally, is it asking too much to have some balance in these propaganda pieces? And to not appear like I’m monkey-piling just on one reporter, here’s the Council’s definition of a San Jose resident:

    …someone who is “domiciled” in Santa Clara County for at least seven calendar days before starting work on the project. That means the person has the intent to stay and live in the area.

    “Yeah, I been ‘domiciled’ here with me pal fer the past umm-m, seven calendar days, is it?, sleepin’ on his couch. And sure, I ‘intend’ to stay here — fer as long as this subsidized job holds out… no, really!”

    So once again, the hard-bitten taxpayers are the chumps — the patsies, who are expected to pay the freight, as usual.

    Remember this Council and Mayor at the next election. It’s the least we can do.

    • This story is a preview story. In other words, it’s a sneak peek of what’s to come at tomorrow’s meeting. I drew on the information from the city staff packet. You can check back on San Jose Inside’s website tomorrow evening with more information about the proposal, the debate at council and the decision.

      • Grace: With all due respect, your response to Smokey is a Pravda answer. He’s asking why you couldn’t talk to people outside the city government regarding the upcoming debate. You are under no obligation to single-source a story, even a preview story, with only city staff officials. By doing so, you frame the upcoming debate in a partisan manner and end up looking like a stenographer for government spokespeople. We are looking to SJI to be a step above Spotlight and not take statements at face value and ask the harder questions. This article doesn’t; I know from your previous work you can do better.

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