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July 11, 2003

Repeal prevailing wage? Any savings 'likely to be small,' researcher says

Two firms slammed for 'willful disregard of worker safety' after Ford Field fatality

Inspiring work by masons working at Islamic Center

Health care dilemma highlights ABC's various shortcomings

'This bill is horrible' Trades won't breathe easier under asbestos plan

New use for old NMU fieldhouse



Repeal prevailing wage? Any savings 'likely to be small,' researcher says

LANSING - A coalition of statewide union construction industry organizations recently organized their first-ever prevailing wage orientation session for state legislators entitled, "Don't be fooled by the newest shell game in town" to deliver the facts surrounding the current debate over the merits of Michigan's prevailing wage law.

The session was conducted by Dr. Dale Belman, associate professor with Michigan State University's School of Labor and Industrial Relations.

"Any immediate savings from the repeal of prevailing wage to the State of Michigan is likely to be small," Belman said. "But the long-term cost to Michigan taxpayers in terms of higher maintenance costs, medical expenses for uninsured workers and having a less-skilled, less productive workforce take away the advantages of any savings."

This prevailing wage orientation session highlighted the positive aspects of Michigan's prevailing wage policy, which is frequently a part of budgeting discussions.

This session was built on a highly successful prevailing wage orientation seminar in 1999. Led by the Michigan Building Trades Council, that seminar brought in prevailing wage researchers to Lansing and received national attention in a leading construction industry newsletter as "textbook" example of the right way to bring the issue before legislators.

In organizing this year's session, several union construction industry organizations communicated to Michigan legislators that the state's prevailing wage law works. Legislators need to hear this message regularly because of the high turnover among lawmakers, brought on by term limits.

"On a net basis, repeal of the prevailing wage law is likely to cost the state rather than save revenue," said Mike Crawford, executive director of the National Electrical Contractors Association - Michigan Chapter. "Professor Belman's careful analysis suggests that repeal of Michigan's prevailing wage law would be a textbook example of an ill-considered policy."

Enacted in 1965, Michigan's prevailing wage law (Public Act 166) states that state-funded construction projects are required to pay prevailing wage and fringe benefit rates. Prevailing wage rates are the average hourly rates of pay provided to different classifications of building trades workers in a particular region.

Bellman began the session by presenting academic research derived from a variety of economic studies from several states. His own analysis of that research revealed that if Michigan's prevailing wage law were repealed, direct cost savings resulting from repeal would fall between zero percent and 3.4 percent, and will most likely fall within the bottom of that range.

Bellman presented other statistical analyses that support the institution of prevailing wage laws, such as:

  • A study that found federal Davis-Bacon wage rates exceed average wages by four percent on commercial construction. If labor costs accounted for 35 percent of construction costs, this would result in an overall construction-cost increase of only 1.4 percent on commercial projects.
  • A study by Armaund Thieblot, a well-known opponent of prevailing wage laws, which found that repeal of Michigan's prevailing wage law would reduce construction costs by only 0.6 percent.
  • A study by Cihan Bilginsoy of Economic Inquiry found that repeal of British Columbia's prevailing wage law resulted in higher rather than lower school construction costs.
  • Professor Peter Phillips and his associates at the University of Utah have conducted a number of studies concerning the effect of prevailing wage laws on the costs of public construction, including such costs in Ohio, Michigan and Kentucky. None of these studies found that prevailing wage laws increased the costs of construction.

"Most savings claims," Phillips said, "can't stand up to scrutiny."

Contrast the above studies with a report from the conservative Mackinac Center for Public Policy, which claims that repealing Michigan's prevailing wage law would result in $421 million - or 10 percent - in construction cost savings to the state. But they offer little hard evidence.

The simplistic Mackinac Center study also made the wild claim that when a federal court invalidated Michigan's prevailing wage law for a 30-month period beginning in December 1994, "more than 11,000 new jobs were created as a consequence of the law's invalidation." The Mackinac Center failed to mention that one of the greatest economic booms in our nation's history was also taking place during that time.

Prevailing wage repeal efforts also usually fail to take into account the increased efficiency of higher-paid, higher-skilled workers, increased maintenance costs brought on by lower-quality work, the cost to society in terms of the greater number of uninsured workers, and the shifting of training costs to the public sector.


Two firms slammed for 'willful disregard of worker safety' after Ford Field fatality

The horrific death of painter Gjon Gojcac at Ford Field nearly a year ago resulted in penalties and citations totaling more than a half-million dollars against two companies that were the subject of a MIOSHA investigation.

Both companies, we learned last week, are appealing the fines.

On July 30, 2002, Thomarios Painting Co. painter Gjon Gojcaj was in a Condor lift and was painting trusses more than 120 feet above the surface on the east side of the stadium. At about 10:15 a.m., according to MIOSHA, an outrigger of the Condor lifted off the ground and the lift fell to the east, landing in the lower concrete seating area and fatally injuring Gojcaj, a father of five.

At the conclusion of the state investigation, Michigan Department of Consumer and Industry Services (CIS) Director David C. Hollister announced citations and penalties against Brockman Equipment, Inc. for $286,000, and Thomarios Painting for $270,000. The CIS Bureau of Safety and Regulation is responsible for administering the Michigan Occupational Safety and Health Act (MIOSHA).

Thomarios Painting was a subcontractor on the Lions' Ford Field stadium construction site. Brockman Equipment, Inc. rented two aerial lifts to Thomarios, including the Condor 150S aerial work platform with an articulating and extensible boom.

"Ford Field is a shining gem for the Detroit Lions and for the City of Detroit. It saddens us deeply that its construction legacy includes the death of worker Gjon Gojcaj," said Governor Jennifer M. Granholm. "This needless tragedy could have been avoided if either company had fulfilled their safety and health responsibilities."

According to MIOSHA, while Gojcaj was painting the trusses on the morning of July 30, a Thomarios foreman and a Hunt/Jenkins (general contractor) concrete superintendent were discussing the use of mats under the Condor's outriggers. During their conversation, both men observed one of the Condor's rear outriggers raise approximately 10 inches off the surface. The MIOSHA report said this presented "an imminent danger" for the painter on the Condor work platform. Based on the MIOSHA General Duty clause, at this point the foreman should have stopped all operations and attempted an immediate rescue of the worker.

Instead, according to MIOSHA, the foreman told Gojcaj to finish what he was doing, and then come down slowly and get ready for the next move. The concrete superintendent recognized that the outrigger movement didn't look right, and was in the process of contacting Hunt/Jenkins management when the Condor fell.

MIOSHA, which hired an engineering firm to examine the lift, said its investigation revealed that a combination of instability, mechanical problems, and an inadequately trained operator were factors that "may have contributed" to the fall of the Condor.

MIOSHA interviews indicated that employees received almost no training in the operation of the Condor. Employees were not trained in the instability warning system, which is an electronic system that alerts the operator when an operation is approaching an unstable condition. MIOSHA interviews indicated that this system was not functioning on the lift at the time of the accident, and no outrigger alarm sounded on the ground or in the platform. Because workers weren't trained in this system, MIOSHA said, they were unaware it was not functioning properly.

Interviews by the safety agency also indicated that employees assumed the Condor would stop if an unsafe or unstable condition was reached, like newer models do - which was not the case with the Condor.

The Condor was delivered to Ford Field three days before it fell. MIOSHA found there were mechanical problems with the lift - on the night previous to the July 30 fatality, a hydraulic pump was replaced.

A total of nine willful violations are alleged against the two companies - five against Thomarios Painting and four against Brockman Equipment. "Both companies were aware of the hazardous conditions involved in painting the trusses - and yet they willfully placed these workers in harm's way with a pattern of indifference for their safety," said a MIOSHA press release.

Thomarios was cited for a willful violation of the MIOSHA General Duty clause for failure to protect their worker from a hazardous condition and a willful citation for failure to have operators perform a pre-operation inspection. Brockman received a willful citation for failure to inspect and maintain the aerial lift platform. Both companies received three willful citations for: inadequate training, no manuals provided, and missing warning decals/stickers.

Because of the complexity and expense of the aerial lift, MIOSHA said Brockman Equipment supplied an operator with the rental of the Condor. The operator was responsible for driving the truck chassis, making mechanical repairs, and training all the painters who would be working from and operating the platform. The MIOSHA investigation revealed that workers received almost no training on the operation of the Condor and especially on possible hazards and warning signs.

"Operator training is critical for the safe operation of equipment with such inherent hazards," MIOSHA said. "Neither company fulfilled their obligation to assure operators were adequately trained. The lack of a manual and warning decals/stickers were equally important because both contained crucial warnings of hazards that could cause serious injury and even death, and yet were not available to the workers."

Thomarios received a total of 14 citations resulting from the incident, and Brockman received a total of 10 citations, for alleged safety violations.

"It became apparent from our MIOSHA investigation that each of these two companies abrogated their own safety and health responsibilities and relied on the other company to protect the workers," said CIS Director Hollister. "These citations today send a clear message that in a situation involving multiple companies - every company will be held accountable for the willful disregard of worker safety and health."


Inspiring work by masons working at Islamic Center

The Islamic Center of America mosque in Dearborn is beset by a shortage of money to complete the $15 project - but fortunately there was no shortage of talent among the union masons who completed the exterior of the building.

"It's a stunning project, and we have certainly never done anything like it," said Ned Niemi of Davenport Masonry. "The owner was very meticulous with very high standards. Our people did a very nice job."

Niemi said a small crew of about 10 masons wrapped up the brick and tile work on the project last month after being on the job on and off for more than two years. The Islamic Center is short on funds to complete the project, so construction crews have been hired as money has been made available.

The Islamic Center, currently located in Detroit, is inadequate for the group's needs. The mosque is part of a 120,000-square-foot complex at the site, including a Muslim American Youth Academy, the mosque, an auditorium, library and community center.

A GROUP of Bricklayers and Allied Craftworkers Local 1 members, working for Davenport Masonry, gather on the scaffolding on one of the spires they're constructing at the Islamic Center of America.



Health care dilemma highlights ABC's various shortcomings

Tradesman Viewpoint

Around this time every year, we learn a little bit about what's on the plate for the coming year for the anti-union Associated Builders and Contractors after they conduct their annual legislative conference.

Usually, their number one legislative priority revolves around putting the screws to both union and their own nonunion workers by seeking to eliminate the federal prevailing wage law, removing project labor agreements, or electing Republican lawmakers to do their bidding. (Although in 2000, they deviated from their script by making the elimination of state prevailing wage laws their number one priority). But we digress.

So it was with interest we saw in the Construction Labor Report that the ABC is taking on a new "number one priority" this year: passing legislation that would allow trade associations to provide more affordable health insurance for their small business members through group purchasing.

By making this issue its priority, is the ABC turning over a new leaf, and seeking to improve health care and the quality of life for its contractors' employees?


According to the ABC's chairman, Edward Rispone, such legislation would allow trade associations to negotiate better insurance rates for smaller companies, to allow them to hold onto their better workers who may be lured away by larger companies that are in a better position to provide health care benefits.

Of course, there was no mention of how such legislation would also make it easier for small nonunion companies to compete benefit-wise with union employers, who can lure workers away by offering vastly better health and retirement plans.

On the surface the plan sounds positive, and may prove to be a boon to union employers, too. But essentially, this is a competition issue, and it's another example of the ABC having to go to the government to shore up the inadequacies of its member-contractors. For example:

  • The ABC can't match the money unions spend on training, so the contractor group seeks to siphon government funds in their training programs wherever possible. Union training funds never take a dime in government funding.
  • What the ABC lacks in worker skill and training on the job site, it makes up using excellent lobbying and public relations efforts. ABC contractors have difficulty competing for jobs on a level playing field when workers are paid the same prevailing rate - so they fight prevailing wage laws tooth and nail.
  • The ABC is always johnny-on-the-spot with brochures, literature and letters to the editor whenever project labor agreements or prevailing wage issues come up in local communities. But as we pointed out in a series of articles last year, when you get past the public relations machine, fully 45 percent of the ABC's membership roster consists of non-building companies like janitorial services and restaurants.

They do their share of work - but their claim that they are "now building 75 percent of all construction in this country" is laughable.

Three years ago, one nonunion construction firm leader gave lip service to improving the pay of nonunion workers. "If low pay was a felony, I think most of us would be on death row today," said Franklin J. Yancey, a former senior vice president at Kellogg Brown & Root, Houston, one of the nation's largest nonunion construction employers. "Today, we do not have craftsmen, we do not have apprentices, we have poor people."

Those comments didn't change any attitudes. Nonunion construction employers continue to underpay their workforce. Health and retirement benefits continue to lag behind those in the union sector. And now, when the ABC comes up with a plan to lower health care costs for its small employers, you just know that the only reason they're doing it is to improve the bottom line of their contractors, not improve the lot of workers.

Workers continue to be an afterthought with the ABC. Always have been; always will be.


'This bill is horrible' Trades won't breathe easier under asbestos plan

Editor's note: For months, the labor movement, the business community, and Democrats and Republicans in Congress have been wrangling over streamlining the asbestosis litigation process through the creation of a trust fund to aid 1.8 million victims of asbestos-related disease. The process is coming to a head with the proposed establishment of a $108 billion trust fund to pay victims injured by asbestos, thousands of whom are building trades workers.

By Lane A. Clack
Goldberg, Persky, Jennings & White, P.C

A bill to end lawsuits by asbestos-exposure victims is being railroaded through the Senate Judiciary Committee by Republican Sen. Orrin Hatch. If enacted by the full U.S. Senate, then passed by the U.S. House, this law supported by Vice President Dick Cheney and President Bush, will end asbestos victims' right to trial by jury, including cases already filed in the court system.

If the bill passes the overwhelming majority of building trades workers we represent will get zilch ($0) under the bill. The Senate Judiciary Committee is scheduled to vote on the bill on July 10. The national AFL-CIO has been pushing this bill, but it is devastating to the vast majority of workers who currently receive money. I know that the AFL-CIO is well-intentioned, but this bill is horrible - it will significantly hurt the workers. I don't think people appreciate that the bill will do the following:

1. Most asbestos victims with non-malignant disease who have historically been receiving payments will get nothing. In fact, the vast majority of building trades workers we currently represent will receive nothing more than the right to have an x-ray every three years. These, of course, are the building trade workers referred to us by the unions and who have documented asbestos scarring in their lungs.

2. There are approximately 250,000-300,000 pending asbestos claims. Each of these claims will have to be filed in the new bureaucracy created by the Act. Only a certain limited amount of money can be paid each year. Based on past experience with bankruptcy trusts literally years will pass before any claims are paid. Claims will actually be delayed under this system.

3. All existing settlements will be wiped out. We have, for example, major settlements with Halliburton and Honeywell which affect building trades workers. These settlements will be forfeited under the act. In fact, the company once headed by Vice President Cheney, Halliburton, will end up paying about 17% of the amount they just negotiated nationwide to settle all asbestos claims - which is why Halliburton is so much in favor of this legislation.

4. There is about $25-$28 billion dollars in bankruptcy trusts that are in the process of being finalized. These trusts will be wiped out. Many building trade workers would have qualified under the terms of these trusts, but will not qualify under the Hatch Act.

5. The values are simply inadequate. The people with the most serious disease are totally capped - which they are not under the current system. The people on the lower end receive nothing, although presently they receive money in the tort system. Most lung cancer cases involve some amount of smoking, but the payments to this class of victims is nominal or $0.

In short, the act will eliminate whole categories of building trade workers who presently receive money, will reduce payments to others, will deprive victims of settlements already negotiated and will deprive them of the right to file claims against the bankrupt companies. I personally do not believe that much of the money will actually be spent under the act because it allows so many ways to deny claims and limits the classes to whom payments must be made.

Under the Act, the administrator determines whether the money actually needs to be spent. We will have a large bureaucracy devoted to making sure that the annual payment limit is not overshot. And for this the workers agree to give up their constitutional right to a jury trial and to payments they have historically been entitled to under the judicial system. The national AFL-CIO needs to hear from you. If union labor stands together the Hatch bill can be defeated.

Please contact AFL-CIO head John Sweeney immediately, let him know you oppose the bill!

815 16th Street, NW
Washington, D.C 20006
Fax: 202-637-5058


New use for old NMU fieldhouse

MARQUETTE - Tom Izzo's old basketball court stomping ground is being turned into office space.

Renovations are ongoing to transform the 130,000-square-foot Northern Michigan University's Hedgecock Fieldhouse into a multi-story student service facility, including a 350-seat recital hall, atrium, office space, and an above-ground, enclosed walkway connecting to an existing building.

General contractor Devere Construction and the building trades have been on the $11 million project since April 1, and are wrapping up demolition and raising of the roof over the gym to allow for the construction of a third story.

Constructed in 1956, Hedgecock has slowly been abandoned over the years. A new activities building for hockey and basketball was built a few years ago, which sealed the building's fate.

The basketball team's most famous player was Michigan State University head basketball coach Tom Izzo, who played guard on NMU's hoop squad and was voted the team's MVP as a senior in 1977. He was also named to the Division II All American Third Team that year.

But the basketball court and other facilities in the Hedgecock Fieldhouse are long-gone. "We're gutting the old building to the bare bones," said Devere Project Supt. Keith. "We have about 30 tradespeople working here and they're doing a great job." The project is expected to be completed next summer.

THE OLD NMU Hedgecock Fieldhouse (above) is being renovated through the efforts of Ron Midle of Laborers Local 1329 and fitters Paul Tembreull and Jim Polich of UA Local 506 (below).




Wage survey needs help from contractors
The building trades are knee-deep in the effort to help the U.S. Department of Labor get an accurate assessment of prevailing wage rates across Michigan.

But not surprisingly, they could use more effort from the contractor community.

A committee of building trades representatives and contractor associations have sent out 8,500 information packets to all signatory contractors throughout the state. Follow-up efforts will try to make sure contractors accurately fill out wage and benefit information on the forms, in an effort to make sure that union wage rates are as "prevailing" as possible.

Ed Hartfield, who is leading the effort on behalf of the Operating Engineers Local 324 Labor-Management Committee, said each packet contains an explanation of the survey, a sample wage and benefit form, instructions, and contact information.

Hartfield said a call center has been set up to answer questions from union and contractor reps, and meetings have been held with building trades councils and contractor groups around the state to maximize participation.

"We're using every means available to get the word out," Hartfield said. "At the moment, we're not getting the level of participation we'd like to see from the contractors in terms of completed forms, but we're working at it." From day one, organizers of this effort have expected contractor participation to be the weak link in this effort - mainly because they don't want to allocate personnel to the effort.

The reason for all this activity: The U.S. Department of Labor is conducting the first-ever intensive survey of prevailing wage rates in Michigan in 2003. The building trades began efforts early this year to coordinate and maximize responses from union contractors, because those higher wage rates will be used as the basis for wages on state and federal projects in various trade classifications for years to come.

Contractors often rely upon the prevailing wage rates published by the DOL in assembling their bids for projects. Having DOL prevailing wage rates that properly reflect union wage and fringe benefit levels not only puts money in the pockets of unionized building trades workers on state and federal jobs, it helps to assure that union wages and fringes will be the basis for all bids on those jobs, by union and nonunion contractors.

Now, Bush targets white collar OT
The Bush Administration seems to love the idea of cutting overtime for business.

Last month, the "Family Time Flexibility Act" was introduced in the U.S. House, which would have allowed employers to give workers compensatory time off in place of time-and-a-half pay for every overtime hour worked. The problem is, employers would have the ultimate say on when employees could take their comp time.

Organized labor managed to quash that bill, for now. But now comes another proposal from Bush, which would make thousands of white-collar workers ineligible for time-and-a-half pay after they work 40 hours a week. The rules don't require approval by Congress, and clear up the murky federal rules governing overtime. The new rules would affect workers who make more than $65,000 per year.

Mark Wilson, a Labor Department spokesman, told the Wall Street Journal that workers who make more than $65,000 a year are already well paid and should expect to work long hours.


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