What we’re hearing from sources close to the New York budget negotiations:
“The Executive put forth a concept of a rolling effective date based on the state of the economy. The original proposal set a firm effective date of July 1, 2021 and applicable to all agreements for construction and incentives after that date. The new proposal inserts the caveat that if the total unemployment rate in the state exceeds fiver percent during any month in the twelve month period prior to July 1, 2021, the act will not take effect. The act will only take effect until three months after the next twelve-month period where the state had no month with a five percent unemployment rate.”
The problems here are endless:
No bank will give lending based on a potential for unpredictable higher labor rates.
You can’t get insurance since you don’t know the true value of the construction project.
Bonding won’t happen.
But the biggest issue is how would a contractor bid this work?
A developer / contractor will need to consider the following:
Will have no idea what the wage exposure may be so will have no choice but to bid it high.
Bids it high, will not get the job.
Bids it wrong and doesn’t get the job, can’t continue to employ workers.
Contractor can’t make payroll. Business is over. Workforce let go.
This proves that the policy is a bad idea!
MWBE companies won’t be able to compete. They will be done for sure!
Workers will be out of work, 95% of which are Black and Latino living in the five boroughs!
Then, compound an already bad idea with the COVID-19 pandemic We will be lucky if we are only facing a RECESSION and not a DEPRESSION!
What we do know is the future of our economy is uncertain and therefore this bad policy needs to go away!