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Business and Economy

Wage-And-Benefit Initiative Has Portland Mayor At Odds With Some Businesses — And The City Manager

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Congress Street Portland, Maine

A union backed wage-and-benefit initiative introduced by Portland Mayor Ethan Strimling is putting him at odds with the business community at the local and state levels — and at odds with the City Manager.

Strimling wants all city contracts worth more than $50,000 to require that vendors pay workers the regional prevailing wage and participate in an apprenticeship program. He also wants to give those vendors who provide more benefits, such as safety training and health care coverage, extra points in the bidding process.

"I think it's important because, one, it creates a fairness on the job,” says Don Nazaroff, a representative of the state Sheet Metal Worker Union.

Nazaroff was one of about three-dozen supporters of Strimling's proposal — mostly union members — who turned out for a public hearing at City Hall this week.

"My contractors have a hard time competing against the non-union, for the fact that they treat their employees fair, they give them a real decent wage, they give them health care and they give them a retirement benefit,” Nazaroff says.

Prevailing wages for construction jobs in Cumberland County range from $12 per hour for a flagger, to more than $28 dollars per hour for licensed electricians, according to the state Department of Labor.

Speaking for the Portland Regional Chamber of Commerce, Simon Thompson came down firmly against the initiative.

"The Chamber is very concerned about the fiscal impacts of this proposal to public works projects in the city and the resulting strain that would be passed on to taxpayers,” says Thompson.

Citing a city staff memo exploring fiscal impacts, Thompson says the city would have to add staff to enforce compliance with the prevailing wage requirement. The same memo found that the cost of city contracts could balloon as much as 30 percent.

The memo relies heavily on consultant studies from other states that were conducted by free-market think-tanks with ties to conservative funders, including the Koch brothers.

"I'm not a big fan, nor do I spend all of my time thinking about these reports, both on the progressive side and on the conservative side, because they have an agenda,” says City Manager Jon Jennings.

Putting aside political ideology on both sides, Jennings says he can't get behind the initiative for another reason.

"You talk to the people on the ground in the state of Maine, the contractors, the companies, you get the real picture,” he says.

Strimling's proposals, Jennings says, would exclude many Maine-based vendors, who are telling the city they don't have the capacity to administer compliance or participate in apprenticeship programs. He also says many local contractors would not be able to commit to health care coverage or other benefits Strimling wants to reward with extra points in contract bid processes.

Jennings says the result would be more bids — and more expensive bids — won by out-of-state vendors, particularly big companies based in Massachusetts, which does require prevailing wages for most public works projects.

"And we'll be left out of working with some Maine contractors, so that leaves us more out-of-state contractors that have the provisions that the mayor's talking about,” says Jennings. “This is kind of a model based on what Massachusetts does."

Mayor Strimling says he's disappointed that city staff, as he put it "put their thumb on the scales" by turning to conservative think tanks to analyze the proposal's costs. And he cites other studies, some by academics, some funded by labor, that find little added cost for taxpayers when prevailing wage programs are in place.

"What these studies have shown is that they've got to pay people the same wage, and it becomes more effective for them to just hire people locally because they can't bring in cheap labor from elsewhere,” says Strimling.

While union workers turned out in force to support Strimling's plan, the only opponents to speak were the Chamber of Commerce and the president of the Associated General Contractors of Maine. No actual vendors attended. That could change if Strimling is able to get his measure out of committee and before the full City Council.

Originally published Oct. 11, 2018 at 5:08 p.m. ET.