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February 12, 2006

'Deadbeat boss' legislation takes roost in Michigan

Timely prevailing wage survey means more union job opportunities

Have a seat - community re-welcomes Johnson Controls

Construction contracts up, but inflation isn't far behind

'Friends Of Labor'cuts across job titles to boost local candidates

Weill Hall provides home to policy center

News Briefs


'Deadbeat boss' legislation takes roost in Michigan

By Marty Mulcahy
Managing Editor

LANSING - The U.S. Congress has utterly unable or unwilling to provide Americans relief on health care costs. The cost of health care have been increasingly pushed to the states, where Medicaid costs have gone through the roof, and to individuals, who are paying higher percentages of their pay for prescriptions and co-pays.

Now the states are fighting back. In Maryland last month, the Democrat-controlled legislature overturned the Republican governor's veto, and adopted a law requiring companies employing more than 10,000 workers to spend at least 8 percent of their payroll on health care for employees - or pay any shortfall into a special state fund.

Here in Michigan, Sen. Ray Basham, a Democrat from the Downriver Detroit area, is pushing Senate Bill 734 (the so-called "Deadbeat Boss" bill) which would require corporations in Michigan with more than 10,000 workers to either provide affordable insurance to their employees or reimburse the state for nearly $100 million in annual Medicaid related expenses.

Wal-Mart is unnamed in the legislation, but the corporate giant has about 11,000 employees in Michigan. Basham requested a public hearing last month to coincide with public hearings taking place in the Washington state legislature on similar legislation.

"Throughout the country we are seeing states beginning to crack down on deadbeat companies who have been fleecing the taxpayers out of hundreds of millions of dollars in avoidable Medicaid costs," said Basham. "But here in the Michigan Senate, it's still business as usual."

Senate Bill 734, authored by Basham, requires large corporations to invest at least 8% of its payroll into health care coverage for its employees. Employers who refuse will be required to reimburse the state for the difference. The revenues would be put into a newly created "Fair Share Health Care Fund" to be used to reimburse taxpayers for Medicaid-related expenses.

"My legislation only seeks to protect Michigan taxpayers from a handful of highly profitable companies who want to shift their health-care-related costs onto an already struggling Medicaid system," said Basham. "The taxpayers of Michigan deserve a fair hearing for this matter."

Basham, using statistics provided by the Michigan Department of Human Services, said just one large unnamed Michigan employer, with 5,402 workers and 5,851 dependents currently enrolled on Medicaid, costs state taxpayers approximately $46 million annually. Overall, he said "deadbeat" companies that do not provide employees with health care are projected to cost Michigan taxpayers approximately $100 million annually.

Conservatives started foaming at the mouth at the anti-corporation trend started by the Maryland legislature. The Wall Street Journal decried that "What's really going on here is an attempt to pass the runaway burdens of the welfare state on to private American employers. As we're learning from Old Europe and General Motors, this is bad news for both business and workers in the long run."

The conservative Detroit News editorial page said the Democratic proposal "is clearly not a pro-growth strategy, but one that would drain profits from job-creating businesses to fund ill-conceived social crusades - like the Wal-Mart bill." The editorial continued, "Basham isn't doing Wal-Mart workers any good. But he is sending yet one more message that Michigan is hostile ground for job creators."

On the other side of the political spectrum is Metro Times columnist Jack Lessenberry, who wrote that "Wal-Mart mainly treats its 'associates' abysmally, pays them starvation wages and fails to provide the majority of its workers with any health insurance at all. What happens when they get really sick? Their only recourse is to fall back on the resources of the strained state Medicaid system."

He also addressed those who claim America will lose jobs because of this kind of legislation: "it became law (in Maryland) - and corporate America whined a little bit, then paid up. Maryland's still there, thank you."

Wal-Mart announced plans to open 600 stores in the U.S. in 2006 - and supporters of the bill say they doubt that Wal-Mart's growth will be hampered if the legislation catches on in other states.

Basham's bill doesn't have a chance of passage in Michigan - where the two legislative branches are Republican-controlled. But, said the New York Times, "many state legislatures have looked to Maryland as a test case, as they face fast-rising Medicaid costs, and Wal-Mart's critics say that too many of its employees have been forced to turn to Medicaid." The Times article added: "The bill's passage underscored the success of the union campaign to turn Wal-Mart into a symbol of what is wrong in the American health care system."


Timely prevailing wage survey means more union job opportunities

by David Plawecki, Deputy Director
Michigan Department of Labor & Economic Growth

(This is the third and final story in a series about the fair enforcement of Michigan's Prevailing Wage Act of 1965).

Since taking office in 2003, one of Gov. Jennifer Granholm's objectives has been to improve the health, safety and welfare of Michigan workers.

To this end, the Michigan Department of Labor & Economic Growth has sought to strengthen enforcement of the state's Prevailing Wage Act and to protect our skilled construction trades workers and responsible contractors.

Under the previous administration, Michigan's Prevailing Wage law seemed to discourage complaints and encourage potential abuses. Today, the Prevailing Wage law is being reinvigorated, and Michigan's Wage & Hour Division is working with contractors and workers to ensure fair and equitable enforcement of the act.

How much a construction worker is required, as a minimum, to be paid in wages and fringe benefits on a state-backed construction project is determined by the prevailing wage rate schedule developed by the state of Michigan's Wage & Hour Division.

The data that goes into developing the rate schedule comes from collective bargaining agreements and additional understandings that supplement the contract language. These agreements and understandings are collected from construction union locals throughout the state.

Under the previous administration, the collection of wage data was often a slow, drawn-out process that took a long time to update.

In the past, the division used an annual statewide survey of union locals to collect the wage data it needed to calculate prevailing wage rates. The process involved mailing the survey and waiting a couple of months for all the returns.

The rates are published for each of Michigan's 83 counties and list the wage rates for trades classifications in each county. Unfortunately, there were always missing surveys or incomplete information, requiring a second or third survey mailing. Once the wage data was finally collected, it took weeks for staff to compile the vast amount of information into the 83-county format and prepare the different uses for release of the new prevailing wage rate schedules.

As a result, a wage increase change that just missed the previous prevailing wage survey might not appear for a year and half or more. This placed union contractors, paying the higher wage, at a distinct disadvantage in bidding for, and landing construction projects. Nonunion contractors could bid less using the existing prevailing wage rates, which were often older and lower than the current union rates. And this simply was not fair.

We recognized the inequity and quickly moved to correct it.

Now rates are continually updated.

Today, instead of waiting sometimes a year or longer, Wage & Hour staff updates prevailing wage rates every 90 days or one calendar quarter. Union locals can submit the latest prevailing wage information to the division as changes occur, instead of waiting for the annual survey. Union representatives simply visit the division's website ( to download the survey form. They complete the survey and send it to the division along with their current collective bargaining agreement.

The new information is then entered into the prevailing wage database. The new process helps level the playing field for the way in which everyone bids on construction projects. The projects must begin or be awarded within 90 days from the date the rate schedule is issued. The rate schedule then remains in effect for the length of the project.

Types of rate schedules.

The prevailing wage rate schedule includes three sets of data - straight time, time-and-a-half and double time - for every trade and apprenticeship classification. The wage rate and fringe benefit amount are prepared as a combined total.

There are several types of schedules - commercial rates (for building construction), road builders, marine and rail. The rates for the road builders and marine contractors cover the entire state, while commercial rates vary from county to county. These three rate schedules can be viewed online at the division's website at no cost.

The online rates are for information purposes only, but they provide the public and contracting agents with a good idea about the local area's prevailing wage rates.

The official rate schedule, which must be used, is not online and has to be requested directly from the Wage & Hour Division. The division supplies the latest official prevailing wage information, whenever it receives a schedule request from a contracting agent.

Wage surveys affect projects and workers.

Gathering the data used in developing prevailing wage rates is an important function of the Wage & Hour Division and one that affects hundreds of state-supported construction projects and thousands of skilled construction trades workers throughout Michigan. In fiscal year 2004 alone, the division received 1,400 requests for prevailing wage rate schedules from contracting agents.

Cutting the time it takes for a prevailing wage change from up to six calendar quarters to one calendar quarter means a level playing field for union contractors and higher wages and more job opportunities for you.


Have a seat - community re-welcomes Johnson Controls

By Marty Mulcahy
Managing Editor

BATTLE CREEK - The building trades are re-tooling the Johnson Controls Metals and Mechanisms facility in the Fort Custer Industrial Park, getting it ready for full production as an automotive seating component manufacturer.

Not long ago the future was bleak for the future of the plant. In 2004, Johnson Controls was looking to move its operations to Ohio or Mexico. According to Battle Creek Unlimited, the city's business development arm, 81 employees lost their jobs with the elimination of a second shift and the remaining 100 or so employees lost their jobs when Johnson Controls ceased production of door panels in December 2004.

But now, thanks to some hefty state tax breaks ($17.4 million) and local tax incentives, Johnson Controls is investing $118 million to retool its operations in Battle Creek and Holland, keeping 747 direct jobs in Michigan, plus more spin-off jobs.

"The state and local economic policies had a lot to do with our ability to reopen the plant," said Scott Russell, Johnson Controls engineering manager. "We started work in April, and currently one-third of the plant is active making seating components. Overall it's a two-year project, but the construction phase should be complete by the end of next summer."

Ideal Construction is overseeing the project, which is employing scores of building trades workers, although employment has been in phases. "It's been an excellent place to work," said Motor Shop Electric foreman Ken Scott of IBEW Local 445. "We hope to continue working with Johnson Controls well into the future."

Michigan Economic Development Corp. President and CEO Don Jakeway said Johnson Controls' decision to stay "is great news for Battle Creek and Holland. Without this incentive package, these jobs would have left the state, never to return. I commend the leaders of these communities for partnering with the MEDC to present a savvy business case which ultimately won the projects."

The operations in the Battle Creek Johnson Controls plant will take place in 200,000 square-feet of space.

"Our construction workforce in here has been great, absolutely fantastic," Russell said. "You can see their work is high quality and they've been very professional."

IBEW LOCAL 445 electricians Chris Doubleday and Dave Morales (Motor Shop Electric), go up to wire machinery at the Johnson Controls Metals and Mechanisms facility in Battle Creek.

PERFORMING DEMO work with a Bobcat-mounted jack inside what will be the stamping area of the Johnson Controls facility is Gordon Powell of Operating Engineers Local 324.



Construction contracts up, but inflation isn't far behind

First-year settlements in construction labor agreements negotiated in 2005 averaged $1.53 or 3.9 percent, according to the Construction Labor Research Council.

The average first-year increases were just above the 3.8 percent increases in 2004, but well above the average monetary increase that year of $1.36. That's because more negotiated contracts were settled with higher wage and benefit levels.

"New agreements most commonly resulted in increases between three and five percent," the CLRC said. "For the second and third years, three-quarters of all settlements were within this range."

Other findings in the report:

  • Health and welfare contributions accounted for 78 cents of the new wage allocations.
  • Wage and benefit increases among the various crafts were within a half percentage of the entire industry average.
  • U.S. construction employment is expected to be a record 7.25 million in 2006. Conversely, construction unemployment is expected to be below eight percent, the lowest since 2001. The Consumer Price Index (the inflation rate) will increase about 3.5 percent in 2006, which will be higher than the previous four years. Construction wages will continue to (barely) outpace the inflation rate.
  • Construction labor agreements of three years were most common, a pattern which hasn't changed much over the years.


'Friends Of Labor'cuts across job titles to boost local candidates

By Guy Snyder

Political involvement on the local government level by union members and organized labor supporters often proves difficult to achieve.

Though labor's voice should be heard on school boards, village and city councils, and county commissioners, factors such as the heavy time commitment involved, expense and work necessary to run even a modest election campaign, and often low or non-existent compensation for local office holders discourages many.

Even if they have the interest, working people - such as the skilled construction trades - can find these obstacles insurmountable.

Over the past ten years in Grand Rapids an alliance of political action committees from a number of unions has been working on that problem. The informally organized group, which calls itself the "Friends of Labor" (FOL), has united a number of construction union locals with unions representing school teachers, fire fighters, and police.

Over the years numerous candidates have approached the group, requesting its endorsement. FOL endorsed candidates who have won public office as a result, include the current mayor of Grand Rapids and nearly all of its city commissioners.

Buck Geno of the West Michigan Plumbers, Fitters & Services Trades Local 174, says FOL members are not assessed any dues nor can they offer candidates any financial contributions. Instead it serves as a forum where candidates can address union representatives at one time, with each union then independently deciding which candidate should receive financial or volunteer support.

"Friends of Labor began by running a series of seminars on how to run political campaigns," Geno says. "And while we haven't run the seminars lately, with the new campaign cycle getting underway we'll probably get back to doing them. What we have done is connect labor friendly candidates to things they need, which often is not just money for their campaign, but volunteers to help with distributing flyers, put up signs, and that kind of thing."

In addition to Geno's local, FOL members include the Communication Workers of America Local 4034; Grand Rapids Fire Fighters Local 366; the Grand Rapids Public Officers Labor Council; Local 406 of the General Teamsters Union; Michigan Education Association; Grand Rapids Education Association; Kent-Ionia Labor Council; West Michigan Building Trades Council - Ironworkers Local 340; Midwestern Council of Industrial Workers; International Brotherhood of Electrical Workers Local 275; Carpenters Local 100; Grand Rapids Employees Independent Union; Sheet Metal Workers Local 7; United Food & Commercial Workers Local 951; Kalamazoo County Education Association; Amalgamated Transit Union Local 836; Retail, Wholesale & Department Store Union; and the United Auto Workers Region 1-D.

"There's only one purpose for the FOL's existence," says Bruce Hawley of Ironworkers Local 340. "And that's political. It also gives us an opportunity to sit down at the union table with the UAW, SIEU, the teachers, and the cops. Among the skilled trades, because we have no dues, it also gives a way where the Change To Win Federation can continue working with Building & Construction Trade Department members of the AFL-CIO."

As to be expected, various political action committees formed by construction unions and employer associations across Michigan are active in the political arena, though usually independently. Michael Crawford of the Michigan Chapter of the National Electrical Contractors Association, says the Mid-Michigan Construction Alliance, of which he's a member, has endorsed candidates for school boards as well as county and state government.

During the November 2004 election Crawford himself served as campaign manager for Linda Cornish, co-owner of Ro-Lyn Electrical Inc. of Lansing, in her successful run for a seat on Lansing's Board of Education.

"My association and other construction groups are also quite active in helping school districts with bond issue campaigns," Crawford adds. "There's a lot of work involved in getting the word out to voters about the need for renovating and expanding the school buildings and equipment kids need."

What makes FOL unique is its broad representation of labor unions, which gives it a number of advantages. One is logistical, Geno notes. "That wide network is where we're able to get the manpower together to go out and get the campaigning work done." But there's a philosophical component as well. Local candidates gaining an FOL endorsement means they've passed muster not only as far as the construction industry is concerned, but with a wide swath of organized labor from many diverse professions.

There are of course some divisive social issues, such as a local candidate's stand on the death penalty or abortion, that can generate controversy within the FOL. To alleviate that, Geno says, the group has a standing agreement to rate candidates primarily based on where they stand on issues directly impacting labor, such as the payment of prevailing wages, health care, and pension benefits.

"It really has a positive, grassroot effect on union members," notes Hawley. "Often they feel separated from candidates, very detached, but getting involved with what we're doing as volunteers gets them to realize just how significant they are. We live in a democracy and all votes count. It can even be inspirational, make them feel they're part of the system. It can even get individual members so sparked that they may end up running for offices themselves."


Weill Hall provides home to policy center

ANN ARBOR - The wheels of construction are turning on Weill Hall, a new 80,000-square-foot building that will house the Gerald R. Ford School of Public Policy.

According to the University of Michigan, the five-story, $35 million building will house administration, classrooms, faculty offices, development, career services, student services, alumni and external relations and research functions.

Research programs include: the Ford Foundation Research and Training Program on Poverty and Public Policy; the Michigan Program on Poverty and Social Welfare Policy; the Center on Local, Sate and Urban Policy; and the Nonprofit and Public Management Center research centers.

The building, at the northeast corner of State and Hill streets, "will serve as a symbolic gateway to Central Campus," the university said.

Ford School Dean Rebecca Blank said at the groundbreaking, "With this building, you have given us our first true home. For nine decades, space has been our final frontier as we moved through the University in search of a place to call our own."

The building process is being managed by Clark Construction. Ground was broken in November 2004 and work is expected to be complete later this year.

Citgroup Inc. Chair Sanford Weill gave $5 million toward the new facility, which will feature classrooms, faculty offices, a library, research centers and conference space. A 1935 graduate, Ford served 25 years in the U.S. House of Representatives, became vice president in 1973 and was president from 1974-77. The Ann Arbor campus is home to his presidential library.

INSTALLING A SUPPLY duct run at the new Weill Hall is Ron Crafton of Sheet Metal Workers Local 80 and Applegate.

THE FIVE-STORY, $35 million Weill Hall under construction.


News Briefs

U.S. construction ends 2005 up 10%
The final numbers for 2005 are in, revealing that total U.S. construction advanced 10 percent from 2004 to $651.4 billion, according to McGraw-Hill Construction. That was a slight dip from the 11 percent increase reported for 2004, but well above the nation's growth rate, ranging from 2-5 percent from 2001 to 2003.

In its report dated Jan. 30, McGraw-Hill said the pattern for total construction over the course of
2005 showed a sluggish first quarter, followed by strengthening activity in the second and third quarters, and then a mild loss of momentum in the fourth quarter.

"Higher materials prices appeared to dampen the nonresidential sector at the outset of 2005, as developers deferred and redesigned projects to deal with rising costs," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill. "At the same time, market fundamentals
such as occupancies and rents improved, and this helped nonresidential building to regain an upward trend as the year progressed. The 2005 construction market also featured a robust performance by single-family housing, which established a new annual high.

"By year's end, though, homebuilding began to ease back, and the extent to which this cooling off continues will be a major factor shaping the 2006 construction market."

The annual statistics for total construction in 2005 revealed growth in all five of the nation's major regions. The Midwest (4 percent growth) had the smallest increase.

Figures released Feb. 1 by the Associated General Contractors of America said that construction spending in December set a record for the sixth straight month - it was up 1 percent from the previous month.

"The best-performing private nonresidential segment in 2005 was manufacturing construction, with a 21 percent year-over-year gain," said AGC chief economist Ken Simonson said. "I expect another strong year in 2006." He added that growth in 2005 was distributed "among major construction segments."

Gleason tapped for safety standards post
Patrick "Shorty" Gleason, president of the Michigan State Building and Construction Trades Council, was appointed earlier this month to the Michigan Construction Safety Standards Commission. He was appointed by Gov. Jennifer Granholm to represent individuals actively engaged in construction operations on the employee level for a term expiring March 18, 2007.

He succeeds Tom Boensch who has resigned. The Construction Safety Standards Commission provides rules and establishes safety standards for construction operations to protect the life and safety of construction workers in Michigan.

This appointment will be confirmed unless disapproved by the Senate within 60 days.


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