By signing into law Senate Bill 7, the so-called prevailing wage bill, Gov. Jerry Brown will cost Bakersfield an estimated $600,000 to $1 million a year starting in 2015, City Manager Alan Tandy said Monday.

But union leaders and the bill's supporters say it guarantees a living wage for workers and results in more cost-effective projects.

SB 7, which Brown approved Sunday, prohibits charter cities from receiving or using state funding or financial assistance on construction projects if they have charter provisions or ordinances authorizing contractors to not pay a prevailing wage on any public works contract.

It takes effect Jan. 1, 2015, giving cities about 14 months before they must comply.

The prevailing wage varies by county, but is determined by the state department of industrial relations, which asks contractors what they pay their workers, then calculates an average wage.

A spokesman for the bill's principal author, Senate President Pro Tem Darrell Steinberg, D-Sacramento, has offered evidence that prevailing wage laws save tax dollars by increasing productivity and improving workmanship.

John Spaulding, executive secretary of the Kern, Inyo, and Mono Counties Building and Construction Trades Council, hailed the bill's approval.

"We're ecstatic. We've been following this bill for quite some time," Spaulding said. "I just feel (not paying prevailing wage) was the wrong decision for the city of Bakersfield to do."

Tandy said paying prevailing wage will cost about 20 percent more on the $3 million to $5 million in public works projects per year on which the city does not currently pay prevailing wage.

"They'll be a sewer line replacement or a well maintenance contract in the water department. They tend not to be the big visual ones that you might see as you drive around town," Tandy said.

Shafter City Manager John Guinn called the law "extortion," estimating it could affect between $3 million and $10 million in public works projects per year.

"I think it's obviously up to the city council, but I imagine that we will continue to use our charter city capability and forego the state's money," Guinn said.

Tandy said that if Bakersfield did that, it would have to do without more than $40 million in state grants it receives per year.