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March 4, 2005

Bush wants more union watchdogs

Campaign to privatize Social Security: lies, damn lies and statistics

Speed bump ahead for Michigan's road spending?

Bricklayers, Roofers say bigger unions aren't better

Trades click on new computer science building

News Briefs


Bush wants more union watchdogs

With a record federal deficit and an incredibly tight budget for 2005-2006, President Bush is proposing to give the Labor Department more money in the new federal budget.

And he wants the additional funds not to go toward worker safety programs or more job inspectors - but for greater oversight of union operations.

The Bush Administration has proposed increasing the Department of Labor's budget by 7 percent; up from $50.7 billion in FY 2005 to $54.5 billion in FY 2006.

One of the main goals for the budgetary increase, said Labor Secretary Elaine Chao, is to create "stronger transparency and compliance" over how union dues are spent. Bush is proposing an increase of 17 percent in the DOL's Office of Labor Management Standards, which oversees union accountability.

Chao told the Construction Labor Report that the Department of Labor's oversight role is now comparable to that of the Securities and Exchange Commission (SEC) over corporations.

So… what kind of budget is President Bush recommending for the SEC, in an era of widespread charges of corporate malfeasance, little or no oversight by boards of directors and obscene salaries by executive officers?
According to Bloomberg News, the Securities and Exchange Commission - the nation's top financial market regulator - stands to get 2.7 percent less to spend in the next fiscal year under Bush's budget.

"It was unwise for the Bush administration to cut, through the budget, the funds available to the Securities and Exchange Commission at this critical juncture in their efforts to restore investor confidence in our financial markets," said Sen. Paul Sarbanes (D-Md.) in a statement.


Campaign to privatize Social Security: lies, damn lies and statistics

By Don McIntosh
The Northwest Labor Press
Special to PAI

WASHINGTON (PAI) - The details are dense, a little complex, and take time to digest. But the retirement security of working people may rest on whether they understand what GOP President Bush proposes to do to Social Security.

Bush's Feb. 2 State of the Union address was the opening shot in a high-profile public debate. To win it, Bush and his GOP and business allies must feed the belief Social Security is in crisis, push a platform saying private accounts would solve it, and then outmaneuver opponents - led by the AFL-CIO - who point out that private accounts would make that crisis worse.

But let working people beware, because every poll-tested Bush talking point is contaminated with what Mark Twain famously referred to as "lies, damn lies and statistics."

Conveniently, most of them are contained in a "spin" manual distributed Jan. 27 to Republican members of Congress who gathered at the posh Greenbriar resort in West Virginia for a secret conclave on the issues.

Copies of the manual found their way into journalists' hands. Entitled "Saving Social Security: A Guide to Social Security Reform," the 103-page document is a playbook for Republican advocates of privatization on "How to talk about Social Security personal accounts."

More than 47 million Americans currently receive Social Security benefits: 33 million retired workers and their dependents, 7 million survivors of deceased workers, and 8 million disabled workers and their dependents. And the system's administrative costs are less than 1 percent.

In short, it's the longest-lasting, farthest-reaching, most efficient, and most uniquely popular government program in U.S. history. So those who seek to dismantle it can't criticize it directly. They must create doubt in the public mind about Social Security's future.

Here's how Bush and his allies intend to sow anxiety about Social Security:

Endlessly repeat a statistic about the shrinking number of workers per retiree. "Your audience will be persuaded by the falling ratio of workers per retiree. Cite the ratios of 16 to 1 in 1950, down to 3.3 to 1 today, and falling to 2 to 1 in 25 years. Be sure to reference the source of the data, the Social Security Administration," the GOP spin manual says.

This ignores two facts: First, productivity has increased enormously, so that it takes fewer workers to provide society's basic needs; and second, Social Security payroll taxes have been adjusted upward 21 times in 68 years, to account for increased numbers of retirees.

Take simpler, more obvious solutions off the agenda. If Social Security faces a shortfall in 2042, as the trustees project, then the obvious solution would be to raise the Social Security payroll tax the appropriate amount, trim benefits, or some combination of the two.

Bush has tried to limit the debate by ruling out the payroll tax increase. To deal with changing demographics, the Social Security tax was raised in small increments under Presidents Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Carter, Reagan and Bush Sr. But Bush says he can't do it - because it would harm the economy.

Present a privatization proposal as the only solution - and change the name. Bush does not call it privatization any more. "Privatization" no longer polls well, GOP lawmakers learned.

The "Saving Social Security" GOP spin manual advises them: "Privatization connotes the total corporate takeover of Social Security. This is inaccurate and thoroughly turns off listeners, who are very concerned about corporate wrongdoing."

Instead, backers are to refer to it as "personalization," which "suggests increased personal ownership and control." The accounts are no longer to be referred to as "private accounts," as Bush called them last year. Now they are "voluntary personal retirement accounts."

Distract people from the fact that private accounts worsen Social Security's financial health. Whatever they're called, the accounts won't solve the system's supposed crisis. Remarkably, senior administration officials acknowledged that to reporters in a White House briefing after Bush's State of the Union address.

Private accounts would worsen Social Security's finances because any money taken out of Social Security for investments would have to be made up for somehow, by tax increases, benefit cuts... or borrowing.

Declare Social Security is going bankrupt. "If you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless Congress has got the willingness to act now," Bush said in a Jan. 11 talk show-style "conversation."

Bush used the word "bankrupt" five times in 45 minutes on Jan. 11, and twice in his State of the Union address. The word "bankrupt" brings to mind an entity unable to pay its debts and forced to sell off its assets and dissolve, ceasing to exist. In Social Security's case, nothing could be further from the truth.

The Social Security system is not a debtor; it's a lender, having lent $1.5 trillion to the federal government over the last 20 years. Those funds are represented by government bonds, repayable with interest, which Social Security can cash in. Social Security will be solvent, even in the worst case scenario predicted by the Bush administration, until 2042.

At that point, if Congress had made no change whatsoever - for 38 years - Social Security would have exhausted the notes. But payroll tax revenues, again with no change, are enough that it would still be expected to pay, to the beneficiaries of 2042, 73 percent of all benefits they are now promised.

Predict the system's collapse by the year 2042, as Bush did in his State of the Union address. He said it would be "exhausted." Expect to hear a lot about the year 2042, the supposed doomsday of Social Security as we know it.

Privatization backers assert as fact that 2042 is the year the trust fund will be depleted, and benefits must be cut 27 percent. That date comes from the most recent report of the Social Security trustees, the official audit of its solvency.

Like all such predictions, the "2042" date is based on complex actuarial assumptions about birth rates, death rates, marriage and divorce rates, immigration, productivity growth, inflation, employment, trends in the age of retirement, wages, interest rates, to name the most important factors. It is also their most-pessimistic option, assuming 1.8 percent growth and the current 5.5 percent jobless rate for the next 38 years.

The Social Security trustees themselves have pushed back the date. In 1997, they said it would be 2029. Last year, the Congressional Budget Office conducted the same analysis, with slightly less pessimistic assumptions, and predicted 2052.

Tell younger workers Social Security won't be there for them. Polls show this line, repeated over and over again, has had the most impact. The GOP spin manual says: "The current system cannot afford to pay promised benefits to younger workers."

If Congress stops making adjustments, which is what Bush proposes, then yes, eventually the trust fund will be depleted and Social Security will have to cut benefits by 27 percent - unless the trustees' pessimistic assumptions are wrong, or Congress raises the payroll tax 2 percent, or starts levying it on income above $90,000, in which case Social Security could afford to pay benefits to today's young when they retire.

Bush touts rewards of stock investments, but does not mention the risk. If the market is such a good investment, one might ask, why doesn't the government invest in it directly, on behalf of Social Security participants, and continue to guarantee the benefits?


Speed bump ahead for Michigan's road spending?

OSHA is union blind.

Michigan's transportation plan for the next five years will spend $5.9 billion on the repair and maintenance of state roads through 2009 - with much lower spending on the construction of new roads - the Michigan Department of Transportation announced last month.

A wide-ranging report by MDOT on the state of the state's transportation system said that Michigan's highways, roads and bridges will improve over the next several years. However, there are huge question marks over funding levels beyond 2009.

"This is a forecast; we just don't know what money will be there for brand-new construction," said Michigan Department of Transportation Director Gloria Jeff. "The largest, single most important influence on funding has to be at the federal level."

One thing is for sure: Gov. Jennifer Granholm is moving Michigan away from using taxpayer funds to pay for new roads. MDOT said the governor's "Fix it First" program places "an increased emphasis on preserving our transportation system rather than expanding it." State transportation officials project an average of $1.2 billion per year will be spent on state road construction through 2009 - and of those expenditures, 95 percent will be spent on maintaining the existing road system.

"The philosophy behind the 'fix it first'campaign is a response to our tight state budget," said MDO spokesman Ben Kohrman. "We have to make sure existing infrastructure is in the best possible condition."

Road spending in Michigan is way up from a decade ago. In the three-year period of 1994-1997, Michigan spent a total of $1.7 billion on road work, when public uproar over potholes pushed road spending higher.

Michigan's roads are improving, and will continue to do so up to a point, MDOT says. On state freeways, 86 percent were deemed "good" in 2004, and that's expected to climb to 91 percent in 2007. But MDOT said that "good" condition is expected to drop down to 87-89 percent beyond 2007.

On the state's non-freeway roads: 81 percent were deemed "good" in 2004, which MDOT says is expected to climb to 84 percent "good" by 2007. But after that, progress is also expected to fall off.

Also expected to drop - significantly - is construction employment in the road building industry. MDOT said Hardhat employment is expected to drop from 9,881 in 2005, to 6,818 in 2009.

"The projections were made with some real question marks about how much federal money is going to be available," Kohrman said. "The downturn in jobs and the amount of construction we will be able to do is a direct reflection on how much money will be available from the federal government - which is something we don't know."

Congress and President Bush have been grappling for more than a year to get together on a long-term federal funding plan for the nation's roads. Michigan's budget is tight and lawmakers have been in no mood to impose a higher gasoline tax to pay for better roads.

In recent weeks there have been hints that Michigan could see an increase of $100 million to $300 million in increased federal revenues for transportation spending. But according to a national nonprofit transportation research group, The Road Information Program, Michigan needs to spend an additional $700 million a year on its highway system to maintain and continue to improve road and bridge conditions.

Still, the money that's being spent on Michigan roads has a number of economic side benefits. A University of Michigan study released Feb. 17 said that MDOT's road and bridge program will create 26,550 Michigan jobs in 2005 and will amount to $57.6 million of travel time savings for households and $35 million in savings for businesses as a result of improving pavement conditions and increasing capacity between 2005 and 2009.

These savings will generate $6.5 billion of inflation-adjusted Gross State Product and create $4.2 billion in real personal income for the state. The study was completed by the University of Michigan's Institute of Labor and Industrial Relations with assistance from the Economic Development Research Group, Inc.

Gov. Jennifer M. Granholm welcomed the results of the study, commenting that her administration's transportation priorities "further reinforce the connection between good roads and good jobs for Michigan."

"MDOT's work to preserve state roads and bridges provides residents and visitors alike with a good quality of life, helps promote responsible land use, and ensures that Michigan's businesses keep their global competitive edge," the governor said.

ONE OF THE LARGEST ongoing road construction projects in the state is the $58.6 million project to rebuild I-94 between Beech Daly and Pelham roads. Included is the reconstruction of the I-94-Telegraph interchange, shown above., which will include a new arch bridge.

OPERATORS PREPARE TO move a crane across Telegraph Rd. at I-94 in Taylor.


Bricklayers, Roofers say bigger unions aren't better

Two of Michigan's largest general contractors - Barton-Malow and Walbridge- Aldinger - were tapped earlier this month to oversee construction of two of the state's largest construction projects. The jobs have a combined price tag of $850 million.

A new GM engine plant is being constructed in Flint that will be part of a $450 million re-investment in the Van Slyk Road Manufacturing Center. The 442,000 square-foot plant will be constructed by Ideal Contracting in association with Barton-Malow and together with their subcontractors and the building trades.

The GM Flint Global V6 Engine Facility broke ground Dec. 17, 2004 and is scheduled for completion by Oct. 28, 2005. The fast-track project is being designed using computerized 3D Virtual Factory tools, in order to eliminate field conflicts and reduce overall schedule and cost as part of the integrated design-build process.

The design-build team, along with the GM project team, are both located in the
Barton Malow Headquarters, to expedite the design and decision-making process, said Alex Ivanikiw, Barton-Malow Senior Vice President. "This integrated approach to bringing the team together for 3-D design and engineering will greatly streamline the process, reducing costs and accelerating the pace of construction."

On Feb. 3, Wayne County Airport Authority Board approved the hiring of Walbridge-Aldinger and Barton-Malow to build Phase I of the Detroit Metro Airport North Terminal Redevelopment Project.

Under Phase I, Walbridge/Barton Malow, LLC will provide pre-construction services for the project, a planned 25- to 27-gate terminal complex which will replace the airport's existing Davey & Smith terminal complex.

When complete, the $403 million North Terminal complex will be used to accommodate
airlines that are currently operating out of the aging L.C. Smith Terminal (American Airlines, America West, Southwest, Spirit, United, US Airways, and others). The contract duration is estimated at 46 months.

"There has been very positive interaction with the staff and there is a real enthusiasm for this project and Walbridge/Barton Malow as our Construction Manager," said Metro Airport Authority CEO Lester Robinson.

Walbridge-Aldinger and Barton Malow have both performed significant work at
Metro Airport. Barton Malow served as a lead member of the program management team for the $2.2 billion Capital Improvement Program that built the infrastructure, sixth jet runway and a host of projects to prepare for the Midfield Terminal Project.

Walbridge-Aldinger has performed over $700 million worth of construction as contractor, design-builder or construction manager on portions of the Capital Improvement Program, on a number of airline maintenance hangars, for various air freight and rental car companies, on terminal renovations and additions for both the airport and for airlines, and currently on the expansion of the McNamara Midfield Terminal.


Trades click on new computer science building

A new $40 million Computer Science and Engineering Building is under construction on the University of Michigan campus.

Skanska USA and the building trades are in the process of erecting the four-story, 60,000-square-foot building, which will provide research labs and instructional space to support computer science and information technology.

The phased-in project is taking place to minimize disruption of the academic calendar. The project began in the fall of 2003 and is scheduled for completion in early 2006.

The building will feature flexible and configurable lab space and common areas to encourage collaboration among students and faculty. The highly networked Computer Science and Engineering building will also allow enhanced research into experimental systems in computer architecture and special labs for robotics, mobile computing and security experimentation.

University of Michigan alumnus Kevin O'Connor, chairman and co-founder of DoubleClick Inc. (the first Internet advertising network), gave $5 million for construction of the building. He told the Michigan Daily that the U-M has done a decent, but not exceptional job with its computer

"If you asked me today, '20 years from now, what's it going to look like?' I have no idea, but there are two things that I can tell you with certainty," he told the Daily. "One is that computers and machines will come to play an increasing role in our life, and the second one is that many of the innovations will come from the University of Michigan Computer Science Building."

IT'S RELATIVELY LOW technology in a computer building, but necessary: Reed Breight of Plumbers and Pipe Fitters 190 and Monroe Plumbing installs toilet carriages.

AIR FLOW TESTING IS performed on ductwork by Steve Frohling and Rick Keller of Sheet Metal Workers Local 80 and Applegate at the U-M Computer Science and Engineering Building.


News Briefs
Bush-backed bill curbs class-actions

WASHINGTON (PAI) - President Bush and the Republican-controlled Congress have adopted a "reform" bill that sharply curbs the legal rights of individual Americans in favor of large corporations.

The legislation will transfer most large, multi-state class action lawsuits out of state courts and into the federal courts, where companies are widely expected to usually get a better deal.The bill also curbs state attorney generals' right to sue on behalf of consumers

Democrats argued that the main goal of Republicans was to hurt trial lawyers who donate heavily to the Democratic Party and to help big business escape multimillion-dollar verdicts from state courts. "This bill is the Vioxx protection bill, it is the Wal-Mart protection bill, it is the Tyco protection bill and it is the Enron protection bill," said Rep. Jay Inslee, D-Washington.

Sen. Edward Kennedy (D-Ma.) wanted state courts to continue to get class action suits to "prohibit discrimination on the basis of race, color, religion, sex, national origin, age, disability...or to obtain relief under state or local law for failure to pay the minimum wage, overtime pay, or wages for all time worked, failure to provide rest or meal breaks, or unlawful use of child labor."

Republicans argued that the new measure will prevent "frivolous" lawsuits. "Frivolous lawsuits are clogging America's judicial system, endangering America's small businesses, jeopardizing jobs and driving up prices for consumers," said House Majority Whip Roy Blunt, R-Missouri.

AFL-CIO President John Sweeney called the measure "a huge disappointment for working men and women who seek fair resolution of their cases in state courts."

Granholm proposes minimum wage hike
LANSING - Part of Gov. Jennifer Granholm's economic development package is a proposal to raise the state minimum hourly wage for full-time workers from its current $5.15 per hour.

"It is overdue," she said in her State of the State message. " It has not been adjusted for eight years - back when gas seemed expensive at $1.22 a gallon. It is only fair to our workers - many of whom support families on $5.15 an hour, below poverty-line wages - to increase the minimum."

Granholm didn't propose a new minimum wage, but a week earlier, State Rep. LaMar Lemmons Jr. (D-Detroit) introduced two minimum wage hike bills in the GOP-run legislature. One would raise the state minimum for full-time workers to $6.75 hourly this July 1 and by another dollar an hour next July 1. The other would raise the minimum for workers partially paid with tips from $2.65 to $4.65 an hour.



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