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September 11, 2009

‘Remarkable slowdown’ in wage growth imperils economy, study says

Obama proposes pro-PLA rules, seeks to extend them to other projects

Thousands of workers from around Michigan celebrated labor’s day, anyway on Labor Day 2009

Big drop for construction fatalities

Decade-long safety record shows improvement, too

Bigger, better, Battle Creek Central H.S. on the way

News Brief


‘Remarkable slowdown’ in wage growth imperils economy, study says

This Labor Day, many American workers will be watching their pennies as much as they watch the annual parades. This year, working people across the board are being hit with an unprecedented array of economic problems, ranging from a lack of jobs to reduced wages for those who have jobs.

The impact of the recession goes far beyond those people who are unemployed or underemployed. A combination of slow wage growth, mandatory unpaid leave and a drop in benefits is going to make it harder for the economy to recover, says a leading economist.

During a conference call with reporters on Sept. 2, Lawrence Mishel, president of the labor-backed Economic Policy Institute (EPI), said the recession is hitting working people hard across the board, including white-collar workers, blue-collar workers, women, men, union members, nonunion workers and both college and high-school educated workers.

EPI has released a briefing paper, “The Recession’s Hidden Costs: Workers Lucky Enough to Keep Their Jobs Still Feel the Pain in Their Paycheck,” which chronicles the widespread pain being spread by the recession.

Mishel points out that private-sector wages grew only by 1.3 percent between December 2008 and June 2009. Meanwhile, production and non-supervisory workers – representing about 80 percent of employees – have seen their annual wage growth slow drastically to 1.4 percent after a relatively steady growth of 4 percent from 2007 to 2008.

This sluggish wage growth could have a serious dampening effect on the economy, Mishel says. “Right now,” he said, “wages are growing slower than the rate of inflation, and we’re going to see real wages falling remarkably in the months ahead.

He added: “It’s really just Economics 101. With high unemployment expected to continue and spending power shrinking for those who are working, businesses don’t have enough customers – and without customers they can’t invest enough to create enough jobs to dig us out of this hole. That leaves government as the only credible player that can make the investments on the scale that’s needed to get jobs, wages, and the economy growing again.”

Authored by EPI’s Mishel and labor market economist Heidi Shierholz (with research assistance from Andrew Green), the report details what the authors describe as a “remarkable slowdown” in hourly wages. It explains how stagnant wages, and new developments in the workplace, such as the rise of unpaid furloughs and the elimination by many employers of 401(k) contributions are expected to put increasing pressure on workers already treading water.

Adding to the misery is the trend by employers to require workers to take furloughs – time off without pay. If you take a week off without pay, Mishel points out, it costs you 2 percent of your income, or takes away 2 percent of your ability to pay bills, buy food and support your family. In fact, furloughs have become so common that average weekly work hours are at the lowest level in the 35 years that records have been kept, he says.

“The fallout from this recession is an equal opportunity disaster for millions of Americans throughout the labor market, and for the economy as a whole,” said Shierholz. “Those who are out of work are facing longer spells of unemployment and rising competition for scarce job openings as employers continue to downsize – and those who have managed to hang onto jobs are seeing their paychecks stagnating or shrinking, along with their housing and retirement nest eggs.” (James Parks, AFL-CIO contributed)

Recessionary news, by the numbers

(From the Economic Policy Institute, as of Aug. 21)

• Total jobs lost during the recession: 6.7 million

• New jobs needed per month to keep up with population growth: 127,000

• Jobs lost in July 2009: 247,000

• Jobs needed to regain pre-recession employment levels: 9.1 million

• Manufacturing jobs lost since the start of the recession: 2.0 million (14.2% of sector’s jobs)

• Construction jobs lost in the recession: 1.4 million (18.3%, nearly one in five construction jobs)

• Mass layoffs (50 or more people by a single employer) in June 2009: 2,763; jobs lost: 279,231

• Unemployment rate: 9.4%

• Number unemployed: 14.5 million (up from 7.5 million in December 2007)

• Underemployment rate: 16.3%; Share of workers un- or under-employed: nearly 1 in 6

• Under- and unemployed, marginally attached and involuntary part-time workers: 25.6 million

• Unemployment rate, ages 16 to 24: 17.8%

• Male unemployment: 10.5%; female unemployment: 8.1%

• White unemployment: 8.6%; black unemployment: 14.5%; Hispanic unemployment: 12.3%

• Unemployment rate, young college graduates: 5.9% (2nd worst on record); Worst recorded unemployment rate for young college graduates: 6.2% (1983)


Obama proposes pro-PLA rules, seeks to extend them to other projects

WASHINGTON – President Barack Obama wants to stop the political ping-pong around project labor agreements (PLAs), by inserting a requirement for them for major construction contracts solely done with federal cash into rules that U.S. contracting officers must follow.

And he wants to go even farther, his PLA proposal shows, by extending the PLA requirement to cover projects that are only partially funded by the feds.

In the proposal, published last month, Obama’s agencies said PLAs would apply to projects costing at least $25 million each.  The General Services Administration, the Defense Department and NASA calculated there would be at least 300 such projects every year.

The deadline for comments on the proposed new rules were expected to be extended into mid-September. Predictably, nonunion contractor groups submitted letters against the proposal. Unions and union contractors expressed their support, and several unions pushed for removing the $25 million funding floor, in favor of applying PLAs to all federally funded construction.

Obama issued an executive order in January, just after taking office, re-instituting PLAs for projects fully funded with federal cash.  His order reversed an anti-PLA command in January 2001 by President George W. Bush – whose order in turn dumped a pro-PLA executive order by Democratic President Bill Clinton.

Commenting on Obama’s original executive order, The Association of Union Constructors CEO Steve Lindauer said the directive “restored the ability for agencies to utilize all of their available tools for purchasing flexibility. Project Labor Agreements have proven that they play a vital role both historically and currently on some of the largest projects in the construction industry. The reliance on this type of delivery system within the private sector of the industry has ensured that these projects are built on time and on budget using the highest skilled and safest workforce in the United States.”

He added: "If foreign companies like Toyota choose to use PLA’s to build their facilities even in the South, what does that say about efficiency and cost savings associated with these agreements?

Project labor agreements are contracts between contractors, usually general contractors, and unions that set working conditions for public or private projects.

In return for agreement to pay wages negotiated with the unions, the pacts set up work rules to ensure the projects run smoothly and as well as mechanisms to easily resolve on-the-job disputes.  Nonunion contractors and many conservative lawmakers hate PLAs, claiming they cost too much and reduce competition.

The Obama Administration, prodded by union support that helped get him into office, doesn’t agree.

“The Director of the Office of Management and Budget is working with the Secretary Labor and other officials to provide recommendations to the president on

whether to broaden the application of Project Labor Agreements on both construction projects awarded under federal contracts and construction projects receiving federal financial assistance, to promote the economical, efficient, and timely completion of such projects,” the Federal Register notice says.  “Project labor agreements are a tool agencies may use to promote economy and efficiency in federal procurement.”

The next step is for the comments to be reviewed, and changes made to the rules, if necessary. They did not say how long that process would take. (Press Associates contributed)


Thousands of workers from around Michigan celebrated labor’s day, anyway on Labor Day 2009

By Marty Mulcahy
Managing Editor

While there haven’t been many bright spots in the job market this year, thousands of workers from around Michigan celebrated labor’s day, anyway on Labor Day 2009.

“Now’s the time to support each other,” said Tommy Kruk of Sheet Metal Workers Local 292. “We should be here.” Added 292’s Brad Katchuba: “It’s important for us to be here and show our support for each other.”

Labor Day celebrations were held in Detroit, Grand Rapids, Ishpeming and Muskegon this year, in a state that’s has been hardest hit by unemployment and economic suffering.

“With the (U.S.) unemployment rate at 9.7 percent, it is no secret that Americans are facing monumental challenges during this economic crisis,” said Labor Department Secretary Hilda  Solis. “I know that every job lost, every hour cut from the workweek, means another family having to make difficult decisions.”

Solis said the Economic Recovery Act, along with other Obama administration economic policies had “started getting economic activity back on track,” and had helped soften the blow of unemployment. “We know the tough times are not over. But we also know that without the steps we have already taken, the pain would be far worse,” she said.

That may be, but no state is worse than Michigan’s 15 percent unemployment rate, where the auto industry’s troubles have spread to every sector of the economy.

“Things are difficult and it’s important to come out and show some numbers and support each other in the trades,” said Dejuan Carroll of Boilermakers Local 169. “I support working people, because I am one.”

Solis cited as a sign of optimism the number of layoff victims who had “re-invented and re-educated themselves” in order to get new jobs in different industries. “These workers renew my faith that we will overcome our challenges and that our country will once again rebound stronger than before.”

AFL-CIO President John Sweeney said Labor Day is a time renew the nation’s focus on passage of union-friendly legislation like the Employee Free Choice Act, which would make it easier for workers to join unions.

“Labor Day marks a critical moment for union members and working families – despite the economic crisis, there’s a chance to make real change and improve people’s lives,” he said. “Labor Day marks the beginning of the final push for Congress to consider key major working family issues, including health care and labor law reform. All hands are needed on deck to make sure Congress understands they must seize the moment to make real changes in both arenas.

“Workers have waited too long to win real freedom to form unions and bargain for better lives…. The Employee Free Choice Act will finally restore some much-needed balance to our economy.”

PIPE FITTERS Local 636 members led the Labor Day Parade march along Michigan Avenue in Detroit on Sept. 7.

UA LOCAL 174 members await the start of the Muskegon march.


Big drop for construction fatalities

Workplace fatalities in the construction industry dropped significantly from 2007 to 2008 – 20 percent – but the building industry continues to lead all employment sectors in worker fatalities.

A report released Aug. 20 by the federal Bureau of Labor Statistics shows that construction had 969 fatalities in 2008, the smallest annual total since the Census of Fatal Occupational Injuries program was first conducted in 1992. Much of that drop could be due to the severe drop in construction employment. When the rate is matched (apples to apples) against the number of fatalities per 100,000 full-time workers, construction worker deaths dropped from 10.8 percent in 2007 to 9.6 percent in 2008.

In all industries, there were a total of 5,071 fatal work injuries recorded in the U.S. in 2008, down from a total of 5,657 fatal work injuries reported for 2007 – a 10.3 percent drop. In Michigan, in all industries, worker fatalities increased from 120 in 2007 to 123 in 2008.

The job sector with the second most fatalities was “transportation and warehousing,” with 762 deaths.

“Average hours worked at the national level fell by one percent in 2008, and some industries that have historically accounted for a significant share of worker fatalities, such as construction, experienced larger declines in employment or hours worked,” the report said. The numbers are preliminary, the report said, and could increase, because another factor in the lower numbers may be that some of the state government agencies that provide the data may be slowed by budget constraints.

The biggest decrease occurred in residential building construction, where fatalities dropped 28 percent.

"With every one of these fatalities, the lives of a worker's family members were shattered and forever changed. We can't forget that fact,” said Labor Department Secretary Hilda Solis. “While the decrease in the number of fatal work injuries represents change in the right direction, it does not lessen the need for strong enforcement to ensure that safety is a top priority in every workplace. In fact, today's report prompts us to step up our vigilance, particularly as the economy regains momentum.”

Decade-long safety record shows improvement, too

The national construction fatality rate declined 47 percent and the number of recordable safety incidents dropped 38 percent since the federal government switched to a safety oversight approach known as “collaborative safety” in 1998, according to an analysis of federal safety data released Aug. 27 by the Associated General Contractors of America.

“There is no doubt that the collaborative approach is working,” said Chuck Penn, the executive director of the AGC’s Shreveport chapter. “While even one fatality is too many, it is hard to think of another government program providing so much improvement in so little time.”

The collaborative safety approach represented a significant shift in federal safety oversight when it was first introduced by the Clinton Administration, Penn said. The approach creates incentives for companies to find and fix safety problems before incidents occur while maintaining strong penalties for companies that let safety problems lag until someone is hurt.

Penn noted that in 1998 there were 1.7 fatalities for every billion dollars invested in construction, while today that rate is 0.9 fatalities, a 47 percent drop. Relative to the size of the construction workforce, the fatality rate dropped from 12.9 in 2000 to 9.6 fatalities per 100,000 construction workers in 2008, a 25 percent decline.

He added that while the value and size of the construction market grew significantly, the number of construction fatalities declined from 1,171 in 1998 to 969 in 2008, a 17 percent drop. In addition, the construction safety incidence rate fell 38 percent from 8.8 per 100 workers to just 5.4 per 100 workers while the rate of injured construction workers missed work declined 42 percent from 3.3 per 100 workers to 1.9 between 1998 and 2007.

The Michigan Occupational Safety and Health Administration (MIOSHA) has also utilized a form of the collaborative safety approach in recent years on a few major projects, through its safety partnerships with some large general contractors like Barton Malow, Walbridge and Christman.

Recognizing that engineering techniques alone are not enough to ensure that exposure to hazards are controlled, the program includes coordination, monitoring and educating the project’s workforce. These components are implemented through the same principles of management control applied throughout all phases of the project. The goal: zero injuries on the project.

And in May, MIOSHA announced a new program,  “Protecting workers in tough economic times,” in an effort to create incentives “to encourage companies to develop safety and health management systems that protect their workers.”

The program allows a 10 percent reduction that may be applied to MIOSHA penalties on offending employers, if the safety problems are promptly abated. It also allows for a penalty payment plan – an extended payment plan will allow employers the opportunity to pay the citation penalty in installments rather than one lump sum.

In addition, “focused inspections” will be implemented – MIOSHA inspections in most targeted general industry workplaces will focus on the primary hazards of the industry, instead of the traditional “wall-to-wall” approach.

*”Other-than-serious” violations relating to focused hazards will not be cited if the violation is abated in the presence of the inspector.

On the federal level, President Barack Obama’s new Labor Department Secretary Hilda Solis has been strongly hinting that OSHA might move away from the collaborative safety approach in favor of more active pursuit and punishment of employers that violate safety rules.


Bigger, better, Battle Creek Central H.S. on the way

The addition to Battle Creek Central High School is shaping up, with structural steel dominating the landscape next to the existing school on West Van Buren Street.

A $67 million bond  issue was passed by voters in 2007 to fund the renovations and additions to Central High School and Valley View Elementary.

The 161,800 square-foot addition and renovation of 248,500 square-feet of remodeling work is being managed by Skanska/Schweitzer. The major design challenge, according to project architect TMP Associates,

is that “the exterior of the addition must match the existing neo-classical style, and the interior must incorporate small group learning spaces.” The original high school building was erected in 1908.

The addition will include new space for a physical education and fitness center, administration, food service and student dining/commons. Space will be available for 1,400 students. Students will have the opportunity to use the enhanced and expanded fine arts wing, which includes a black box theatre, dance studio and broadcasting studio.

Currently the men’s and women’s sports teams are spread out all over the city. The school district said one the primary goals at the high school is to “return the sense of ‘campus’ to the school, bringing all sports events to one area and making it easier for athletes, students, and families to attend and participate.”

THE EXISTING Battle Creek Central High School at right was built in 1908, and its addition will be completed a little over a century later.



News Brief

Groundbreaking set for Gun Lake Casino

To the surprise of many, on Sept. 2 the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the Gun Lake Tribe, suddenly announced it would break ground September 17th for the first phase of the Gun Lake Casino, in Wayland Township.

The move came after a lawsuit challenging the U.S. Department of Interior’s taking into trust 147 acres in Wayland Township intended for a native American operating casino was dismissed.

Originally a 193,000 square foot casino was planned. Phase one is to encompass an 83,000 square foot facility that’s estimated to cost $157 million. Serving as construction manager is to be the Portage office of Skanska USA Inc.

“Given the current economic conditions,” said D.K. Sprague, the tribal chairman, “it makes sense for us to build this project in phases. This will allow us to bring jobs to our area sooner, and we look forward to planning and developing the next phase as the economy recovers.”

The casino is to be located at a site at US-131 and 129th Avenue, near Bradley, midway between Grand Rapids and Kalamazoo. It’s to be operated by MPM Enterprises LLC, owned by an affiliate of Station Casinos of Las Vegas, Nevada, and private investors from Michigan.

Construction is expected to take from 10 to 12 months and provide 750 skilled trades jobs.

(From Michigan Construction News.com)

PLA seminar set for Oct. 12 at MSU

The Michigan State University School of Labor and Industrial Relations is sponsoring a conference titled “Building Success: Best Practices in Construction Project Labor Agreements” that may be of interest to union officers.

The conference will be held Monday, Oct. 12 at the Kellogg Hotel and Conference Center, Lincoln Room, on the MSU campus.

Agenda items include speakers who will address “What do you want in a PLA,” PLAs in schools and other public owners,” “PLAs and the open shop,”  Dispute resolution under PLAs, and panel discussions addressing “Where to begin?” and “Perspectives on PLAs,” that includes guest Peter Phillips from the University of Utah.

A registration form and further information can be found on the web at www.lir.msu.edu/jump/conferences.php. Or call 517-355-1801.



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