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February 4, 2002

'Waiting week' kills enthusiasm for hike in jobless benefits

$2.9 billion in jobless money is beginning to stink like hell

Final destination nears for Midfield Terminal

Union membership numbers flat in 2001

Union density unrelated to higher wages, researchers say

Jewelry drawing raises $7,000



'Waiting week' kills enthusiasm for hike in jobless benefits

By Maty Mulcahy

LANSING -News reports in January touted that House Republican lawmakers who control the state legislature finally opened up their hearts - and state coffers - to provide relief to Michigan's growing number of jobless workers.

Republicans are pushing a proposed benefit increase of up to 38 percent for jobless workers, to a maximum if $415 per week. Republican House Speaker Rick Johnson called the increase "the right thing to do," with state unemployment at its highest rate in six years. But their proposal includes instituting a waiting week for benefits - which effectively institutes a decrease of benefits for short-term jobless workers.

"It's a testament to double-talk," said Michigan AFL-CIO Legislative Director Tim Hughes.

Currently, jobless workers can earn a maximum benefit of $300 per week. That amount was set in 1995, when anti-worker legislation was signed into law that froze the maximum benefit, cut benefits across the board and made it harder for part time, low-wage and seasonal employees to qualify for benefits. The maximum amount has never been increased because Republicans who drafted the law made no allowance for increases, not even for inflation.

The new Republican plan is a real kick in the rear for jobless workers who are out of work for three weeks or less. Workers who are currently jobless earn a maximum of $300 each week for the first three weeks of benefits, for a total of $900 over three weeks.

If this Republican plan is implemented as proposed, the same jobless worker would get $0 in benefits for the first week, $415 for the second week and an additional $415 the third week for a total of $830 for all three weeks - a net loss of $70.

"They say they're doing this to help workers, but this doesn't add up at all," Hughes said. "It is important that we address this issue in a way that helps all unemployed workers, while hurting none."

According to Hughes, the House Republican plan would:

  • Eliminate the first week of UI benefits for more than 77% of all laid-off workers. The plan includes a so-called waiting week would more accurately be called a "no benefit" week, since benefits for that week would only be paid if the worker remained unemployed for at least 26 weeks. According to the Michigan Unemployment Agency, only 22.68% of all laid-off workers are unemployed for the full 26 weeks of eligibility.
  • Cut benefits for 40 percent of Michigan's laid off workers. The Republican proposal only raises the maximum UI benefit. According to the Michigan Unemployment Agency, 40 percent of laid off workers receive less than the maximum benefit. These jobless workers would receive no increase under the plan, but would lose a week of benefits due to the proposal's "no benefit" week.
  • Hit building trades workers particularly hard. Members of the building and construction trades unions are frequently laid off for short periods of time. Under the Republican plan with the "no benefit" week, workers would have to be unemployed for at least 3.5 weeks before they would see a net increase in their jobless benefits. For thousands of unemployed construction workers, this plan is a benefit cut, not an increase.

The Republican package also includes a measure creating a "Worker Financial Security
Account" that allows employees to pay into a savings plan similar to a 401(k), and to make tax-free withdrawals during periods of unemployment.

Other parts of the GOP plan include providing an income tax deduction to unemployed parents who are paying college tuition for their children and waiving penalties and
interest on delinquent income tax payments owed by unemployed workers for up to
six months, provided the income tax returns are filed on time.

A better way to raise unemployment benefits, Hughes said, can be found in HB 4188, currently in the House Employment Relations, Training and Safety Committee. It includes the following key provisions:

  • It provides for indexing of the maximum benefit to 58% of the state's average weekly wage, as provided by law prior to 1995. This would result in the same maximum benefit of $415 as called for in the Republican proposal, but with an inflation adjusted maximum benefit in future years so the maximum benefit would not lose its purchasing power in future years.
  • It gives an increase to all unemployed workers, not just higher wage earning workers who qualify for the maximum benefit. Laid off workers currently receive 4.1 percent of their gross high quarter wages up to the maximum of $300. That figure should be raised to 4.3 percent, giving an increase to every laid-off worker.

"We look forward to working with House Republicans in the weeks ahead to develop a proposal that labor can support," said Michigan State AFL-CIO President Mark Gaffney.


$2.9 billion in jobless money is beginning to stink like hell

Tradesman Viewpoint
By Marty Mulcahy

"Money is like manure - if you spread it around, it does a lot of good, but if you pile it up in one place, it stinks like hell."
- Texas financier Clint Murchison

The wealth isn't being spread to the growing population of Michigan's jobless workers, who receive a paltry $300 benefit maximum for unemployment compensation - the lowest among states in the Upper Midwest region.

The low benefits and the good economy have helped enable the state's Unemployment Insurance Trust Fund to cut employer taxes for seven straight years - and amass a fund worth $2.9 billion. As recently as Dec. 3, the state Unemployment Agency announced a UI tax cut for Michigan employers worth a total of $200 million.

"We have a very healthy trust," said Unemployment Agency Director Jack Wheatley. "In fact, our fund has one of the largest cash reserves among all of the state UI trust funds in the nation and has enough funds to pay well over two years worth of unemployment benefits."

But the pile of money is starting to stink, and it's beginning to sound as if employer associations think they're entitled to administer the huge stash the way they see fit.

The current Republican plan to increase Unemployment Insurance benefits to $415 per week - while imposing a waiting week for benefits - would cost employers at least $275 million, the Michigan Manufacturers Association estimates.

David Zurvalec, vice president for industrial relations for the association, said, "we're very concerned that we don't see a provision for a waiting week that could offset some of those costs."

Marlene Jobe, executive director of the Employers Unemployment Compensation Council, said, "We'll have to run the numbers on the impact this would have on the UI fund, but at first glance, this proposal is very expensive."

If you're out of work - and a growing segment of Michigan's construction industry is - then that's your money they're talking about, folks. There is no doubt that these employer groups, not the employees, have the ear of Republicans who control the purse strings in Lansing.

Many building trades workers support Republicans on issues like gun rights and less government regulation. But the fact that the GOP has completely ignored the economic needs of jobless workers since 1995, and is pushing for a waiting week in the effort to "increase" jobless benefits, once again illustrates their long history of being pro-business, and anti-worker, when it comes to economic issues.

"A simple $115 UI benefit increase will not jeopardize the fiscal stability of the UI Trust," said Michigan AFL-CIO President Mark Gaffney. "The Unemployment Agency just announced a $200 million dollar UI tax cut for employers - the seventh year in a row that UI taxes for employers have been cut. These tax cuts equal $1.2 billion. If the UI trust fund is healthy enough to allow $1.2 billion in tax cuts for businesses, then the fund is healthy enough to give unemployed workers an extra $115 a week without instituting a waiting week for benefits."


Final destination nears for Midfield Terminal

By Marty Mulcahy

Ladies and gentlemen, please observe the "fasten your seatbelt sign" - the building trades are preparing to bring the Midfield Terminal in for a landing.

Nearly four years after the first dirt was moved on construction of the $1.2 Midfield Terminal at Detroit Metropolitan Airport, the largest public works project in the state's history is beginning to wind down.

In mid-January, there were still about a thousand construction workers on the project, and a good deal of work remained to be done. But the new 97-gate terminal in Romulus with the cumbersome name - the Edward H. McNamara Terminal/Northwest WorldGateway - is on course to open on Feb. 24.

"We've had such an aggressive schedule, from the design, to the hiring of the contractors, to the administration of the contracts," said Chuck McCloskey, Northwest Airlines' director of construction for the Midfield Terminal. "It's a challenge out there every day, but we have a good crew of contractors and a good labor force." Huber, Hunt and Nichols is the general contractor on the project.

Getting to the point of moving passengers through the mile-long terminal seems a long way off, but signs of completion are everywhere. Some sections of the terminal were virtually complete during our visit on Jan. 21, waiting only for plastic to be removed from seats and a few other finishing touches. In other areas, there was still a significant amount of work to do, especially in the food, clothing and specialty shops that line the concourse. Wayne County and Northwest Airlines are holding fast to the Feb. 24 opening day schedule.

"It's looking like a realistic opening date, but the entire terminal may not be open," said Kevin Wieczorek, vice president of operations for Motor City Electric, a subcontractor on the project.

The behemoth $1.2 billion project has had its share of problems, with cost overruns, an opening that has twice been delayed and numerous change orders. Wieczorek said one of the biggest headaches took place in September, when electrical subcontractor The State Group walked off the job, leaving in their wake materials and fixtures that couldn't be located, mislaid plans and general confusion.

"It was a horrible mess, but Local 58 provided us with top-notch people to get the job done, and we kicked butt," Wieczorek said. "We had 400 people out here to get caught up. If there's one thing about this job that I'm proud of, it's the way the workers have come through."

When the terminal opens and the bugs get worked out, all the difficulties involving the construction process will probably be forgotten - just like they were after similar complaints were made during the construction of Comerica Park. In fact, with the new Midfield Terminal, the traveling public is sure to see the facility as a vast improvement - the existing terminals get abysmal ratings from the traveling public.

"The whole project is going to be an asset to the community," McCloskey said. "Passengers are going to love this facility. It will move them efficiently and it will treat them right."

The new $1.2 billion terminal features:

  • 97 gates
  • 18 luggage claim carousels
  • 11,500-parking spaces, with the largest parking structure in the world.
  • International processing facility, with the capability of processing 3,200 passengers per hour
  • 60 immigration positions
  • 25 commuter gates with passenger-loading bridges
  • 1.5 miles of moving walkways
  • Two 200-passenger indoor trams
  • More than 80 shops and restaurants - the second-largest concessions program of any airport in the United States

"This is probably one of the most important public works projects that's ever been undertaken in southeastern Michigan," said Northwest Airlines Chief Executive Officer Richard Anderson in a published interview last November. "It will be monumental, not only for southeastern Michigan, (but) it's for all of Michigan . . . particularly the regional jet facility that we built. It is the link for Escanaba and Traverse City and the small communities of Michigan, too. It will transform this airport to the highest-quality international hub facility in the world.

"Our idea is we are going to surpass Chicago as the most convenient and most customer-friendly connection point for the upper Midwest and the large population centers east of the Mississippi."

The terminal is designed to accommodate 30 million passengers a year.

Bob Luxon, job superintendent for Plumbers Local 98 working for subcontractor John E. Green, said that the project peaked out at about 200 pipe trades workers. In recent weeks they were down to 16 plumbers and pipe fitters, who were "busy making final adjustments, doing odds and ends and basically just wrapping things up."

"It's really a very impressive design and a beautiful building," Luxon said. "There have been some rough times out here, but all the building trades can be proud of the work they've done. The tradespeople have built a landmark that will be here for years to come."

WORKING IN THE service pit in front of one of the moving walkways at the new mile-long Midfield Terminal at Metro Airport are Mike Cicchetti and Van Wiley Jr. of Elevator Constructors Local 36 and Otis Elevator Co. The terminal is scheduled to open Feb. 24.

A TOOL TRAY is rolled down the north concourse by Tom Gilleran of IBEW Local 58 and Triangle Electric. "In spite of the difficulties that we have encountered on this job, the work of all the trades has been impeccable," said 58 BA Ed Kohler.


Union membership numbers flat in 2001

Union membership in the U.S. remained stable in 2001 despite economic uncertainty and massive layoffs after the events of Sept. 11.

According to figures released last month by the Labor Department's Bureau of Labor Statistics, the number of union workers in the U.S. reached a 12-month average of 16.3 million - up by 18,000 workers, a number which is statistically even with 2000. The total number does, however, represent an increase of 180,000 over the past five years.

Last year, unions represented 13.5 percent of the U.S. labor force, but it's an historically low number. The union membership rate has fallen from a high of 20.1 percent in 1983, the first year for which comparable union data are available, according to the BLS. At 18.4 percent, the nation's construction industry enjoyed one of the highest unionization rates.

"Despite a year of record layoffs and historic national upheaval, unions held their own in terms of membership in 2001," said AFL-CIO President John Sweeney.

Unions organized 400,000 new workers last year, keeping the percentage steady. Half of the 16.3 million union members in the U.S. lived in six states - California, New York, Illinois, Michigan, Ohio, and Pennsylvania.

With 20.8 percent of its workforce union, Michigan ranked fourth in the nation in 2001, behind New York, Hawaii and Alaska, although that number for our state dropped a full percentage point from 2000.

"Unions can still do much more to help workers improve their lives by forming unions at work, but the numbers show steady dedication and perseverance is laying the groundwork for later change," Sweeney said.

BLS noted 9 percent of all private sector workers are unionized, compared to 37.4 percent of public sector workers.

In 2001, full-time wage and salary union members had median usual weekly earnings of $718, compared with a median of $575 for wage and salary workers who were not represented by unions.


Union density unrelated to higher wages, researchers say

Have higher wages in the unionized construction industry led to unions pricing themselves out of some employment markets?

That's a widely held belief in many areas of the country. Construction unions cemented a reputation in the 1960s and 1970s for demanding excessive pay, and that stigma hasn't completely gone away.

But two researchers, one from Michigan State University, one from Rutgers, maintain that the relatively high wage differences between union and nonunion construction workers make no difference in the unionization rates for a given area.

According to the Construction Labor Report, Rutgers School of Management and Labor Relations professor Paula Voos and MSU professor Dale Belman studied construction wages in three periods, 1975-79, 1988-1990 and the year 2000 to see if it was true that in states with a high union-nonunion wage differential, there was a lower rate of unionization in 1990 or 2000.

"Mostly unions held on to their membership. In the places they were strong they remained strong," Voos said. In the places they were weak, they remained weak.

For example, nonunion laborers in the South-Central region of the U.S. earned an average wage-fringe salary of $11.65 per hour in 2001. The lousy wages in that region reflect the general weakness of unions in the region, because there isn't much incentive to unionize: the average union laborers in the same area earned $13.87, according to PAS, Inc.

The researchers, who appeared on a panel before the Industrial Relations Research Association last month in Atlanta, said unions were better able to hold on to their membership in states where a prevailing wage law exists. They also found that in states with a high percentage of residential construction, unions tend to lose more members.


Jewelry drawing raises $7,000

$7,000 WILL HELP FUND the good works at the parishes of St. Rita's and Holy Trinity in Detroit, compliments of Pongracz Jewelers and Point Gemological Laboratory in Grosse Pointe Farms. Iron worker Mike Decker won first prize in the drawing, a 3.5 karat ladies diamond bracelet. Another bracelet and a watch were also won by tradesmen in the December drawing, and the jewelry donated by Pongracz had a total value of $7,000. "People in the building trades support us, and I just wanted to give something back to the community," said Pongracz owner Dan LaLonde, center, who is also an Operating Engineers Local 324 member. He was flanked Greater Detroit Building and Construction Trades Council Secretary-Treas. Patrick Devlin, left, and President John Hamilton, right. Behind them are GDBTC Executive Board meeting attendees (l-r) Richard Egerer of Elevator Constructors Local 36, Lou Walczak of Cement Masons 514, Ed Coffey of the GDBTC, Dave Bremerkamp of Heat and Frost Insulators 25, Gary Young of Plumbers 98, John Marek of Boilermakers 169, Vern Covington of Laborers 334, Tom Aloisio of Teamsters 247, Mark King of Bricklayers and Allied Craftworkers 1 and Jim Hamric of Iron Workers 25.



Bubba Chiles' sister needs help
Contract settlements in 2001 in the nation's unionized construction industry averaged an increase of $1.37 or 4.5 percent for the first year, the Construction Labor Research Council reported last month.

The average second-year increase for multi-year agreements was $1.56 or 4.7 percent.

"These amounts represent a continuation of a slow, but long-term upward trend in average annual settlement amounts that has been occurring since 1994," the CLRC report said. Pay hikes had averaged about 3 percent or less until the mid-1990s, when construction pay finally started to move.

About two-thirds of all settlements were between three and five percent. And, contract durations lengthened, with 25 percent of new contracts negotiated for four years or more.

Union wages continue to rise
Contract settlements in 2001 in the nation's unionized construction industry averaged an increase of $1.37 or 4.5 percent for the first year, the Construction Labor Research Council reported last month.

The average second-year increase for multi-year agreements was $1.56 or 4.7 percent.

"These amounts represent a continuation of a slow, but long-term upward trend in average annual settlement amounts that has been occurring since 1994," the CLRC report said. Pay hikes had averaged about 3 percent or less until the mid-1990s, when construction pay finally started to move.

About two-thirds of all settlements were between three and five percent. And, contract durations lengthened, with 25 percent of new contracts negotiated for four years or more.

636 BA Inman running for commissioner
Building trades workers and their families are urged to vote for Pipe Fitters Local 636 Business Agent Chuck Inman, who is running for Oakland County Commission, 4th District, in a special election.

The primary election will take place on Monday, Jan. 8; but the more important general election will be held Tuesday, Feb. 5. Inman is running on the Democratic ticket in a heavily Republican area, which includes Clarkston and portions of Waterford and Independence Twp.

A 32-year member of Local 636, Inman has been an elected union official for the past 14 years.

"I am proud to be a part of the success my local has accomplished in keeping the membership of our union well informed on our issues," Inman said, "while providing a voice for the working men and women of our local."
If you can help by posting a lawn sign or in any other way, Inman can be paged at (248) 523-1841.


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