The Building Tradesman Current Issue | Back Issues Index

April 30, 2004

First take finds new overtime rules are probably more bark than bite for most workers

Plan to help nation's pensions doesn't spell relief for trades

Multi-employer pensions are healthy, but warnings are raised for long-term

PLA helps construct latest generation of jail in St. Clair County

Building trades advance fight to strengthen apprenticeship

There's more to Wal Mart than meets the eye

Trades build partner span to no-name historic bridge

News Briefs


First take finds new overtime rules are probably more bark than bite for most workers

New overtime guidelines for American workers were issued and approved on April 20 by the federal government - and the final rules probably aren't quite as bad as Democrats and organized labor expected them to be.

Intense lobbying by organized labor and about 80,000 public comments on the matter from people concerned about losing their overtime caught the Bush Administration's attention during this election year.

Sen. Tom Harkin (D-Iowa), who has been closely involved as the rulemaking process has evolved, said: "We have a regulation that has gone from profoundly terrible to just plain terrible."

The Bush Administration has been the primary mover in making changes to federal overtime rules, many of which date to the 1930s. Bush has claimed that he wants to clarify rules in order to limit litigation. Democrats claim he wants to save employers money at the expense of workers.

The rules the Bush Administration initially proposed were much worse than the final product.

"The new rules were so watered down compared to last year's Bush Administration draft proposal that there might not be enough outrage left to sustain the drive" to overturn the new policies, the Wall Street Journal reported.

AFL-CIO President John Sweeney said "The Bush Administration staunchly opposed legislation which would preserve overtime pay for all workers and instead pressed forward with eliminating overtime pay for a huge swath of middle-class workers."

The swath of middle class workers who could lose overtime is less now than it would have been under the first proposal by Bush. Under the new overtime rules, which can go into effect in August, workers who make less than $23,660 per year are automatically eligible for overtime pay. Previously, that income level was set at $8,060. That's the good news.

But the administration's new rules also will make it easier to deny overtime to certain workers who earn more than $100,000 per year. Originally, the Bush Administration wanted to set that threshold at $65,000 per year, but backed off after the public comments.

Some classifications of workers who earn more than $23,660 per year can now be re-classified at an employer's discretion as working in a "supervisory" or "administrative" role, and thus be forced to take compensatory time off (at a time of the employer's choice) in lieu of overtime pay.

What workers will be affected? Mostly white collar workers. Language in the initial rules originally seemed to target workers like police officers, firefighters, paramedics as well as nurses. Now the Department of Labor said the new rules specifically ensure that first responders to emergencies are eligible for overtime.

Beyond that, the new rules create a mish-mash of worker classifications that lay out who is eligible and non-eligible for overtime. Insurance claims adjusters and funeral home directors, for example, are not eligible for overtime.

Most blue-collar workers and those in the construction industry are apparently not affected by the new rules. But the rules introduce a fuzzy area that could be open to interpretation. Workers who are "supervisors," "administrators" and "professionals" are not eligible for overtime. Initially there was concern in construction that a foreman or a journeyman who supervises an apprentice could be stripped of overtime protections - but those concerns seem to have passed under the new language.

Unionized workers are not affected by the new Labor Department language, but time will tell if this will open employer proposals for comp time instead of overtime during the bargaining process.

In the general industry, who gets exemptions from overtime remains a matter for concern for a lot of workers. "One of the big wild cards in the new rules changes the terms of some of the exemptions, so that a lot of workers could still fall into them," and lose access to overtime, the Wall Street Journal said of the "mammoth new rules."

Last year, Republicans in the Senate and House backed an amendment by Sen. Harkin to block the part of Bush's plan that takes away overtime pay from workers but would allow any expansion of overtime eligibility to workers not currently qualified. Republican congressional leaders, working closely with the Bush White House, stripped the Harkin amendment from the final version of appropriations bill to which it was attached.

Harkin and Democratic senators have fought to win a new vote on a similar amendment this year, but Senate Republican leaders also blocked those attempts, even pulling bills off the floor and delaying votes to prevent a vote on the Harkin amendment.

The Journal said earlier this month, "The Bush Administration is taking a substantial political risk in attempting to re-engineer the complex overtime rules…. The paper added, "A legislative defeat on the issue - or even a protracted battle - could do election-year damage to President Bush."


Plan to help nation's pensions doesn't spell relief for trades

Congress provided relief to thousands of cash-strapped U.S. pension programs earlier this month, by approving accounting changes that will allow many retirement plans to change the way liabilities are computed.

But building trades plans - and the multi-employer pension plan system they work under - were specifically excluded from the relief provided by Congress and President Bush. The president had narrowly defined how much relief pension plans would be provided, and multi-employer plans were almost completely excluded from relief.

Why? Multi-employer plans are no better or worse off financially than single-employer plans. Many Democrats in Congress think it was simply anti-union bias by the Bush Administration.

"President Bush should be embarrassed to sign this unfair and spiteful bill," said Sen. Edward Kennedy, the democratic leader on the Senate Health, Education, Labor and Pensions Committee. "When President Bush signs this bill, he should dress up as Marie Antoinette and say to the ten million small business employees left out of this legislation, 'Let them eat cake.' "

Sen. Mary Landrieu (D., La.), said unionized construction workers who are affected by this legislation are the people the White House "doesn't like, doesn't want to help, or doesn't (believe) needs help."

Multi-employer pension plans provide a defined benefit to workers and involve agreements maintained by two or more employers in a particular industry. The Department of Labor said about 40 percent of all multi-employer plans are in the construction industry.

Rep. Bob Andrews (D-N.J.) sponsored a bill that would have included multi-employer plans, but it lost. Andrews told the Construction Labor Report that multi-employer plans were excluded from relief not because of monetary concerns, but to disadvantage union workers.

Actually a number of Democrats in Congress did vote for the bill, because it helped a number of pension plans, although it could have helped more. Michigan Sen. Carl Levin was among the supporters.

"For the companies whose plans this bill helps, it will free up resources for equipment upgrades, new hires, R&D, and other investments in the future," Levin said. "I am troubled by the fact that the component of this bill dealing with most multi-employer pension plans that had overwhelming support in the Senate has been dropped out of this conference report.

"I am hopeful that we can provide relief to those multi-employer plans soon. That is why I will co-sponsor Sen. Kennedy's bill that would do just that. If I thought that defeating this bill would help the many pension recipients whose plans were left out of this conference report, that would be one thing. However, after careful thought, I have concluded that defeating this bill would not achieve that goal but would only hurt those who do get the much-needed relief in the bill."


Multi-employer pensions are healthy, but warnings are raised for long-term

One of the best benefits afforded to the nation's unionized construction workers is their defined benefit pension that awaits them in their retirement.

Given the decision by President Bush and Congress to exclude defined benefit pensions from the relief plan that passed earlier this month, what is the overall outlook for construction industry retirement plans?

According to the Construction Labor Report, the reviews on the overall health and outlook of defined benefit plans is mixed.

On the one hand, a March 25 report titled 2003 Survey of the Funded Position of Multi-employer Plans released March 25 by the Segal Co. delivered good news: the average funded ratio for the plans is 87 percent. "This average funded ratio is particularly impressive in the wake of 'the perfect storm' which included three straight years of disappointing equity market returns coupled with the downside effect of computing liabilities at record low interest rates," the report said.

On the flip side, there is a long-term potential for difficulties. The Construction Labor Report quoted Terrence Deneen, assistant general counsel for the Pension Benefit Guaranty Corp. (PBGC), as saying "there may not be enough time for multi-employer pension plans to work themselves out of their problems."

He said the major problems are time and demographics. The numbers of retirees are increasing, limiting the ability of pension plans to grow. People are living longer, and drug and medical costs are going through the roof. The overall trend in the nation is towards defined contribution plans, rather than defined benefit. In addition, stagnant or negative union penetration in the construction industry is not helping because new contributors are not being brought into the pension programs.

In addition, a March report by the non-partisan Government Accounting Office found several warning signs.

The GAO said stock market declines, coupled with low interest rates and poor economic conditions, appear to have reduced assets and increased liabilities for many plans. It said the PBGC reported an accumulated net deficit of $261 million for its multi-employer program in 2003, the first net deficit since 1981.

"Following two decades of relative financial stability, multi-employer plans as a group appear to have suffered recent and significant funding losses, while long-term declines in participation and new plan formation continue unabated," the GAO report said.
George Buhalis is president of Michigan-based Benesys, Inc., which administers 16 defined benefit plans in the Midwest. He said it is accurate to characterize multi-employer pension plans as being basically healthy now, with long-term financial concerns.

"It's terrible what Congress did, they completely ignored the needs of multi-employer plans," Buhalis said. "The three- or four-year decline in the stock market was historic and it was devastating. Multi-employer plans could have used the help. Their action (in Congress) was just anti-union. I don't see how else you could characterize it."


PLA helps construct latest generation of jail in St. Clair County

By Marty Mulcahy
Managing Editor

PORT HURON TWP. - In just about any Western movie - or in fictional Mayberry, North Carolina - the jail cells are usually made up of brick walls with iron bars on the front, and the sheriff's desk isn't far away so he can see what the bad guys are up to.

Prison construction had moved away from that concept, with some designs having jail cells constructed in long rows that make it difficult for keepers to see what inmates are doing.

Planners of the new St. Clair County Detention and Intervention Center like the idea of having a direct line of sight on prisoners, and that's one of the central design themes behind the $32 million facility that's currently under construction. General contractor Project Control Systems, Inc. (PCSI) and the building trades have completed about 20 percent of the facility.

"We've had a wet spring, but the site is finally starting to dry out," said PCSI's George Wagner, Jr., who is co-superintendent on the project along with Mark Reaume. "The weather has slowed us down a bit, but everything else has been great - it's been a safe job, and the workers and the project labor agreement with the trades have worked really well for us."

The new Detention and Intervention Center sits on eight acres of a 23-acre site a few miles off of I-94. The 200,000 square-foot building will provide 384 adult beds and 70 juvenile beds, and will replace the existing St. Clair County Jail in Port Huron and the Juvenile Detention Center in Fort Gratiot. The new facility will also house the St. Clair County Sheriff's Department and a mental and physical health assessment center.

The existing jail, which has 134 beds, was built in the 1950s and is completely outmoded. Heat for the facility is generated and transferred from a court building across the street, and conduit feeding the jail is so packed that even a phone wire can't be fed through. And with a shortage of beds, St. Clair County inmates have been transferred for incarceration to other facilities around the state.

St. Clair County Sheriff's Major Tom Torrey, who oversees the jail, told the Port Huron Times-Herald that the new facility will utilize a "direct jail supervision" of putting jailers in pods to watch prisoners, which will replace the current "linear system" of jail cells in a row.

Before groundbreaking on the new Detention and Intervention Center last summer, the St. Clair County Commission had studied the issue for about five years. Building trades union representatives were extremely active in the planning and public hearings phase, and their influence - as well as input from local workers - helped arrange the implementation of a union-only project labor agreement on the job.

Steve Ellery of Painters Local 1474 sat on the county commission when the PLA was approved 7-0. He subsequently lost a re-election campaign, but is running again for St. Clair County Commissioner later this year. "It's very important that this project goes smoothly, so that project labor agreements can be used on future county construction," he said. "We want a great building to show the county that PLAs work."

There are about 60 construction workers on the project, a number which should peak out at 200 in the coming months. Under construction on some old baseball fields, the building is expected to open in about a year.

PCSI's Reaume said pre-cast concrete is being used extensively on this project, with trucks bringing in the material from where it's manufactured in Kalamazoo. But the aforementioned jail pods are being manufactured in Georgia, and then shipped via railroad and then flatbed truck to the jobsite.

"I believe they come completely finished, with furniture and everything, and when they get here, we just drop them in place," Reaume said. "It's like stacking blocks. Then the local tradespeople hook up the mechanical. They're building jails like this all over the country."

CONDUIT THAT WILL SERVE the eletrical needs of the St. Clair County Detention and Intervention Center are installed by Ron Mason, left, and Tom Kaminski of Electrical Workers Local 58 and Power Systems Electric.

PLUMBING A SHOWER ROOM for officers at the St. Clair County Detention and Intervention Center is Eric Bloch of Plumbers 98 and Watson Bros.


Building trades advance fight to strengthen apprenticeship

The AFL-CIO Building and Construction Trades Department has filed a formal petition for rulemaking requesting U.S. Labor Secretary Elaine Chao to establish specific graduation requirements by craft for construction apprenticeship programs.

"We must take this action because it is an increasing problem that continues to be ignored by the Department of Labor," said Building Trades Department President edward Sullivan. "Any misuse of the apprenticeship system undermines the industry's future, and potentially defrauds construction workers."

The action is the result of the DOL's failure to respond to repeated calls for action on the lack of standards and monitoring of apprenticeship programs. An October 2003 study by the Building Trades Department on the apprenticeship graduation records of the Associated Builders and Contractors found that ABC programs overall produced twice as many cancellations as graduations - and some individual areas were much worse.

In contrast, building trades union programs graduated 75 percent of enrollees from 1997 to 2001.

The building trades action comes one month after U.S. Sens. Edward Kennedy and Patricia Murray asked the General Accounting Office to investigate the performance of the nation's apprenticeship programs, including graduation rates, duration of training and wage levels for apprentices.

"Unions invest millions of dollars millions of dollars to provide quality training for workers," Sullivan said. "We believe that many apprenticeship programs in the open shop are failing to keep the promises they made to workers, and the Labor Department must take immediate corrective action."


There's more to Wal Mart than meets the eye

By Terry Kramer
UFCW Local 1546 Chicago

There is no good reason to spend even one hard-earned dollar at Wal-Mart and Sam's Club. Most union members know that this company does not deserve your business and your shopping trip won't benefit the workers or the community.

Picture yourself in need of some items for a family gathering. You're out running errands anyway, so you think, "What's the harm?" and you stop at Wal-Mart. There's one in nearly every town, even if residents spent months or years trying to keep it out of their community. It's not hard to find a Sam's Club, either, which is another non-union Wal-Mart-owned chain.

You pass the shuttered downtown area, where once thriving businesses that served local customers for generations now sit silent and empty. They were driven out by Wal-Mart's deep discount pricing due to its powerful control over suppliers who must cut prices to the bone... or else! You recall the huge tax breaks Wal-Mart demanded and received from your elected officials. Your schools have fewer tax dollars, but Wal-Mart is doing fine. Why, you wonder, did the world's richest company receive a tax break?

As predicted, traffic and crime have risen since the Wal-Mart opened, requiring more time and effort by your local police. As you avoid potholes, you wonder why Wal-Mart won't pay its share for road repairs and increased patrols. Some neighbors and friends have lost jobs since Wal-Mart came in, and you think back on a UFCW member explaining how research shows that for every two jobs created by a Wal-Mart, the community loses three others.

The jobs lost to Wal-Mart are often union jobs with benefits, security, a pension and more. To make matters worse, Wal-Mart in recent years, has hired non-union contractors right to renovate and construct several of its stores. Another insult to America's working families. It's starting to hit home now.

Inside you go to the clothing aisles to see where the items were made. Unlike their "Buy American" -themed TV ads, you find coats, gloves, shoes, shirts and more made in China, Bangladesh and other foreign lands. You've seen the 60 Minutes and 20/20
reports exposing Wal-Mart as one of the largest importers of goods, often from nations associated with sweatshops, child or forced labor.

You find many more foreign labels in the toy, auto and housewares sections. Finally, you go to get the items you came to buy. You come to the checkout with your paper plates, film, batteries and candles, with more in your cart.

You stopped at the meat case for pre-packaged meats (since the meat cutters in Texas voted to organize, Wal-Mart did away with in-store meat cutting and wrapping). You've picked up detergent, light bulbs, oil, toothpaste and pop - all of which could have been bought instead at a union store. The cashier is a woman, as are 80 percent of Wal-Mart employees. She earns an average of $3 less per hour than UFCW members at union supermarkets, even though Wal-Mart is the most profitable retailer.

Your open wallet reveals a union prescription card, which you close when you realize that over 60 percent of Wal-Mart workers can't afford the company's expensive yet meager health plan, despite Wal-Mart's ability (but refusal) to offer decent insurance that working families badly need. Wal-Mart has a 50 percent annual turnover rate.

The $17.58 you spent here won't be around long either, because each day Wal-Mart sends all deposits from all stores to its Bentonville, Arkansas headquarters. None remains in the local economy.

You leave the store, assuring yourself that it was only a few items. Who got hurt? That's what you ask yourself as you pull away from the Wal-Mart lot. The answer suddenly comes to you as you meet your own eyes in the rear view mirror.

As a trade unionist and a working person, if you think Wal-Mart is not your problem, please think again. Wal-Mart (and Sam's Club) do not deserve the business of union members until every worker in these stores is covered by a union contract of their own.

Help Wal-Mart workers rise up to UFCW standards by encouraging them to organize as union members. But, in the meantime, please don't reward Wal-Mart (and Sam's Club) with one dime of your business.


Trades build partner span to no-name historic bridge

A relatively small but important portion of the state's billion-dollars-plus in highway expenditures this year will fund the replacement of an historic bridge near Hale in Iosco County.

The building trades are supplementing an old steel truss bridge built in 1931 along M-65 that spans the Au Sable River with a new pre-stressed concrete span that's being constructed about 200 feet to the east.

Because of the old bridge's historic significance, it will remain in place, for "recreational traffic," according to the state Department of Transportation. Neither the old nor new bridges have names.

Earlier this month, four of the five piers for the new bridge had been sunk before installation of the road surface, said state DOT engineer Tom Hilburg. He said the project is scheduled for completed for completion in June 2005, "but at the pace their working, they'll be done this year."

M-65 will be realigned to meet the new 760-foot-long bridge, which will have much less character than the old span, but should result in lower maintenance costs. The new span will be 46-feet wide - double the width of the older steel structure. The general contractor on the project is Cordes Excavating, and Posen is the subcontractor building the $7.2 million bridge.

"Once completed, the new and improved realignment of M-65 will offer motorists a very comfortable and safe ride over the river," said North Region Engineer Brian Ness. "This project also brings us closer to reaching our statewide goal of having 90 percent of roads and bridges in good condition by 2007."

A PRE-STRESSED concrete bridge is being constructed over the Au Sable River near Hale to replace the 73-year-old steel truss bridge, shown at left.
MDOT Photo/Jim LeMay


News Briefs

Congress to argue highway spending
A showdown has been set between the Congress and President Bush over how much the nation should spend on transportation construction over the next several years.

And the outcome will have a tremendous effect on how much Michigan and every other state will be able to spend on road and bridge repairs, as well as new construction.

Earlier this month, the U.S. House overwhelmingly approved the spending of $275 billion over six years. Previously, the Senate voted to spend $318 billion over the same time period. President Bush, conscious of the nation's ballooning deficit, has maintained that the nation should spend no more than $256 billion through 2009.

Also still unresolved is equity funding among the states - Michigan is one of several "donor" states that receives less in transportation dollars from Washington than it sends in tax dollars. The tremendous breach in the funding amount will be resolved in conferences between the House and Senate.

The stakes are high for Michigan in how the transportation funding issue is resolved. "The estimated difference in funding for Michigan between the Senate bill and the House bill is at least $1.2 billion," said Michigan Road Builders Association spokesman Gary Naeyert.

Stabenow proposal tries to save jobs
The U.S. Senate unanimously approved a proposal by Sens. Debbie Stabenow (D-Mich.) and Jim Bunning (R-Ky.) that would significantly increase tax incentives to help U.S. manufacturers compete in the world market and help prevent more losses of U.S. manufacturing jobs.

The amendment to tax reform legislation would provide a $6.5 million boost to manufacturing companies.

"The people of Michigan recognize that our nation is in a manufacturing jobs crisis, and that Michigan - which lost more jobs than any other state in 2003 - is among the worst-hit states," Stabenow said. "My amendment is a positive step forward in our fight to create jobs here at home."

The key benefit to the amendment is that it provides immediate tax relief for manufacturers who create jobs in the U.S., amending a bill that would have slowly phased in tax benefits over five years.

The proposal by Stabenow and Bunning allows a company to take a pre-tax deduction equal to a percentage of its domestic manufacturing income, effectively serving as both a tax cut and an incentive to expand domestic manufacturing.

Leavey endorsed for pension trustee
Kathleen Leavey has been endorsed for Detroit Pension Board Trustee by the Greater Detroit Building Trades Council. Building trades employees of the City of Detroit are urged to vote for Leavey during the balloting, which takes place April 25 through May 5.

Leavey, an attorney in the city's law department, is backed by a host of union endorsements, and is considered by the building trades council as an excellent choice for Pension Board Trustee.


The Building Tradesman Current Issue | Back Issues Index