March 30, 2007
Chasing low wages
won't fix what ails Michigan
pension funding improves, mostly
Pension watchdog a
adds to Grand Rapids skyline
to be dedicated April 19
the air handlers
low wages won't fix what ails Michigan
By Mark Gaffney
Michigan AFL-CIO President
Labor union members in Michigan find themselves injected into
a debate about how to fix Michigan's economy and make our state
Some voices suggest that there are too many union members.
These voices say unions are too strong, and our wages and benefits
make our employers uncompetitive. These comments lead to suggestions
to cut workers' benefits and pass legislation such as right-to-work
laws, which reduce wages and weaken collective bargaining.
Let me ask a few questions. First, compete with whom? The
Chinese manufacturing worker who makes between 39 cents and 80
cents an hour and has no benefits? The jobs lost to Chinese manufacturing
are not due only to uncompetitive wages. We simply cannot expect
our American workers to work for 39 cents an hour.
Jobs lost to China are caused by greed and a lack of American
industrial policy. Blaming wages and labor costs alone is too
simple of an answer.
Who are the American consumers who fuel more than 60 percent
of our economy? They are largely middle-class workers. Reducing
workers' ability to spend in our economy and reducing workers'
ability to be consumers cannot be an overall good thing.
Reducing or eliminating pensions and retiree health care coverage
tends to make paupers out of the retired, formerly robust consumers.
There is a line that we must not cross in our economy. If
the middle class is forced to reduce its discretionary spending
below a level that helps grow our national economy, consumer
spending then decreases to a point that actually slows the overall
economic activity. A recession would result.
Why are certain Michigan proponents calling for weaker unions?
States without much union density, so-called right-to-work states,
have median household incomes of $6,000 less than states like
Michigan, according to the Economic Policy Institute. Less money
for families, more profits for business.
Union-organized states have more of their citizens covered
by health insurance (16.1 percent compared with 13.4 percent).
Again, more out-of-pocket costs by individuals, more savings
and profits for their employers. Those calling for weaker unions
have a vested interest, that of putting more coins into their
Would workers feel safer in a state without strong unions?
They shouldn't. In 2004, the rate of workplace fatalities was
41 percent higher in right-to-work states. In nonunion coal mines
last year, a miner was almost 10 times more likely to die if
he or she was not in a union. Last year, 42 out of 47 American
coal miner deaths were in nonunion mines.
Does union membership and high union density make workers
in a state like Michigan the only ones who suffer from cheap
competition? Not necessarily.
The furniture, manufacturing and textile industry in North
Carolina, a state with only a few union members, has lost well
more than 200,000 jobs since the passage of the North American
Free Trade Agreement. Do high rates of unionization make companies
leave their home states? Not necessarily.
Two major Michigan corporations have announced their relocation
outside of Michigan. Neither of the companies, Pfizer nor Comerica,
were unionized companies. Wages were not an issue. Unionization
was not an issue.
Families need adequate income to have a high quality of life.
Trying to reduce our way to prosperity by cutting wages and benefits
and weakening unions just doesn't work. Michigan's most recent
plant closing is Pine River Plastics of St. Clair, where more
than 400 nonunion workers made $10.50 per hour, almost 50 percent
below Michigan's average wage. No union, less-than-average wages
and the plant still closed. Instead, Michigan needs to grow out
of our problems. Worker training and education and, yes, high-wage
and high-skill jobs are what our state needs.
The New York Times said in a March 2007 editorial that "Labor
unions have a role to play in helping to fix today's economic
ills - most notably, (the) worsening income equality, a problem
that's caused in part by unions' decline and the workers' resulting
lack of bargaining power." The Times has it right. Those
who want to fix Michigan only by seeking to attract businesses
to a low-wage state have it wrong.
(This first appeared in the Detroit News "Labor Voices"
trades pension funding improves, mostly
A cycle of relative instability in the nation's multi-employer
pension plans - a category which covers all the building trades
unions - may be drawing to a close.
A report released Feb. 27 by the Segal Co., the "2006
Survey of the Funded Position of Multi-employer Plans,"
found that the "average withdrawal liability funded ratio
of multi-employer pension plans has stabilized following several
years of decline."
That's accountant-speak for "good news." But according
to John Tesija, a funds attorney for a dozen Michigan-based pension
plans, some international and individual local-union-based plans
are still going to be faced with "belt-tightening,"
especially in the wake of softening contributions to funds brought
on by lower work hours.
Overall, the study found that multi-employer plans on average
were 98 percent funded as recently as 2001, a number which dipped
to 80 percent by 2005. With information not yet compiled for
2006, that number was projected to increase to 88 percent by
the end of last year.
The uptick in the stock market is the primary reason for the
increase in funding levels, said a Segal vice president. Tesija
"When stock market returns go up, the funding in the
plans usually improve," Tesija said. "But of course
the other critical component is hours worked. There are a lot
of building trades plans that haven't quite turned the corner
yet, primarily because of the lack of work opportunities."
Tesija said multi-employer plans haven't been in nearly as
much financial trouble as single-employer pension plans like
those of some bankrupt steelmakers or airlines, "but they
may need to be doing some belt-tightening in the short term to
reflect Pension Protection Act guidelines."
The Pension Protection Act adopted by Congress last year will
impose stringent investment and benefit rules on pension plans
that drop below certain funding levels, to make sure that they
don't drop even further or require a federal bailout.
"The study shows that plans are moving into the high-80
percent funding area, and that's good," Tesija said. "I
think it shows that if they're funded and managed properly, multi-employer
defined benefit plans are here to stay and will continue to do
what they're designed to do: provide a good retirement for workers."
watchdog a habitual snoozer
Report: Labor Dept's. Pension enforcement still lacking
WASHINGTON (PAI) - The Department of Labor agency that enforces
the law covering workers' pension plans has holes in its enforcement,
regularly loses investigators to the private sector and does
not coordinate well with other federal financial regulators that
oversee the same companies, a new report says.
The early-March report, by the nonpartisan Government Accountability
Office - the prime independent auditor of federal programs -
adds DOL's Employee Benefits Security Administration (EBSA) has
improved its enforcement in the last five years, but not enough.
The Government Accountability Office found:
- EBSA "is not positioned to focus its resources on key
areas of noncompliance." In other words, Bush's Labor Department
lacks both goals and data to judge how many firms are obeying
federal law and adequately funding pension plans for their workers.
- EBSA has only 385 investigators, many with less than three
years' experience, to oversee 730,000 private pension plans.
- Other financially oriented federal agencies
compliance programs" to unmask problems and "identify
emerging trends that may warrant enforcement," the report
added. Those agencies also reach out to other information sources.
And those agencies routinely look at corporations' books and
financial records to spot flaws, trends or both, GAO said. EBSA
- The report says the pension watchdog is more inclined to
react to problems, rather than be proactive. "EBSA does
not conduct routine compliance examinations and broad, ongoing
risk assessments to focus its enforcement efforts, like other
agencies (do)," the report said.
tower adds to Grand Rapids skyline
By Marty Mulcahy
GRAND RAPIDS - The city's skyline can already boast the addition
of the new 24-story, $120 million J.W. Marriott Hotel - even
though it won't be completed until this fall.
The new hotel reached its final height of 256 feet in January,
filling in another place in the city's downtown that is undergoing
a nice construction boom. The design for the 340-room hotel was
unveiled in January 2005, complete with one of the largest ballrooms
in the region - able to seat 1,000 - plus two restaurants, a
fitness center, a pool, a hot tub and whirlpool.
The new hotel is located next to the Grand River near the
corner of Pearl Street and Campeau Ave. An adjacent 700-space
parking ramp will serve the hotel.
"We've got a great crew of guys here, and our portion
of the job will be on schedule or ahead of schedule," said
Joe Bryant, plumbing foreman for Andy J. Egan and Plumbers, Pipe
Fitters and Service Trades Local 174. He said the project's crew
has included 53 plumbers and fitters.
The construction of the hotel, which is primarily being performed
by nonunion trades, was initiated by Alticor, and is being built
in a joint venture between Rockford Construction Company, Inc.
of Grand Rapids, and Pepper Construction Group of Chicago. "We
worked hard to design a hotel that is unique and appropriate
for Grand Rapids and the riverfront site," said John Arzarian
Jr. of Lohan Caprile Goettsch, the project's associate principal
and senior designer.
Alticor chairman Steve Van Andel said the design of the new
Marriott "is the latest chapter in the continuing revitalization
of downtown Grand Rapids. We are introducing a modern and sophisticated
structure that will grace our skyline for decades to come."
Hotel construction began in 2005 with the demolition of the
former Israels Designs for Living furniture building and site
work. Vertical tower construction began following four months
of installing micropiles and heavy foundation work to support
the structure. During the peak of construction, the team raised
the hotel at an average of one floor per five-day week.
"There remains much work to be done to bring this project
across the finish line," said Mike VanGessel, president
of Rockford Construction and principal in charge of the JW Marriott
project. "But the topping off of the hotel marks a significant
milestone for us and for the city, as the Grand Rapids skyline
is now forever changed."
According to Emporis, the Marriott hotel is the city's fourth
tallest building. The 34-story Plaza Towers, completed in 1991,
is the tallest structure.
RE-BAR ATOP a parking deck that will serve
the new Marriott (looming behind him) is installed by Harold
Richards of Iron Workers Local 340, working for Granger Construction.
PLUMBERS Joe Bryant (l) and Joe Turner of
Plumbers, Pipe Fitters and Service Trades Local 174 stand in
an area of the new Grand Rapids Marriott where they will be placing
a considerable amount of plumbing: a first-floor bar area that
faces the Grand River.
Monument to be dedicated April 19
GRAND RAPIDS - The unveiling of the "Spirit of Solidarity"
monument in Ah-Nab- Awen Park near the Gerald R. Ford Presidential
Museum near downtown will take place Thursday, April 19 at 9
The nine-foot-tall monument of three bronze figures representing
striking furniture workers is the product of ten years of planning
and seven years of fund raising.
"The Spirit of Solidarity monument is dedicated to the
workers who risked their livelihoods to stand up for the rights
for good working conditions and a nine-hour day," reads
the invitation to the unveiling. "This event changed the
political, social, and religious fabric of Grand Rapids like
no other event."
According to UAW Region 1D, the "event" refers to
the city's historic furniture strike of 1911. In this strike,
4,000 Dutch, Polish, Lithuanian, and German men and boys left
their workbenches on April 19, 1911 and for four months stood
up to the furniture barons without a single striker crossing
the picket line. By August, scabs, starvation, and the raw economic
power of the manufacturers forced their surrender.
Over time, unions became more of a force, and the UAW organized
the Royal Furniture Co. in 1937.
handle the air handlers
ANN ARBOR - A major program to replace chillers at the University
of Michigan Hospital is wrapping up, all under the noses of the
facility's patients and staff.
Since mid-November, a cadre of Hardhats have been quietly
working on the third level (the mechanical floor) of the massive
hospital, performing Phase III of a program to replace the main
cooling air handlers and associated equipment during the off-season
for air conditioning.
The $3.1 million project is expected to wrap up the first
week of April. Phases 1 and 2 increased the system's cooling
capacity and reliability.
"We're replacing equipment that's about 27 or 28 years
old that has come to the end of the line," said Doug Mayher
of Plumbers and Pipe Fitters Local 190, foreman for John Darr
Mechanical. "Hopefully what we're putting in will give the
hospital another 25 years of service."
Steve Carroll of IBEW Local 252, foreman for J.C. Squared
Electric, said in addition to wiring in the new air handlers,
sparkies spent a considerable amount of time "moving conduit
around so that this will be a lot easier to do in the future."
TIGHTENING an electrical box cover is Steve
Carroll of IBEW 252.
Doug Mayher of Local 190, behind three new
air handling coils.
Congress upholds prevailing wage
WASHINGTON, D.C. - Every now and then, a vote comes up in our
nation's capitol that measures support for the Davis-Bacon Act,
which is the single most important law affecting construction
The most recent vote took place on March 9, when an amendment
failed to strip Davis-Bacon/prevailing wage provisions from a
$14 billion clean water construction bill. The vote on the House
amendment was defeated 280-140, and included support from 50
"The anti-worker amendment was defeated soundly because
a bi-partisan majority of Representatives clearly recognized
that prevailing wage protections rightfully belong in this legislation,"
said AFL-CIO Building Trades Department President Edward Sullivan.
"We are hopeful that this is just the first of many victories
for American workers in this new pro-worker Congress."
The attempt was made to add the anti-prevailing wage amendment
to H.R. 720, the Water Quality Financing Act of 2007. It's a
$14 billion reauthorization bill that will fund tens of thousands
of construction jobs on projects that will improve water quality
in the U.S.
Even with complete Republican control of Congress and the
presidency earlier this decade, the federal prevailing wage law
was never seriously threatened. As evidenced by the clean water
amendment vote, a significant bloc of Republican lawmakers have
seen the value of prevailing wage in upholding pay standards
for construction workers.
"We are hopeful that this is just the first of many victories
for American workers in this new pro-worker Congress," Sullivan
Solid gains for worker wages
The average hourly wage/benefit rate for all union construction
workers is $42.64 as of Jan. 1, 2007, according to the Construction
Labor Research Council via the Construction Labor Report.
Last year, wages and benefits in the organized construction
sector rose 4.2 percent for all trades - a rate which is historically
on the high end and "marked a reversal of three years of
declines in the rate of escalation," according to the report.
Wage/benefit settlements in the next two years are also expected
to be in that higher end. Those rates reflect average increases
of $1.85 each year.
Hikes expected in material costs
Washington, D.C. - While building trades labor prices go up (see
above), construction material costs are taking a hike, too.
The March 15 Producer Price Index from the U.S. government
showed construction materials and components only rose 0.1 percent
in February. But Ken Simonson, chief economist for the Associated
General Contractors of America (AGC), said earlier this month
that steel and diesel fuel costs are among the "notable
price increases" that have taken place since that report
For example, he said by April 1, structural and reinforcing
steel are expected to increase by nearly 40 percent compared
to the beginning of the year.
"These steel increases are roughly as extreme as in early
2004, the year that kicked off a three-year binge of materials
cost escalation," Simonson said. "This year, as in
2004, price hikes for other materials, such as diesel fuel and
asphalt, are going to hit construction especially hard."