January 16, 2009
rules give pension plans a much-needed break
trades pension plans are healthy, but negative numbers lurk
Topped out C.S.
Mott Hospital replacement 'right on schedule'
outlook for U.S. construction without stimulus
Job losses explode
in final quarter of 2008
A few simple
truths to guide the way
funding rules give pension plans a much-needed break
Christmas for the nation's pension plans came a little early
last year, as President Bush on Dec. 23 signed legislation that
is expected to provide some relief for single- and multi-employer
Union leaders pleaded with Congress late last year to change
the Pension Protection Act of 2006, which required that pension
plans falling below certain funding levels bump up employer contributions
or impose cutbacks on worker benefits until a healthy funding
level - generally 80 percent - is achieved.
The new bill gives multi-employer plans 13 years - instead
of 10 years, which had been the rule - to achieve those higher
funding levels, if needed. It is hoped that the longer period
of time will allow the stock market to bounce back and improve
returns, and for worker hours to increase in order to help the
financial conditions of the pension funds.
The plan approved by Bush and passed by the House and Senate
also allows multi-employer plans to choose to freeze the financial
zone that they are in - Green, Yellow or Red - for one year.
All building trades union plans fall under the "multi-employer"
Building and Construction Trades Department President Mark
Ayers said in a letter to union affiliates that the law would
provide "funding relief for the vast majority of building
trades' multi-employer plans...which, like most pension plans,
have been devastated by the decline in the stock markets."
The legislation gives plans "a little more time to weather
the economic storm," said Karen Lapsevic, Associated General
Contractors' director for tax, fiscal affairs and infrastructure
finance, to the Engineering News Record.
The new law also says that people 70-1/2 years old or older
will not have to take distributions from their retirement plans
as required under current law, allowing them to keep savings
intact for a year longer and avoid a tax hit from the lousy stock
market. (Consult your tax advisor on that issue).
building trades pension plans are healthy, but negative numbers
A survey released in December on the financial status of multi-employer
pension plans - such as those that cover building trades unions
- finds an increasing number of patients on the sick list, but
an overall healthy population.
The survey found that 80 percent of all surveyed plans are
in the "Green Zone," meaning they are more than 80
percent funded. Also revealed by the survey: 12 percent of plans
are in the "Yellow Zone" for funding (less than 80
percent funded or a projected funding deficit within seven years).
And, 8 percent of multi-employer plans are in the "Critical/Red
Zone," with less than 65 percent funding and either a projected
funding deficiency within five years or a projected inability
to pay benefits within seven years.
However: the survey did not take into account the affect of
this fall's market losses. "The market downturn," the
Segal survey said, "which has been more dramatic following
the period (as late as September) when all the certifications
for plans were due, is expected to continue to have a negative
impact on future survey results
The Segal survey combined both calendar year plans (January through
December) and non-calendar-year plans (e.g. June through June).
Compared to the last available calendar report at the end of
2007, the "Green Zone" plans had dropped from an 83
percent funded level.
In other findings:
The survey did not break down the plans by specific international
union, but by general industry. Construction fared relatively
well: 81 percent of union plans are in the Green Zone, with 13
percent in the Yellow Zone and 6 percent in the Red. Transportation
(71 percent of plans were in the Green Zone), and Service (63
percent of plans in the Green Zone) were in worse shape.
The Entertainment category for multi-employer plans were
in the best shape: 100 percent of plans were in the Green Zone.
Even without taking into account the dramatic market downturn
of late 2008, the survey data indicates that, over the next two
years, 10 percent of green-zone plans may migrate into the yellow
zone unless additional actions are taken (up from 7 percent in
the survey of only calendar-year plans).
As we reported last month, those "additional actions"
were laid out in a letter to Congress by the Multi-Employer Pension
Plan Coalition, which includes building trades unions, employers
and business groups. Members of the coalition were seeking more
time for pension funds to improve their funding position through
hoped-for improvements in the stock market and construction man-hours
worked. (They received some more time - see the front page article).
In 2006, Congress adopted the Pension Protection Act, which
was designed to improve the health of pension plans by introducing
benchmarks - and penalties if they are not met during given time
limits- in order to improve the solvency of the plans.
out C.S. Mott Hospital replacement 'right on schedule'
By Marty Mulcahy
ANN ARBOR - The structural steel's up at the massive C.S.
Mott Children's and Women's Hospital Replacement Project, but
it's only the first major milestone that can be marked as "finished"
in the process of completing one of the largest construction
projects in Michigan.
The 13-month-long operation of installing 13,000 tons of structural
steel on 13 levels "was a great job for us," said Garth
Gruno, general foreman for the project's steel erector, Midwest
Steel. "Aside from a couple scratches, we had a flawless
safety record. You couldn't ask for a better group of guys."
With the university on holiday hiatus, a brief topping out
ceremony was held Dec. 30.
A similarly good assessment about the iron work and the overall
project came from Operations Manager Gary Simmons of construction
manager Barton-Malow. "We're right on schedule, right where
we want to be," he said. "Our subcontractors and the
trades are doing extremely well."
The hospital has a price tag of $754 million. Simmons said
there are currently about 160 Hardhats on the job, which should
increase to about 550 at peak employment.
The 1.1 million square-foot facility will span the length
of two football fields. It consists of two conjoined towers -
a nine-story clinic tower and a 12-story tower devoted to inpatient
care. Patient growth has prompted the expansion: A total of 3,845
babies were born in the U-M Women's Hospital birthing center
in fiscal year 2007, compared with about 800 in 1969.
According to the U-M Health Systems, the existing C.S. Mott
Children's Hospital (built in 1969) and the University of Michigan's
Women's Hospital (1950) are being supplanted by "a new and
larger home for specialty services for newborns, children and
pregnant women," - not offered anywhere else in Michigan.
Also included are: a pediatric liver transplant program; a Level
I pediatric trauma program; a pediatric and adolescent home ventilator
program; the Craniofacial Anomalies Program; high-risk pregnancy
services and specialty gynecological services.
Construction will enhance inpatient and outpatient services
within the current Mott Hospital, the Michigan Congenital Heart
Center, the Birth Center and the Holden Neonatal Intensive Care
The facility also will be home to numerous pediatric specialty
clinics within the U-M Department of Pediatrics and Communicable
Diseases as well as Psychology, Autism and Orthopaedics. There
will be an area for both adult and pediatric bone marrow transplant
patients. A helipad on top of the 12-story tower will include
an elevator with direct access to the pediatric emergency center.
When the project is complete in the fall of 2012, the existing
facility will be used to benefit the entire health U-M system.
The space will be used for additional faculty offices, clinic
facilities and family space.
"The next four years are going to bring dust and noise
and a small bit of chaos to this corner of our campus,"
said U-M President Mary Sue Coleman at the project's groundbreaking.
"But we need to look past the construction cranes and yellow
tape that is coming and see what is really unfolding - and that
is the future. The new Mott Children's Hospital and Women's Hospital
will be a source of hope and a place of healing."
The yellow tape, noise and the two tower cranes aren't going
away anytime soon, although more of Midwest Steel's iron worker
staff will be in the next few weeks. Gruno led the steel erection
portion of the job along with Midwest Steel Project Manager Jason
Moss, Sr. Project Manager Jeff Curley and Superintendent Mike
LeBlanc. "We will button things up here and there, and mostly
be done in a couple of months," Gruno said.
The trickiest part of the job, Gruno said, was putting up
a 150-foot clear-span truss over the building's loading dock,
supporting the second, third and fourth floors. "There were
a lot of intricate areas in the building," he said.
Simmons said the biggest challenge so far has been getting
materials into the site - especially structural steel - at the
right time in the right order. "It's an extremely tight
site," he said. "With a lot of materials, we're working
just in time, so it has to come off the truck and into the building.
Sequencing is very important."
One of the now-completed goals was to get the building topped-out
before the end of 2008. "We did that," Simmons said.
"That one of a lot of good things going on around here this
THE FIRST OF THE FINAL TWO IRON beams is lowered
into place on Dec. 30 during the topping out of the C.S. Mott
Children's and Women's Hospital Replacement Project on the University
of Michigan campus in Ann Arbor. About 13,000 tons of steel went
into the hospital's two towers, in an effort led by Midwest Steel.
Constructed on land that had been a parking lot, the new hospital
building is one of the biggest construction project currently
going on in Michigan.
WORKING WITH CONDUIT at the Mott Hospital
project are Matt Kalmbach and Brad Seager of IBEW Local 252 and
THE REMAINING CREW of Iron Workers Local 25
members at the C.S. Mott Hospital Replacement Project stand in
front of the two beams used in the topping out.
outlook for U.S. construction without stimulus
By Marty Mulcahy
If the current dismal work prospects in the U.S. come to fruition,
it would be "simply devastating" to the U.S. construction
industry, with job layoffs amounting to nearly one-third of U.S.
building trades workers.
So said Stephen Sandherr, CEO of the Associated General Contractors
of America at a Jan. 8 news conference. He said a nationwide
survey of 33,000 construction contractors "paint a picture
for 2009 that makes 2008 look good by comparison."
He said 30 percent of the nation's construction workforce
"could be dismissed this year" if current trends don't
change. Sandherr said there were about 7.8 million workers in
the U.S. construction industry in 2000, and today that number
has dropped by 10 percent, or 780,000 workers. Ninety-two percent
of building contractors and 93 percent of road builders are expecting
or are experiencing declining activity, he added.
The saving grace, said Sandherr and a host of AGC contractors
from around the country, would be the economic stimulus program
put forth by the incoming Obama Administration, including investment
in roads, schools public buildings and green construction.
The same day as the news conference, President-elect Obama
laid out his financial stimulus plan. It didn't have exact numbers
or layout specific uses for the money, but there's speculation
that it could involve spending in the neighborhood of $800 billion,
and up to $1 trillion.
Obama warned of unemployment rates exceeding 10 percent, and
ominously, a "generation" of lost earnings if Congress
doesn't approve his stimulus plan shortly after he takes office.
He said failure to pass the plan would make "a bad situation
Called the "American Recovery and Reinvestment Plan,"
Obama said the blueprint "won't just throw money at our
problems - we'll invest in what works. The true test of policies
we'll pursue won't be whether they're Democratic or Republican
ideas, but whether they create jobs, grow our economy, and put
the American Dream within reach of the American people."
Democrats and Republicans expressed reservations about Obama's
plan - in the Dems' case, it was not necessarily about spending
all that money, but using a portion of it for tax breaks as a
means to stimulate economic activity.
Without the passage of the stimulus, "construction would
continue to be among the hardest hit industries," Sandherr
said. But "if Congress commits to the money," he added,
construction employment prospects "would dramatically improve.
We are doing everything imaginable to ensure that our construction
employment and business forecast does not become a reality."
When asked if one state or region has been hit harder than
another, Ken Simonson, chief economist for the AGC, said "from
what I've been seeing, there downturns in almost every state.
There are just a handful of states (including areas of Texas
and Oklahoma) that have more people on hand for work today than
a year ago."
But the work outlook in those states is expected to worsen
soon too, he said.
Naysayers who claim that infrastructure makes a poor stimulus
because it takes a while for projects to start are off-base,
the AGC leaders said, with billions of dollars in projects that
are "shovel ready."
Brian Burgett, the CEO of an Ohio construction firm, at the
news conference cited the (non)construction of a twin 1,000-foot
lock in Sault Ste. Marie that has been on the drawing boards
for years. The lock, expected to cost $300 million, would work
as a backup in case of a malfunction of the Poe Lock, the only
working 1,000-foot lock in place at the Soo. "The design
has been approved," Burgett said. "There is no
to fund it. There is just an immense amount work out there that's
ready to go."
losses explode in final quarter of 2008
Employment in the U.S. construction industry is hurting, but
Hardhats have plenty of company.
On Jan. 9 the Bureau of Labor Statistics reported that the
nation shed 524,000 jobs in December, capping 12 months of declining
payroll employment. The BLS figures show that the U.S. economy
lost nearly 2.6 million jobs since December 2007. Job losses
accelerated sharply in the last quarter of 2008, with an average
of 216,000 jobs lost per month over the year but an average of
510,000 lost per month in the last three months.
"As this jobs picture shows, the U.S. labor market is
deteriorating more quickly than in past recessions, and virtually
all signals indicate that the economy is no where near the bottom,"
said Heidi Shierholz of the labor-backed Economic Policy Institute.
"Since U.S. consumers are now under such strain that they
are unable to consume what the economy is able to produce, the
government is the sole remaining spender with the capacity to
bolster aggregate demand and thereby create jobs.
"It is essential that government now embrace that role
with swift action on a massive recovery package large enough
to generate sufficient jobs to prevent further increases in the
U.S. unemployment rate."
The EPI reported that the total loss of more than 1.5 million
jobs in the fourth quarter of 2008 - a 1.1% drop in employment
- the largest quarterly loss as a percentage of employment since
the first quarter of 1975.
The unemployment rate rose from 6.8% in November to 7.2% in
December, the highest rate in almost 16 years, and an increase
of 2.3 points since the recession started in December 2007, when
the unemployment rate was 4.9%. Over the past 12 months, 3.5
million workers have been added to the jobless rolls. There are
now 11.1 million unemployed workers in this country.
"As bad as the official 7.2 percent unemployment rate
is," the AFL-CIO said, "the situation for unemployed
or underemployed is actually far worse. The official unemployment
rate of 7.2 percent does not include underemployed workers and
those who are discouraged, and if they were included, analysts
estimate the U.S. unemployment rate would be 13.5 percent, up
6 percentage points from 2007."
On Jan. 7, the BLS reported that Michigan's November seasonally
adjusted jobless rate was 9.6 percent, the nation's highest.
The highest rate in November was in northeast lower Michigan
at 12.2 percent. The lowest rate was 6 percent in the Ann Arbor
few simple truths to guide the way
By John Sweeney
We all know there are tough times ahead - but 2009 gives us
a jolt of hope for the change we need. Here are 10 simple truths
to guide our work - and our elected leaders' work - every day
1) We can't fix the economy by hurting workers. Workers didn't
tank the economy. We built it. Working families are the economy.
2) Rescuing the economy will require investments - in jobs,
infrastructure, health care and more. We can't get out of a hole
this deep without building a big ladder.
3) Rebuilding our broken economy gives us the opportunity
to get it right this time. We've seen that an economy built on
debt and speculation won't work. Rampant deregulation won't work.
Corporations and anti-worker leaders have kicked the legs of
government and wages out from under the economic table. No wonder
it collapsed. Replacing the economic "legs" of family-supporting
wages and benefits and responsible rules will work.
4) We need to stop pretending that American employers can
or should compete with companies in countries that subsidize
industry, pay for workers' health care or trample labor and environmental
protections. America's employers need a level playing field created
by raising standards here and abroad, not lowering standards
in a global race to the bottom.
5) It's time for change. America voted for it. America needs
it. We demand it. For too long our country has been headed in
the wrong direction. It's time to turn around America.
6) Progressive, pro-working-family candidates won resoundingly
in the 2008 elections. If we allow a minority of Senate Republicans
to block our priorities or impose their unpopular will on the
majority, we have had our votes stolen.
7) Corporate officials who through fraud, negligence or greed
cost workers and retirees their jobs, savings, home equity and
retirement security should get jail terms, not government handouts.
8) Economic injustice and inequality are intolerable and should
not be allowed to survive this new year. The average CEO makes
$40,556 every working day, more than $10,000 over what the average
worker makes in a year. A woman earns less than 80 cents for
every dollar a man earns. African Americans' median weekly earnings
are $150 less than those of white workers; for Latinos, the difference
is $210 a week. The richest 10 percent of U.S. households have
71 percent of our wealth. Income and wealth inequality are gaping,
growing and they are tearing apart what should be one nation.
9) U.S. labor law doesn't say corporations and the government
must tolerate workers forming unions. It doesn't say corporations
and government must allow unions if after using every trick in
the books they can't stop them. The National Labor Relations
Act explicitly says this nation's policy is to encourage collective
bargaining and union representation for workers. You wouldn't
know that from seeing what corporations do-and what the government
has been allowing them to do - to workers who try to form unions
and bargain for a better life. Let's restore the law of the land
by enacting the Employee Free Choice Act.
10) America is meant to be "of the people, by the people,
for the people" - all the people, not the few. We can renew
America's promise by renewing national commitment to our founding
Back or front burner for labor's EFCA?
Organized labor's top priority certainly isn't a priority
for Republicans in Congress, and it may not be a priority for
a lot of Democrats, either.
A Jan. 2 column in the Wall Street Journal by Kimberly Strassel
said the Obama Administration has indicated to union leaders
it would first focus on fixing the economy. She wrote that Obama
or Congressional Democrats have "no intention of jumping
straight into the mother of all labor brawls."
The Employee Free Choice Act would level the playing field
for union organizers by changing federal law to allow workers
to simply sign a card indicating they desire union representation.
Such a system would supplant existing law, which allows for employers
to call for a formal election process, which can take months
Unions have long maintained that such delays allow employers
to coerce or threaten workers into shunning union representation
- a system which has seriously weakened the ability of unions
to grow. With that knowledge, the U.S. business community is
ready to spend millions in a campaign to fight the Employee Free
Choice Act. A majority of Senators voted for the EFCA last year,
but Republicans threatened a filibuster to hold up its passage,
and President Bush would have vetoed it, anyway.
That fact that the EFCA wasn't going to pass provided political
cover for what Strassel called "wobbly" Democratic
senators from anti-union Red states - especially those up for
re-election next year - who now aren't eager to see the Employee
Free Choice Act come up for a vote.
Labor leaders think those wobblies can be given a backbone
on this issue, and are looking for a vote by Labor Day on the
Plenty support for U.S. unions - poll
Sentiments in Congress may be all over the map regarding the
Employee Free Choice Act.
But a Peter Hart poll released this month found that nearly
four in five (78%) U.S. adults favor legislation that "would
make it easier for workers to bargain with their employers."
This includes nearly half (46%) of Americans who strongly
favor legislation to that end. Just 17% of adults oppose legislation
making it easier for workers to bargain with their employers
for better wages, benefits, and working conditions.
A majority (69%) of Americans agree that it is very or fairly
important to have strong laws that give employees the freedom
to make their own choice about whether to form a union in their
workplace. Half (50%) of Americans say this is very important.
The poll, according to the Huffington Post, "is meant
in part to demonstrate that contention over the bill is mostly
limited to the halls of power in Washington; among ordinary Americans,
union officials say, EFCA enjoys strong support."
Several sources indicate that labor and Democrats have been
buoyed by the ineffectiveness of anti-EFCA ad campaigns funded
by big business groups.