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February 27, 2009

Stimulus bill has something for everyone; but trades would like more

Imperfect bill a 'cushion,' not a cure for construction unemployment

Michigan stimulus windfall pegged at about $7 billion

Will the New, New Deal be enough?

Finishing touch for HealthSource

Today's lesson: Employee Free Choice Act 101

'Hire Michigan First' would put local workers first in line


Stimulus bill has something for everyone; but trades would like more

By Mark Gruenberg
PAI Staff Writer

WASHINGTON (PAI) - The $790 billion American Recovery and Reinvestment Act, known as the stimulus bill, contains something for just about everyone as it tries to help pull the economy out of the deepest crash in at least 24 years. But analysis also shows that not everything everyone - including in the labor movement - wanted is in it.

The measure is one-third tax cuts and two-thirds spending. The whole point, President Obama says, is to create or maintain between 3.5 million and 4 million jobs which would otherwise go down the drain, adding to the nation's 11.62-million-person jobless rolls and 7.6% unemployment rate.

Obama made those same points on Feb. 12 to a crowd of Auto Workers at the Caterpillar plant in Peoria, Ill. And when he finished, the head of the still-profitable firm - which raised its profit margins in past years by imposing a two-tier contract on UAW, among other moves - said he supports the stimulus, but did not promise to rehire any of the 20,000 workers worldwide Cat plans to lay off.

Details of the bill include:

  • About $50 billion for construction of roads, airports, bridges and other projects nationwide. Construction unions estimate each $1 billion in construction spending creates between 22,000 and 47,000 jobs, depending on the type of project. The unions welcomed the spending, but some leaders - including Steel Workers President Leo Gerard and Laborers President Terry O'Sullivan - lobbied for more. Of that infrastructure spending, about four-fifths will go for the immediate projects, while the rest (about $11 billion) is a down payment on upgrading the nation's electricity grid.
  • $54 billion earmarked for state budgets. AFSCME lobbied for even more. The money will preserve social services for the jobless, go for highway and school building and to limit layoffs of teachers, fire fighters and others. There's also $87 billion to states to help pay for Medicaid. States face huge deficits, led by California's $42 billion. The smaller federal figure means fewer people will avoid layoffs, especially since - at the insistence of key swing vote Sen. Susan Collins, R-Maine - part of the states' funds would go not to such people programs but to possible energy retrofitting of schools. American Federation of Teachers official Nancy Van Meter said "the stimulus money for education was cut in half and the school construction money was zeroed out" by the Senate. Negotiators restored part of the funds, and included the school construction money, which would also help employ building trades workers, in the state aid.
  • The bill also contains $15.6 billion to increase maximum Pell grants to help students afford college, an Obama goal.
  • Retention of the Senate's modified "Buy American" provision, saying all projects in the bill, not just the infrastructure projects, should use U.S.-made materials, as long as those purchases are made "in a fashion consistent with worldwide trade rules and obligations" for government procurement. The Steelworkers and the Congressional Steel Caucus pushed the Buy America plan, saying it continued 75-year-old policies.
  • The European Union still rails against "Buy America" as too protectionist, prompting AFL-CIO Secretary-Treasurer Richard Trumka to point out the EU has more-restrictive government procurement rules, banning competition against national industries in drinking water, telecommunications, energy and transportation.
  • Extended unemployment benefits and a subsidy to help jobless workers pay COBRA premiums to their former employers in order to keep health insurance. But the amount for the COBRA premium subsidies was cut down, thus lessening how many weeks each jobless worker could get federal funds to help pay for health care.
  • There's also a $20 billion increase for food stamp spending.
  • $1 billion for a "near-zero emissions power plants" to encourage energy efficiency and reduce emissions of carbon into the atmosphere.
  • A tax deduction for new car purchases, inserted by Sen. Barbara Mikulski, D-Md., and designed to help sales as the three U.S.-based car companies hit the financial rocks, was severely cut.


Imperfect bill a 'cushion,' not a cure for construction unemployment

By Marty Mulcahy
Managing Editor

From the perspective of the building trades, a perfect federal stimulus package would have lavished hundreds of billions of dollars on infrastructure upgrades, road and bridge projects, school and public building improvement work, and green energy investments.

But the $787 billion American Recovery & Reinvestment Act is far from the construction industry's ideal. It's loaded with hundreds of billions in federal dollars intended to stimulate the economy and help Americans in other ways.

Still, the stimulus provides for $135 billion in U.S. construction and infrastructure investment, which will create nearly two million jobs over the next two years, according to the Associated General Contractors (AGC) of America.

The analysis, conducted by the association's chief economist, Ken Simonson, concluded that the infrastructure and construction funding would create or save 650,000 construction jobs and 300,000 positions in related fields such as equipment and material supply. An additional 970,000 jobs in the broader economy are also expected to be created or supported by the investments.

"Whether or not you wear a hard hat for a living, these construction investments will make a difference for the better," said Simonson. "Beyond the immediate benefits, the new infrastructure projects will make businesses more efficient, commuting more reliable and our economy more prosperous for years to come."

President Obama signed the legislation Feb. 17, which was adopted completely along party lines in the House (all Democrats for, all Republicans against). Only three Republicans joined Democratic senators in passing the bill.

"We are remaking the American landscape with the largest new investment in our nation's infrastructure since Eisenhower built an Interstate Highway System in the 1950s." Obama said. "Because of this investment…men and women will go to work rebuilding our crumbling roads and bridges, repairing our faulty dams and levees, bringing critical broadband connections to businesses and homes in nearly every community in America, upgrading mass transit, building high-speed rail lines that will improve travel and commerce throughout our nation."

An analysis of the construction portion of the stimulus package by Richard Kroman of the Engineering News Record said that "with most of the stimulus directed toward infrastructure, the news isn't uniformly good" for all the trades.

"Highway and bridge construction should grow modestly, but nonresidential building construction will begin to turn toward cyclical lows," he wrote. "The stimulus package will cushion, not save, the buildings sector. What is certain in a time of uncertainty, economists say, is that the industry will be much more public-works-oriented than at any time in recent history."

Late in the legislative process, President Obama shepherded into the bill $8 billion in high speed rail money, as a start toward modernizing the nation's train corridors. And, one of the three Republican senators who voted for the package wanted, and got, about $20 billion in school construction stripped from the final bill. However, local school districts can spend money they do receive on school construction.

"Probably the biggest disappointment," said the Engineering News Record, "was that the final package has no specified funding for school construction."

Said American Council of Engineering Companies President Dave Raymond: "The final package is not perfect, but it will invest well over $100 billion in infrastructure improvements at a time when this investment is desperately needed."

The anti-union Associated Builders and Contractors praised some portions of the stimulus bill, but predictably had no use for the fact that workers would receive prevailing wages on all projects funded by the stimulus package. "Including Davis-Bacon Act provisions in the bill not only increases wasteful spending but will not offer any additional benefits to the economy," said Jerry Gorski, 2009 ABC national chairman. That's debatable - especially for workers holding union cards: union Hardhats on average earn about a third more than their nonunion counterparts and those higher earnings are certain to add benefits to the economy.

AFL-CIO Building Trades Department President Mark Ayers called the legislation the "first critical step in revitalizing our economy and offering renewed hope for millions of struggling American working families and their communities."

We reported in the past about Michigan and other states lining up "shovel ready" projects, so that the stimulus money can bring about employment as quickly as possible. Indeed, for infrastructure money, the goal in the stimulus is to use at least 50 percent of that money in the first four months after the bill's signing. Overall, however, the ENR said only $34.8 billion, or 11 percent of the stimulus money, will be spent by Sept. 30. Then the pace picks up in 2010.

"There's no doubt the stimulus will have a positive impact for construction businesses and their workers across the country," said Stephen Sandherr, chief executive officer of the AGC. "When you get beyond the politics and the policy, the fact remains these investments will put people to work, save businesses, and help rebuild aging infrastructure."


Michigan stimulus windfall pegged at about $7 billion

Michigan's share of the $787 billion American Recovery & Reinvestment Act stimulus, approved by Congress and signed into law on Feb. 17 by President Barack Obama, comes in at about $7 billion for 2009 according to some estimates.

That's a pretty good chunk of change, according to a Moody's economist, who said hard-hit Michigan (auto industry) New York (financial services) and Florida (housing) are at the top of the list of states when it comes to getting proportionally larger portions of the stimulus money.

According to Michigan Construction, citing information from the National Conference of State Legislatures and the National Governor's Association, some of the construction-related portion of the money breaks down like this:

$847 million for highway and bridge construction.

$279 million for "weatherization" work.

$171 million for wastewater treatment and collection system work.

$165 million for grants to mass transit systems.

$67 million for drinking water system improvements.

$43 million for public housing.

"To anyone who has an understanding of the years of under-investment in Michigan's public works infrastructure - or any state in the union, for that matter - the sums coming our way seem pathetic," commented Guy Snyder of Michigan Construction

To illustrate the relative size of the federal stimulus investment for construction, the biggest chunk of stimulus spending, $847 million for roads and bridges, would increase the funding level by about 26 percent over the $3.2 billion that was invested in Michigan roads in 2008. Last November, the bi-partisan Michigan Transportation Funding Task Force estimated that in order to obtain a "good" investment level in highways, roads and bridges, Michigan would need to nearly double its current annual investment to a total of $6.1 billion,

Still, the federal stimulus investment isn't chicken feed. The Associated General Contractors of America estimated that each $1 billion in nonresidential construction spending would add about $2.3 billion to the state's Gross Domestic Product and about $754 million to personal earnings. Each $1 billion in such construction investment, the AGC said, would also create or sustain 20,000 jobs, 6,800 of which would be on-site construction jobs within Michigan.

Citing government figures, the AGC said the construction industry in Michigan (residential plus nonresidential) employed 136,000 workers in December 2008, a decrease of 76,100 (35.8%) from June 2000 when construction employment was at its peak for recent years.

According to the labor-backed Center for American Progress, over time Michigan could get value of about $18 billion overall from the federal stimulus, including money for state government operations, increased jobless benefits and food stamps, health insurance aid for the poor and jobless and a tax cut

More than $4 billion of Michigan's stimulus money is slated toward just two areas: Medicaid and school spending. At press time, details regarding how and when the entire stimulus package for Michigan would be divvied up were scant and confusing. It wasn't clear whether there would be more money available for construction through areas like school work or green building. The State of Michigan late last week was working on a website to detail the stimulus spending.

The federal stimulus, said Michigan Gov. Jennifer Granholm, will give Michigan's economy "the jump start it needs to create jobs for today and tomorrow while providing a safety net for our families during this national economic crisis."


Will the New, New Deal be enough?

By Robert Reich
Former U.S. Secretary of Labor

The stock market reached a six-year low today. Why? Some blame loose talk (including that of former Fed Chair Alan Greenspan) about nationalizing the nation's banks. Others blame Obama's new plan for helping homeowners who may not be able to pay their mortgages. But the real culprit is the accelerating decline in aggregate demand - consumers, businesses, and exports. Companies are losing money because their customers are disappearing. That's precisely why the stimulus is so important - indeed, why many of us fear it's too small.

One of the oddest of right-wing claims is that FDR's New Deal didn't pull America out of the Great Depression, so Barack Obama's "New New Deal" won't, either. While it's true that the New Deal didn't end the Great Depression, three points need to be impressed on the hard-pressed conservative mind:

1. The New Deal relieved a great deal of suffering by establishing social safety nets - Unemployment Insurance, Aid for Dependent Children, and Social Security for retirees. Most have remained, a worthy legacy. But because the structure of the economy has changed (a much higher percentage of the working population is now employed part-time in several jobs or as independent contractors, for example), there are gaping holes in the safety net which a New New Deal should fill in order that the Mini Depression we're experiencing not cause excessive harm.

2. FDR's public works spending did help the economy somewhat. By 1936, U.S. the economy was showing some life. Unemployment was declining and consumers were beginning to buy. But FDR cut back on public-works spending, and the economy sank back into its former torpor. A warning to Obama: Don't worry about so-called "fiscal responsibility" when aggregate demand still falls far short of the economy's total capacity.

3. The Second World War pulled the nation out of the Great Depression because it required that government spend on such a huge scale as to restart the nation's factories, put Americans back to work, and push the nation toward its productive capacty. By the end of the war, most Americans were better off than they were before its start. Yes, the national debt ballooned to 120 percent of GDP. But the debt-GDP ratio subsequently declined -- not just because post-war spending dropped but because the economy continued to grow as war production converted to the production of consumer goods. Lesson: The danger isn't too much stimulus, it's too little stimulus.


Finishing touch for HealthSource

By Marty Mulcahy
Managing Editor

SAGINAW TWP. - Another year, another phase completed during the three-year, $44 million transformation and modernization of HealthSource-Saginaw.

The three-year-long demolition, renovation and expansion project will result in a wholly changed HealthSource facility, which provides psychiatric care, substance abuse treatment and medical rehabilitation services.

Last week, the trades and construction manager Spence Brothers were wrapping up two of the facility's new pods, A and B, which will allow the transfer of all inpatient services to newly constructed areas. The new areas include patient rooms, medical rehabilitation and skilled nursing care.

Early last winter, HealthSource was taking over the new psychiatric portion of the facility to the hospital. When the project is complete this year a "Main Street" will tie all elements of the project together, including the previously completed C, D, E and F pods.

The new facility will operate on a single level on space that will replace a five-story hospital building - it's the victim of having rooms that are too small and a layout that's inadequate for modern health care. The entire project consists of construction of approximately 169,310 square feet of new patient/resident/client care facilities and renovation of an additional 47,630 of existing square feet.

"It's been a good project," said Assistant Project Manager Herb Spence. "HealthScource is getting a nice, quality building."

SOCKET PLATES in the "A" Pod at the HealthSource Saginaw project are installed by Andy Egerer of IBEW Local 557 (foreground) and Todd Fink of IBEW Local 498. They're working for Thiel Electric.

SETTING A SINK in a client room at the HealthSource Saginaw project in B Pod is Rick Reid of Plumbers and Steamfitters Local 85, working for Remer Plumbing.



Today's lesson: Employee Free Choice Act 101

By Marty Mulcahy
Managing Editor

The Employee Free Choice Act isn't on the general public's radar screen, and it's also probably not much more than a faint blip on the collective psyche of the nation's union workers.

But that's going to change throughout this year. Organized labor's No. 1 legislative priority is also Public Enemy No. 1 for the Big Business community, which has pledged to spend about $200 million in the media and elsewhere to beat up the Employee Free Choice Act in the court of public opinion.

One of the ways labor is fighting back is through "Train the Trainer" seminars held across the country. One of the first in Michigan was conducted Feb. 16 by Mark Bott, lead organizer for the Michigan State Pipe Trades. About 30 union representative from various trades attended the seminar, held at the Plumbers Local 98 Training Center in Troy.

"If you think Obama took heat over the stimulus package, just wait 'till this comes up," Bott said. "Our strength is in our numbers and we have to be able to mobilize our membership to contact their lawmakers, because we know some legislators are getting cold feet over this issue."

The Employee Free Choice Act represents an effort by unions to simplify union organizing by allowing workers to form unions in their workplace through majority sign- up, rather than through a lengthy National Labor Relations Board election process. It is hoped that passage of the EFCA in Congress will finally bring about a major, lasting upswing in union membership in the U.S.

"We like driving the car," said Wal Mart CEO Lee Scott, as reported in The Nation. "And we're not going to give the steering wheel to anybody but us." Said AFL-CIO director of government affairs Bill Samuels: I get the sense that this is more important to them than even taxes or regulation."

Unions have long maintained that employers have the upper hand in any organizing drive, with the ability to hold captive audience meetings, coerce employees, and delay actions for years with legal actions and appeals.

The business community takes the opposite argument. The ultra-conservative Heritage Foundation wrote that "employers routinely refuse to recognize unions on a card-check-only basis because publicly signed cards do not reflect employees' preferences. Public card signing exposes workers to pressure, harassment, and threats from the union."

What's typically left unsaid in this argument by the Big Business community, isn't the theoretical pressure and harassment by the unions - but the real-life pressure and harassment by employers. The AFL-CIO estimates that 25 percent of companies unlawfully fire pro-union workers.

"The companies have all the power to decide whether to hold an election or not," Bott said. "If there is an election, beforehand they can add employees from the sales or office staff to those who are voting, and tell them to vote against the union. The system is broken. Coercion is rampant. They threaten to shut the place down. They single out the loudest pro-union employees and lay them off or fire them or transfer them. They shoot the generals and the privates all fall in line because they don't want the same treatment. It's illegal but it happens all the time."

The EFCA would give workers a fair and direct path to form unions through majority sign-up, help employees secure a contract with their employer in a reasonable period of time, and toughen penalties against employers (up to $20,000 for significant incidents) who violate their workers' rights.

Big business opponents of the EFCA have employed what the AFL-CIO has called a "one-note" strategy to derail the labor law reform. Over and over in the past few months, letters to the editor and editorials claim that the bill would do away with secret ballot elections, while stressing that elections without secret ballots are undemocratic.

In fact, points out the AFL-CIO's American Rights at Work website, "a quick read of the legislation reveals that the bill does not eliminate secret ballot elections." The Employee Free Choice Act gives workers a chance to choose the method used to vote for or against a union in the workplace: workers can choose to cast signed paper ballots, or hold a formal election process. In either case, control is taken away from business owners and given to employees.

Organized labor wants to see the Employee Free Choice Act taken up by Congress by Labor Day. Obama his signaled his support for the bill - but how much he will lobby for it is unknown.

"Armageddon" was how a U.S. Chamber of Commerce spokesperson described the upcoming battle. The Chamber of Commerce, The Nation reported, "is fanning the flames on this, saying this is the epic battle between labor and business," a key strategist who favors the EFCA told the publication. "And it scares the s--- out of the Obama people and some of the Democrats."

A GROUP OF building trades union representatives listen to Mark Bott, lead organizer for the Michigan State Pipe Trades, talk about the Employee Free Choice Act.


'Hire Michigan First' would put local workers first in line

LANSING - The House Labor and Commerce Committee sent the "Hire Michigan First" job-creation plan to the full House on Feb. 10, moving on legislation to ensure that Michigan residents - not those from other states or countries - get first crack at jobs created by taxpayer dollars. The plan will also crack down on those that hire undocumented workers by canceling their state contracts and tax incentives.

The legislation came up last year, also. The driving force behind the Hire Michigan First policy is the state's approval of a tax-free Agricultural Processing Renaissance Zone to support the construction of an ethanol plant in Marysville. Despite the state's support, an out-of-state company brought in its workers from Texas for the project.

"Clearly business as usual is not working for Michigan employees and businesses," said State Representative Fred Miller (D-Mt. Clemens), the lead sponsor of the package. "With unemployment reaching the double digits in Michigan, it's more important than ever to make sure that Michigan tax dollars are creating jobs for Michigan residents. In this economy, we must fight for every single job."

The "Hire Michigan First" plan would:

  • Award state tax breaks and other economic development tools to companies that hire the most Michigan residents. This rule would apply to projects handled by the Michigan Economic Development Corp. and certain state-funded programs, including the Michigan Economic Growth Authority, the Renaissance Zone Act and several others.
  • Encourage transparency and accountability by requiring companies that take economic development incentives to report on who they hire to ensure that Michigan residents are put first.
  • Crack down on companies that hire undocumented workers by canceling their state contracts and tax incentives, requiring them to pay back incentives they received and barring them from future contracts.

The last provision is drawing fire from the Michigan Chamber of Commerce. A spokeswoman told the Capitol News Service that the legislation forces employers to be "immigration police."

The anti-union Associated Builders and Contractors of Michigan also objects to the bill, because it doesn't address to their satisfaction union contracts which allow the importation of out-of-state workers to Michigan for jobs that require travelers.

Last year Republicans House members either "dissented" or "abstained" from voting on the package of bills that included the Hire Michigan First legislation. One Republican legislator called it "an assault on free enterprise." House Minority Floor Leader Dave Hildenbrand (R-Lowell) argued that the state needs to have a better climate for companies to do business.

"Rewarding companies that hire Michigan workers is a common-sense solution," said State Representative Robert Jones (D-Kalamazoo), the Chair of the Commerce Committee, which approved the legislative package. "Michigan has the best workers around, and they should get the first shot at doing the jobs that their own tax dollars make possible. By getting more folks back to work, we can help more families stay in their homes and get our economy back on track much more quickly."


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