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March 17, 2006

Michigan Supreme Court upholds prevailing wage

Lull follows report of new trades alliance

Where the action is

GOP turnaround makes minimum wage hike likely in Michigan

Masons ready new niche for 160-year-old gang of gongers

State seeks to accelerate $320 million in road funds

News Briefs


Michigan Supreme Court upholds prevailing wage

By Marty Mulcahy
Managing Editor

LANSING - The state Supreme Court finally slammed the door on the Associated Builders and Contractors-Saginaw Valley Chapter's bulldog-like effort to overturn the Michigan Prevailing Wage Act.

The end to the six-year-old case came on Feb. 27, when the Michigan Supreme Court refused to hear any more arguments on the matter. The ABC failed to convince the state high court to overturn a ruling by the Michigan Court of Appeals from July 2005 that upheld the constitutionality of state's prevailing wage law.

"This is great news for the building trades," said Michigan Building Trades Council attorney John Canzano. "If we lost this law it would be almost impossible to get it back under the current political landscape."

The Michigan Prevailing Wage Act of 1965 requires that prevailing wages be paid to workers on construction projects involving state tax money. Generally, the prevailing wage in localities around Michigan is in line with union wage scales. Loss of the prevailing wage law would have virtually assured a downward spiral of Michigan construction workers' wages.

The case brought by the Saginaw Valley ABC had huge implications for Michigan's entire construction workforce. We've been following the case since its inception:

The ABC originally filed a lawsuit in what it expected would be an employer-friendly Midland County Circuit Court in 2000, alleging that the Prevailing Wage Act is unconstitutional under Michigan law. The Midland court gave the ABC a partial victory, but when the case first went to the Michigan Court of Appeals in August 2003, the legal panel ruled against the ABC.

The panel ruled that the prevailing wage law is not "impermissibly vague" as the ABC alleged and that the (financial) injuries sought by the ABC "are at this point merely hypothetical." The ABC also argued that state legislature was abandoning its role as rule makers by allowing the union rate to be the prevailing rate.

On Dec. 9, 2004, the Michigan Supreme Court heard arguments from attorneys for the ABC and the Michigan Building Trades Council together with the State of Michigan on whether the ABC-Saginaw Valley Area Chapter had the legal standing to go to the courts to challenge the legality of the state's prevailing law.

The high court did rule that the ABC had legal standing and was affected by the law. However, on the issue of whether the Prevailing Wage Act is unconstitutional, the court sent the case back to the Court of Appeals for a ruling.
On July 19, 2005, a three-judge panel of the Michigan Court of Appeals upheld the statute. The court unanimously disagreed with the ABC's contention that the state's prevailing wage law is unconstitutional. The appellate court cited state legal precedent and stated: "Having considered the merits . . . we conclude that the PWA does not unconstitutionally delegate legislative authority to private parties, and . . . that the PWA is not unconstitutionally vague…."

In issuing a statement on this case, Michigan Appeals Court judge William Whitbeck wrote: "…Since 1972 there have been 13 proposed amendments to exempt certain projects from the Prevailing Wage Act. During the same time period there have been 10 attempts to repeal the act. However, no proposed amendment, or repeal of the act has passed.

"In essence, the Saginaw ABC invites us to do what the legislature has refused to do: repeal the Prevailing Wage Act. As is clear from the majority opinion, today we have declined that invitation."

On Feb. 27, the Michigan Supreme Court agreed, and curtly ruled in a single paragraph that "we are not persuaded that the questions presented should be reviewed by this court."

In other words, case closed, at least for now. The Michigan Supreme Court is widely viewed as tilting well into the conservative side - but Canzano said in this case, "they followed the law, and we gave them a lot of good reasons to do so."


Lull follows report of new trades alliance

A relative calm after the storm seemed to follow the bombshell Feb. 14 announcement that six international unions would form a new group, the National Construction Alliance.

The six unions - the Laborers, Operating Engineers, Carpenters, Teamsters, Bricklayers and Allied Craftworkers and Iron Workers - announced they would establish a new labor federation, the National Construction Alliance, effective March 1. The BAC and the Iron Workers have said they would also remain in the AFL-CIO Building Trades Department.

"Here in Michigan, in checking with our affiliates, we haven't heard or seen much about the split from our international unions," said Patrick Devlin, secretary-treasurer of the Michigan Building and Construction Trades Council. "We're maintaining a business-as-usual stance, and that's what they're doing in other big building trades councils that we've checked with around the country.

"We will be having a meeting April 10-11 with all affiliate unions in Michigan to plot a future course."

Established in 1908, the Building Trades Department had operated as the umbrella group for all construction craft unions - until recent years. The Carpenters were the first to bolt from the department in a dispute over how their dues money was being spent on organizing.

Presidents of the Operating Engineers and the Laborers, who have led the latest break, said in a statement that "we must - and we will - pursue a course of action that best serves the interests of our members, our local unions and the construction industry in which we work."

Laborers President Terrence O'Sullivan and Operating Engineers President Vincent Giblin said in a joint statement that "persistent and lengthy attempts to reform the AFL-CIO Building and Construction Trades Department were not successful." They said needed reforms included changing the Building Trades Department's governance structure and changing jurisdictional rule, because they no longer reflect today's construction industry and "hurt union contractors."

Building Trades Department President Edward Sullivan defended the group he leads, and criticized Giblin and O'Sullivan for not attending Governing Board of Presidents meetings "in many months." He said "although we regret the departure of any union in a time when solidarity has never been more critical, we think they are making a mistake for their unions and for our industry."

According to Workday Minnesota, the National Construction Alliance will incorporate four key reforms that were rejected by the Building Trades Department:
1. Weighted voting, giving unions that have more members more influence.
2. Changes in the methods for resolving jurisdictional disputes.
3. A streamlined budget and more effective use of staff.
4. An executive director to head the organization - instead of an elected president

Both general presidents pledged to provide more details on the new alliance "within weeks."

According to the Construction Labor Report, the Laborers and the Operating Engineers represent about 1.1 million members, with 625,000 of them on construction job sites. In all, the new alliance would represent about 2 million building trades workers. According to the U.S. Bureau of Labor statistics, there were just over 8 million unionized construction workers in the U.S. in 2005.


Where the action is

Construction is progressing at the new MGM Grand Casino, which makes a considerable, 25-acre footprint on the west side of downtown Detroit.

Plans for the $275 million project include a casino with 100,000 square-feet of gaming space, a 17-story, 400-room hotel, convention space, and a 3,500-space parking deck. Construction began last fall and is expected to wrap up in early 2008.

The complex will feature retail, 100,000 square feet of gaming space, a bingo hall, a spa and pool, conference space, a 5,625-space parking garage, and restaurants. The site is located just northeast of the intersection of the Lodge and I-75 freeways between Third and Bagley avenues.

Structural steel is quickly going up on the project, which has also become a welcome parking lot for cranes, both fixed and mobile.

The MGM is building its new complex a few blocks from its "temporary" casino, which was built in a remodeled office building along the Lodge freeway.

Photo by Don Coles/ Great Lakes Aerial & Legal Photos



GOP turnaround makes minimum wage hike likely in Michigan

LANSING - The circulation of petitions asking Michigan voters to approve an increase in the state's minimum wage prompted state Republicans - surprisingly - to reconsider their long opposition to the matter.

On March 9, the Republican-led Michigan Senate raised the state's collective eyebrows by voting unanimously to raise the minimum wage from $5.15 per hour to 6.95 per hour on Oct. 1. Another increase would bring it to $7.15 on July 1, 2007, and another to $7.40 on July 1, 2008.

The Republican-led Michigan House was also expected to approve the plan, and Gov. Jennifer Granholm pledged to sign the bill if it comes to her desk.

No less than six Democrat-sponsored bills that would have raised the wage have languished without action this year, and Republicans had not shown any inclination for budging on increasing the minimum wage.

"We have repeatedly called for an increase in the state's minimum wage, and today we are one step closer to raising the wages paid to tens of thousands of workers in this state," Granholm said. "It's a simple matter of fairness - anyone who puts in a fair day's work should receive a fair day's pay."

The Michigan AFL-CIO-led "Michigan Needs a Raise" coalition was the driving force behind the higher minimum wage effort. The labor federation has been pushing to get 320,000 petition signatures to raise the minimum wage to $6.85 per hour, and index future increases to the inflation rate. Polls show Michigan voters support a minimum wage increase by a 4-1 margin.

Top Republicans and chambers of commerce leaders effectively said this bill was the lesser of two "evils" - raising the wage now vs. having Michigan's minimum wage increases permanently placed in the state Constitution, which the ballot issue would do.

"This is a fair and workable approach," said Senate Majority Leader Ken Sikkema, R-Wyoming to The Detroit News. "It will provide a sensible wage hike to workers while at the same time insuring that Michigan job providers are not saddled with onerous job-killing provisions that are being pushed by supporters of a constitutional amendment."

Michigan AFL-CIO President Mark Gaffney said the bill had less to do with Republican generosity to low-paid workers than with Republican election-year scheming.

"It was a political decision on the part of Republicans," said Mark Gaffney. "This is an attempt to try and keep this issue out of the November election."

Gaffney said union leaders are still discussing whether to keep up with the work-intensive - and potentially expensive - effort to gather signatures and place the minimum wage increase issue on the November ballot. He said this minimum wage measure doesn't help tipped employees, doesn't help farm and disabled workers because of an arcane law currently on the books, won't stop the legislature from reducing the minimum wage or halting increases whenever they want, and does not automatically increase the wage when the inflation rate goes up.


Masons ready new niche for 160-year-old gang of gongers

Since 1931, Gog and Mogog have gonged on the quarter hour atop the Sir John Bennett clock tower at Greenfield Village, an attraction so popular that rows of benches were placed across the street to allow visitors to take a break and watch the action.

The two human-sized figures form the major elements of the clockworks, which once tolled above the Sir John Bennett Jewelry Shop in London, England from 1846 to 1929. When Greenfield Village founder Henry Ford had the building imported to Dearborn, the five-story building was trimmed down to two levels, and the masonry on the front of the building was redesigned to house the clockwork figures.

Seventy-five years later, the masonry above Gog and Mogog, predominately the sandstone, is showing its age. Some wooden beams in the building were also rotten by water incursion. Earlier this month, the beams had been replaced, and the masonry was being torn out, to be replaced by sandstone from the same quarry in England which produced the original building material. Restoration contractor Grunwell-Cashero and a group of BAC Local 1 masons were removing the sandstone, and will set the new stones next month.

"Some of the stone was in pretty rough shape," said Ed Raymond, the project's foreman for Grunwell-Cashero. "There are different types of sandstone, and some wears away faster than others." He estimated that 60-70 pieces of various size stones are being replaced. He said the masonry joints, which typically are the first areas to fail, and the copper straps, which hold the stone in place, were in surprisingly good condition atop the building.

Acid rain might be the culprit in the deterioration of the masonry.

"The joints are still really tight," Raymond said. "A lot of craftsmanship went into the building. With all the new stuff and veneer they're using today, it's awesome to be able to get to work on something like this."

Using lasers, a contractor measured the masonry atop the building to aid in creating forms that will be used to cut the replacement sections.

Jim Johnson, senior manager of creative programs for Greenfield Village, said Henry Ford had a tremendous interest in clocks, and he had agents around the world looking for them to add to his collection. In the 1920s, the John Bennett shop in London was vacated and put up for sale. One of Ford's agents learned the building was on the market, and Ford purchased the structure, had it disassembled and then shipped to Greenfield Village, where it was modified and reconstructed.

The quartet of gongers have provided faithful service since they were relocated. At 15 minutes on the hour, the clock's mechanisms prompt Gog and Magog and two other figures to strike their bells, and they play a portion of the Westminster Chime. They gong the full tune at the top of each hour. Until recently, Johnson said the building's clockworks had to be wound manually, twice a day, like an old grandfather clock. "I used to work in the building, and you could feel the clock ticking," he said. "And when they hit the bells, the whole building shook."

In recent years, an electric motor replaced the original clock works.

Johnson said over the years budgetary constraints prevented the village from performing proper maintenance on the masonry and on the wooden Gog and Mogog figures, but they're now getting the attention they deserve.

In 2004, The Henry Ford started the largest capital campaign in the institution's 75-year history, unveiling a $155 million effort to restore and revitalize numerous holdings of the Henry Ford Museum and Greenfield Village, including the John Bennett building.

McKay Lodge Conservation Laboratory, Inc. has been contracted to perform the renovations on Gog and Mogog, which they said "have serious deterioration." They are said to be "of glued constructions of carved wood, painted in many bright colors." Next to them are two other figures, representing Father Time and a guardian angel. They were constructed of gilded plaster on concrete bases and are "severely weathered," conservators said. Each has a gilded metal arm that strikes a bronze bell.

Four bronze bells, the largest weighing about 1000 pounds, are also being treated. They will all resume their perch when the masonry renovations are complete at the end of April. The building will also resume its function as a candy store.

According to Johnson, Gog and Magog were mythical 12th Century figures who were patron saints of guild halls in England, and eventually became "protectors" of the British Isles. "It's kind of fitting that tradesmen are doing the work to restore the building, since Gog and Mogog were the patron saints of tradesmen in England," he said.

THE FIGURES OF Gog, Magog, Father Time and a guardian angel, as well as their enclosure, are being renovated. Greenfield Village photo

TAKING A BREAK in front of the Sir John Bennett Clock Tower at Greenfield Village in Dearborn are Darryl Kwiek, Ed Raymond and Ken Hamblin of BAC Local 1 and Grunwell-Cashero.


State seeks to accelerate $320 million in road funds

LANSING -The Michigan Department of Transportation (MDOT) and Gov. Jennifer Granholm on March 7 announced a new plan to speed up local transportation projects across the state, putting more Hardhats to work sooner.

The "Local Jobs Today" plan will provide grants and loans to cities, counties, and local transit agencies to allow them to take advantage of available federal transportation funding and create more than 7,100 jobs in Michigan in 2006 and 2007. The construction industry will be the primary beneficiary.

"This Local Jobs Today plan can help cities, counties, and local transit agencies across Michigan put federal transportation dollars to work in their communities," said Gov. Jennifer Granholm.. "By giving counties and cities the opportunity to accelerate critical local road, bridge, and transit projects, we will be able to create thousands of jobs for Michigan residents this year."

Local Jobs Today will offer a combination of short-term and long-term grants to local agencies throughout the state. Sen. Michael Prusi has sponsored a bill that will amend a portion of the transportation funding law to allow the state to issue the bonds for the local transportation grants and loans:

  • Under the Local Federal Fund Program, $80 million of the State Transportation Fund (STF) monies will be used to provide the 20 percent match for local projects required for federal funding. This will leverage $320 million in local federal funds. The state will fund the program by issuing bonds to be repaid with future STF funds.
  • Under the Advanced Construct Local Loan Program, the state will issue short-term notes, backed by the STF, to accelerate the use of federal transportation dollars by creating a pool of funds local agencies can borrow from to construct federally eligible or designated local projects. These loans will be paid back with expected federal revenues coming to Michigan for local projects over the next three years. Local agencies will be responsible for paying back interest on the short-term loans. Cities, counties, and local transit agencies must be able to identify sufficient total funding to complete the projects and bear any additional costs, including overruns.
  • Grants to provide match dollars on local transit projects - equal to their 20 percent federal match requirement - will be made out of available Comprehensive Transportation Fund money.

"Michigan's local road and transit systems are an integral part of our transportation infrastructure," Prusi said. "This program is designed to provide local agencies the resources necessary to make much needed improvements."

The Michigan legislature must pass Prusi's legislation to allow local governments to have shovels in the ground by this spring. MDOT will review the list to ensure that projects meet Local Jobs Today criteria and comply with federal funding requirements.


News Briefs

Status quo for construction pay
Pay and benefit increases in the U.S. organized construction industry are expected to continue at a pace similar to the past two years.

A 2006 outlook report released last month by the Construction Labor Research Council did not predict percentage increases, but CLRC Executive Director Robert Gasperow told the Construction Labor Report that increases in existing agreements are good indicators for the future.

The CLRC found that in existing contracts across the U.S., pay/benefit increases for 2006 average $1.68 per hour or 3.9 percent. For 2007, the average increase is $1.73, and also 3.9 percent. Average construction industry first-year settlements in 2005 were $1.53, at 3.9 percent.

In recent years, the CLRC said average U.S. pay/benefit increases have been $1.50.

Asbestos bill won't fly without support
U.S. Senate Majority Leader Bill Frist said on Feb. 17 that he won't place an asbestos bill up for a vote unless 60 senators sign a letter indicating their support.

"Once that public assurance is given, I will look to schedule the bill at the earliest possible opportunity," said Frist, a Tennessee Republican, said in a statement.

The controversial legislation would take asbestos injury claims out of the courts and pay them instead from a $140 billion fund financed by asbestos defendant companies and their insurers.

The bill lost in a 58-41 Senate vote on Feb. 14, but Frist used a procedural move to keep his options open for reintroducing the measure.

Supporters and detractors of the bi-partisan bill are all over the map. Some labor groups support it, others don't. Same with Republicans and Democrats. Congress has
struggled for years to come up with a compromise money package that will help asbestos-affected workers - including thousands of construction Hardhats - while keeping a lid on costs and not sending more asbestos-related companies into bankruptcy.

Construction up, but not in Michigan
Predictions for a robust year for U.S. construction seem to be on track in 2006, with an Associated General Contractors economist calling industry gains this year "well distributed across industry segments and regions."

"Construction again led the employment report in February with a gain of 41,000 jobs, one-fifth of all private-sector jobs added during the month," said AGC Chief Economist Ken Simonson, commenting March 10 on seasonally adjusted jobs figures released by the Bureau of Labor Statistics (BLS).

"This is just the latest in a long string of employment gains," he added. "Since February 2005, construction employment has risen by 346,000, or 4.7 percent - triple the overall growth rate for nonfarm payroll jobs.

On a statewide basis, from January 2005 to January 2006, BLS figures show that construction employment rose in 46 states and was unchanged in another. In Connecticut, Louisiana and Michigan, construction employment dropped during that period.


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