I am owner of Sticky Lips BBQ and Park Avenue's Chester Cab Pizza. I have been self-employed for over 30 consecutive years and now have more than 200 people on my payroll.
In his recent opinion piece ("Sticky Lips owner blames everyone but himself," RBJ, 6/15/12), David Young Jr. may have confused the readers by stating that I "chose to take assistance from the state" to build the Sticky Lips Pit Barbecue Juke Joint in Henrietta and that I didn't want to live up to my responsibilities.
Let me make this clear: I did not use a dime of taxpayer money. The project was totally self-funded.
The building was listed with a commercial broker and had been on the market for almost two years before I bought it and closed the deal with the Genesee Valley Regional Market Authority. This was my first commercial deal in Henrietta, and I was given no indication that there would be a prevailing wage issue. It never came up during negotiations. The question of prevailing wages was first brought up after a visit from the electrical union rep three-quarters of the way into the project.
The building was in great need of repair and restoration. I am on a land lease and pay the market authority a rent; it is no different from many of the other restaurants on Jefferson Road. I also pay property taxes, and in fact my 2012 assessment with the town has more than tripled from my 2011 assessment.
The building was constructed in 1998 by a private company, and it was built from the ground up as a Roadhouse Grill Restaurant. Incidentally, two of the contractors that worked with me had been involved with the original construction, and in 1998 prevailing wages were not applied to that project.
Prevailing wages began with the Davis-Bacon Act of 1931, a statute requiring that contractors on federal construction projects pay the prevailing wage. Since the Davis-Bacon Act, New York State has also instituted a prevailing wage minimum standard on state projects. Often prevailing wages will mimic the wages of local unions.
Mr. Young says if I don't like the law, I should try to change it. He goes on to state that changing the law would be tough because the founders of our state felt so strongly about protecting local businesses, they enshrined the prevailing wage in the state constitution.
Well, actually what happened is that our first state constitution was formed in 1777 (years before the 1931 act). The state's constitution has been changed over 180 times since then. Obviously, frontiersmen and farmers were not thinking about prevailing wages with Great Britain's guns pointed right at them.
In truth, Robert Bacon was a Republican representative from New York. During the construction of a Veterans Bureau hospital on Long Island in 1927, the contractor who won the bid was from Alabama and employed many black workers. Bacon was bothered that construction workers in his district had lost out on the job, and he introduced a bill that would prevent migrant labor on federal projects. The bill passed in 1931, but the hearings and debate contained some ugly racial overtones, with comments on how "cheap colored labor" was driving down wages of white workers. More recently, we see fears like this regarding the hard-working Mexican labor force in the Southern states.
Twenty of the 50 states do not have prevailing wage rates, and it so happens to be that the majority of those states have led the nation in population and job growth. How are the prevailing and union wages hurting us? It costs 30 percent to 40 percent more to build public buildings in New York, and that comes out of taxpayers' pockets. That is one reason why our taxes are much higher than the rest of the country.
Mr. Young also states that the truth is simple, that I violated the law and got caught. I agree with Mr. Young that the truth is simple: It is simple to see that a privately held building on state authority land does not qualify as a public works project. Remember, two conditions must be present for the prevailing wage requirement established by New York Labor Law 220 to apply:
- A public agency must be a party to a contract involving the employment of laborers, workers or mechanics; and
- The contract must concern a public works project. To be a public work, the project's primary objective must be to benefit the public. Ownership (public or private) is also a factor in determining whether a project is a public work.
There have been many court cases to back this up. Likewise, when a party holds all the benefits of potential profits or the risk of loss and when no public money was used for the project, it is not a public work. See 60 Market Street Assocs. v. Hartnett.
Mr. Young didn't mention that his day job is as business manager for the International Brotherhood of Electrical Workers Local 86. The Rochester Building and Construction Trades Council, for which he is president, has a membership of exclusively local union shops. His organization does not speak for the non-union construction companies that often come up against union tactics like what I had to deal with-tactics such as calling OSHA or the state Labor Department to your job site, "salting" a non-union job with union tradesmen, and other tactics that are meant to tie up contractors with court expenses or red tape. If you don't believe me, call OSHA or the Labor Department and check their phone records to see where a majority of incoming complaints come from.
Mr. Young also brings up Southern states--"right to work" states like Texas and Alabama. Now don't let New York State unions make you believe that they are the only ones that know how to build. The South may have lost the Civil War, but it has kicked the unionized Northern states in job and population growth. More construction workers and building-related jobs are being created in the South.
During the recent recession, we have had more unionized construction workers on the bench collecting unemployment. Many came onto the Sticky Lips construction site, looking to moonlight. I have nothing against unions or the good people who have joined them. As Mr. Young wrote, we have a higher cost of living than most of the country, and prevailing wages protect all workers from a race to the bottom. So we need to ask, did we win the race to the top? Because if we did, it certainly didn't help all the people of New York State. We pay some of the nation's highest income taxes, highest property taxes and highest liability insurance and workers' comp insurance rates.
So I ask you, Mr. Young, is it better? Did we create more poverty in our state, because of our high property taxes and union wages that keep big manufacturing concerns from moving into our state? Shouldn't we let the laws of free enterprise, supply and demand and capitalism take hold?
I don't think New York State is a bad place to do business in, as Mr. Young suggests. Lately, New York has been a tougher state to do business in. I love New York, and I believe I may be more vested in Rochester than Mr. Young is. I know what it is like to try and meet a payroll every week. I know what it's like to work 50 to 60 hours per week and sometimes go without a paycheck. I know what it's like to work when you're sick. And I know what it's like to put your life savings into a dream.
I believe I am the type of businessman the state wants. Like all of us in small business, all I ask is to keep government out of our pockets, keep the unions off our backs and let free enterprise bring back New York to the Empire State it once was.
Howard Nielsen is owner of Sticky Lips BBQ and Park Avenue's Chester Cab Pizza.6/29/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.