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November 11, 2005

Political heat causes Bush to flip over prevailing wage in Gulf region

Re-enforcement has arrived: State seeks more compliance with prevailing wage law

No strain for this crane - 508,000-lb. lift caps major Marathon project

The apprentice: in Michigan it's Scott Daly of IBEW 58

324's Hamilton tapped for conference VP

Senate GOP kills minimum wage hike

Consumers Karn-Weadock plant honored by Chamber for development

News Briefs


Political heat causes Bush to flip over prevailing wage in Gulf region

WASHINGTON - By popular demand, prevailing wage rules are making a return engagement to the Gulf Coast region.

A few days following Hurricane Katrina, which ravaged Louisiana, Alabama and Mississippi, President Bush - as he is allowed to do during a national emergency - rescinded federal rules which required that contractors pay prevailing wages to workers on federally-sponsored rebuilding work.

But the president, bowing to enormous political pressure, reversed himself on Oct. 26, and restored the federal prevailing wage (or Davis-Bacon Act) for taxpayer-funded projects.

"Thousands and thousands of letters, e-mails and calls from trade union members and their families were generated calling for reinstating these critical worker wage protections," said AFL-CIO Building Trades Department President Edward Sullivan. "The resulting bi-partisan congressional effort to pressure Bush to reinstate Davis-Bacon achieved success. This is great news for workers and their families in the devastated Gulf Coast."

The practical effect of Bush's new order will be to restore a base level of wages for construction workers toiling on projects - from highways to bridges to buildings to levees to airports - needed to rebuild damaged areas of the Gulf, especially devastated New Orleans. The payment of prevailing wages resumed effective Nov. 8.

Bush, who yanked Davis-Bacon on Sept. 8, did not make his restoration retroactive, and his order still left politically favored contractors, such as Halliburton, and the low-wage, out-of-state, non-union workers - some of them illegals - in place.

Pressure on Bush mounted after a group of 37 moderate Republican lawmakers signed a letter urging the president to rescind his anti-prevailing wage order.

The Bush Administration originally maintained that the Davis-Bacon suspension would reduce rebuilding costs and eliminate red tape. But unions and their allies in Congress argued that rescinding prevailing wage wasn't anti-union, it was anti-worker. Unions are extremely weak in the Gulf region, and among some trades, the prevailing wage is less than $10 per hour. Taking away even that paltry wage, unions argued, was morally reprehensible for newly homeless workers in the area looking to get back on their feet.

Regarding the revocation of prevailing wage, White House spokesman Trent Duffy said, "it was always intended for it to be temporary," although the Bush Administration left the matter open-ended when the Davis-Bacon Act was rescinded. Democrats charged that leaving the repeal open-ended was the first step in the total repeal of prevailing wage.

Ohio Republican Congressman Steven LaTourette, a leader in writing the letter to Bush asking for prevailing wage to be reinstated, said the White House acknowledged that the suspension of Davis Bacon was not saving the federal government billions of dollars, as conservatives promised.

As usual, if the Wall Street Journal's editorial page doesn't like something, it's usually good for organized labor. Under the headline "Davis-Bacon flip-flop," the Journal called Bush's decision "an act of unprincipled political calculation" and "a special disappointment."

But LaTourette justified Bush's flip by telling a Cleveland newspaper, "There are thousands of skilled Gulf Coast workers who should be working to rebuild their communities, and it sickens me that companies are passing them by and hiring cheap unskilled illegal workers to beef up their bottom line."


Re-enforcement has arrived: State seeks more compliance with prevailing wage law

This is first in a series of articles about the fair enforcement of Michigan's Prevailing Wage Act of 1965. It talks about improvements in the complaint and prevailing wage interpretation process - matters of vital importance to Michigan construction workers. (Editor)

By David Plawecki, Deputy Director
Michigan Department of Labor & Economic Growth

Since taking office in 2003, one of Gov. Jennifer Granholm's objectives has been to improve the health, safety and welfare of Michigan workers. To this end, the Michigan Department of Labor & Economic Growth has sought to strengthen enforcement of the state's Prevailing Wage Act and protect our skilled construction trades and responsible contractors.

Under the previous administration, Michigan's Prevailing Wage Act seemed to discourage complaints and encourage possible abuses. Today, the Prevailing Wage law is being reinvigorated, and Michigan's Wage & Hour Division is working with contractors and workers to ensure fair and equitable enforcement of the act.

Third parties can file complaints.

Under the previous administration, Michigan's Wage & Hour Division could only accept complaints about possible prevailing wage violations from individual workers. Understandably, workers might feel intimidated as there was nothing to prevent an employer from punishing the worker for registering a complaint. In addition, if a complaint was filed, the division would only check the complainant's wages and not those of same classification co-workers.

Today, the intimidation factor has been removed as third parties, such as unions and business agents, can now file complaints on behalf of the worker or workers. In addition, to ensure pay equity, the Wage & Hour Division can check the wages paid to an entire classification of workers at the job site and not just the one(s) filing the complaint.

Wages must be visibly posted.

In the past, there was little enforcement of rules requiring contractors to post for everyone to easily see the job classifications as well as the wages and fringe benefits paid to each job classification working at the job site. Consequently, workers would not necessarily know what they should be paid for the job they were hired to do, and in some cases, not even be aware that the job required prevailing wage.

Michigan's Prevailing Wage law requires contractors to conspicuously post the job classifications at the work site along with the wage and fringe benefit rates. Thus, everyone at the work site is assured they are being paid the correct wages and benefits for their jobs.

Apprentices must be apprentices.

It was possible under the last administration that an employer, in the extreme case, could say that everyone at a work site was an apprentice. The employer could then pay workers less than the prevailing wage. Unfortunately, there was no enforcement at the time to prevent such statements.

Today, Michigan's Wage & Hour Division has implemented a policy that all apprentices must be certified by the U.S. Department of Labor's Bureau of Apprenticeship Training (BAT). They must also carry an apprentice card and work under the direction of a journey worker. Uncertified apprentices must be paid at the higher journey-level wage.

Fringe benefit abuses.

Until now, a contractor could take all of a worker's fringe benefit costs, regardless of whether they were earned on the prevailing wage job or not, and allocate them to the prevailing wage job. Through such an allocation, the contractor would, in effect, avoid paying the full prevailing wage.

For example, suppose the worker spends 40 hours on a prevailing wage job and 40 hours on a non-prevailing wage job. An "avoidance" employer might count all 80 hours of fringe benefits in the 40 hours on the prevailing wage job. In effect, the contractor has inflated the fringe benefits on the prevailing wage to allow paying lower actual wages.

Now, fringe benefits hours must be prorated to the jobs in which they were earned. In addition, state Wage & Hour investigators are looking more carefully at fringe benefit payments when doing onsite audits of payroll records.

Other changes made to prevailing wage

The Granholm administration has made other Prevailing Wage improvements, as well.

  • Truck drivers can now take into consideration their time on and off the project site, if they did more than merely unload the delivery.
  • The ratio of apprentices to journey workers at a project site has been reduced, increasing the number of higher-paid journey workers on site.
  • The definition of a foreperson has been more clearly defined. At a minimum, they must spend 40 percent of their daily duties in a supervisory capacity. The clear definition prevents a contractor from calling everyone at the job site a foreperson, allowing the contractor to pay less than the prevailing wage.

These changes protect workers and contractors by keeping the playing field level.


No strain for this crane - 508,000-lb. lift caps major Marathon project

By Marty Mulcahy
Managing Editor

The world's second largest crawler crane last month was used to pick up and place a 508,000-lb. vacuum tower at the Marathon Petroleum Co. refinery in southwest Detroit, capping a massive two-year construction project aimed at increasing the plant's refining capacity.

Work at the plant brought in some 1,400 building trades workers at peak employment, said Marathon Maintenance Manager Pat Lysaght, but the Hardhat population is quickly dwindling as the project winds down this month. The only petroleum refinery in Michigan, the project will allow the plant's refining capacity to go from the current 75,000 barrels a day to about 105,000 barrels a day.

"It's been exhausting," Lysaght said. "But we got a lot accomplished."

The work of the building trades has involved building foundations for new equipment, as well as installing new exchangers, pumps, vessels, insulation and electrical controls. With an investment of $300 million, this is easily the largest upgrade the Marathon refinery has ever seen. The end of the project necessitated a shutdown of the refinery for about 50 days.

Marathon said the expansion will provide more than 23,000 barrels per day (equivalent to one million gallons per day) of additional fuels to the Detroit market-area. Completion of the clean fuels project will also allow the refinery to produce the low-sulfur gasoline and ultra-low sulfur diesel fuel required by the U.S. Environmental Protection Agency in 2006.

The most intensively planned portion of the project was the importation of the crane and the Oct. 5 installation of the vacuum (or distillation) tower, which separates the different grades of petroleum products. The Manitowac 21,000 crane arrived in some two dozen pieces via semi-truck from its previous job in Tennessee. It took three weeks to assemble, was used for about three weeks, then took another two weeks to tear down.

The new vacuum tower was manufactured near Toronto and shipped via a Great Lakes freighter to docks on the Rouge River. A "multi-wheel transporter" brought the new tower to the job site.

Local 324 operator John Peffer sat at the crane's controls as the old 384,000-lb. vacuum tower was removed and when the new tower was installed. Peffer said he made sure to take a bathroom break before the new tower was set, because there would be a six-hour span in which he couldn't leave the crane's cab.

"We did some practice runs, and double-checked the level on the mats," Peffer said. "The crane is good for 630,000 lbs., so we were under capacity. Actually, the boilermaker signalmen did most of the work, and they did a good job. It was a big pick, but it was pretty easy."

Peffer, a nine-year operator, said the crane is "petty similar" to smaller M-series Manitowac models. He said the crane "traveled real rough" when it transported the vessel about 40 feet. It was then lifted about 200 feet into place.

Installing a new vacuum tower vessel provided an all-in-one fix that allowed for increased capacity at the plant and addressed shortcomings of the old tower. "It was a very smooth process," Lysaght said of the change-out.

With gasoline prices spiking to record levels last summer, U.S. refiners have been roundly criticized for not increasing capacity - there have been no new refineries built in the U.S. since 1976. This work, Lysaght said, moves Detroit Marathon refinery from a small to a medium size.

"This is the culmination of several years of work by hundreds of Marathon employees and contractors," said Gary R. Heminger, executive vice president of Marathon and president of Marathon Petroleum Company LLC. "We are in the final phase of the project and are eager to complete this construction, which not only provides additional supply of motor fuels, but also brings cleaner burning fuels to consumers in the Michigan area."

Marathon is the nation's fifth largest refiner with 948,000 barrels-per-day capacity in its seven-refinery system. The company serves the Midwest and Southeast as a petroleum products marketer with 95 light product and asphalt terminals and access to approximately 7,700 miles of pipeline.

OPERATING ENGINEER John Peffer of Local 324 controls a Manitowac 21,000 crane during an early-evening lift of a 508,000- lb. vacuum tower at the Marathon Petroleum Co. refinery in Detroit. The crane is the second largest in the U.S.

IT TOOK THREE weeks to assemble the Manitowac 21,000 series crane, which was set up to weigh 1.1 million lbs., including counterweights, at the Marathon project.
Photos by Dale Volker



The apprentice: in Michigan it's Scott Daly of IBEW 58

The Michigan Apprenticeship Steering Committee Inc. (MASCI) 2005 Apprentice of the Year award goes to… Scott Daly of IBEW Local 58.

The fifth-year apprentice took the top honor for his skills, attendance, grades, leadership qualities, productivity, safety on the job and community service activities. The MASCI award involves a statewide competition in those areas among all the trades.

"Winning the award is a reflection of Scott's good work, and it's a reflection of the work that we do as a union apprenticeship program," said IBEW Local 58/NECA Electrical Industry Training Center Director Gary Polulak. "Scott is a product of the education and training that we provide, which is the glue that holds labor and management together. Our contractors can't make money without a skilled workforce, and our people can't make a living without the education and employment opportunities that are provided by our contractors."

Daly, a fifth-year apprentice, received a plaque of recognition and $1,000 on Oct. 18 at the Michigan Apprenticeship and Training Conference in Lansing. Kathy Devlin, an instructor at the training school, recommended Scott for the award.

"It's a pretty big honor," she said. "He's obviously a good worker, he's very dependable, he has a great attitude and he's well-thought-of by his employers. This was the first time we entered someone in the competition, so we didn't know what we were up against."

Devlin said in determining Local 58's top apprentice, she and Polulak started by examining apprentices' grades and attendance, and then went on to the interview process. Daly stood out at Local 58's apprenticeship school, and then with the evaluators at MASCI.

IBEW Local 58 Business Manager Joe Abdoo noted Daly's attendance of union membership meetings, participation in Habitat for Humanity efforts and union blood drives. "He is a team player and a true leader," Abdoo wrote in a letter of recommendation for Scott.

The MASCI Apprentice Award, in its fourth year, provides a venue to recognize Michigan's skilled workforce and "to assist in re-energizing pride in craft achievement and job integrity."

"I was honored just to be chosen for the Local 58 portion of the competition," said Daly, 29, an Air Force veteran. He is currently employed by Edgewood Electric.

Clyde Jones, owner of Centerline Electric and chairman of the Joint Apprenticeship Training Committee, said: "we're an industry that puts a lot of effort into educating our people. It's very gratifying to have one of own win this award."

MASCI TOP APPRENTICE Scott Daly (seated, with trophy) is backed by members of the IBEW Local 58/NECA Joint Apprenticeship Training Committee. They include: (l-r) Training Director Gary Polulak, Instructor Kathy Devlin, and JATC members Clyde Jones, Kevin Wieczorek, Shawn Crump, Dave Nesbitt, Mike Moran, and Dan Tripp.


324's Hamilton tapped for conference VP

John M. Hamilton, Business Manager of Operating Engineers Local 324, was elected vice president of the 2005 North/Central States Conference, which was held in St. Louis Oct. 2-5.

The North/Central States Conference is the largest conference of the Operating Engineers in the U.S., representing 18 states in total.

General President Vincent Giblin reported that the IUOE would work within the AFL-CIO to make it the force it should be. He reported that continuing to provide health care for our members was an increasing challenge for all.

President Giblin established a number of new committees that will be reporting back to him and to John M. Hamilton, along with the General Executive Board.

The 2006 North/Central States Conference will be held in Detroit, hosted by Locals 324 and 547.

IUOE North/Central Conference officers & Executive Board. John Hamilton is seated, 2nd from left.


Senate GOP kills minimum wage hike

WASHINGTON (PAI) - Despite labor lobbying, the Senate again voted, on Oct. 19, not to raise the minimum wage.

The 51-47 vote against the $1.10-per-hour hike overcame unanimous Democratic support. Three Republicans also voted for the raise: Senate Labor Appropriations subcommittee chairman Arlen Specter (R-Pa.), and Sens. Michael DeWine (R-Ohio) and Rick Santorum (R-Pa.). The latter two face the voters next year.

The latest plan, offered by Sen. Edward M. Kennedy (D-Mass.), would have raised the minimum wage, which has been $5.15 an hour for eight years, in three installments over two years. Kennedy and his allies said the hike would help working women with children, families and minority-group members in particular.

Earlier this year, Kennedy tried for a $2.10-over-two-years hike in the minimum wage but lost then on a party-line vote, too.

"Americans are working longer, they are working harder, they are producing more and one would think their paychecks would reflect it, at least at the lower economic end. And in all areas, it ought to reflect it. But no, it does not work that way. We refuse to give that kind of recognition," Kennedy chided his colleagues in the October debate.

Other worker allies made similar points. Sen. Thomas Harkin (D-Iowa), quoting the Bush Labor Department's own data, noted that 35 percent of minimum-wage workers are their families' sole breadwinner, while "61 percent are women and one-third of them are raising children."

Referring to arguments by minimum wage increase foes, notably fast-food restaurants and retailers, that a hike would help only teens, Harkin sarcastically said the Labor Department's data "doesn't sound like a teenager flipping burgers to me."

Sen. Hillary Clinton (D-N.Y.) hit the contrast between lawmakers' refusal to raise the minimum wage and willingness to enact more tax cuts for the rich, as part of a pending budget bill. That measure cuts spending for Medicare, Medicaid, food stamps, student loans and other programs by $35 billion-$50 billion, makes the Bush administration's past tax cuts for the rich permanent, and adds $70 billion more in tax cuts.

"It is hard to stand with this (Kennedy) amendment" to raise the minimum wage, said Sen. Hillary Clinton, "and not wonder: When will the majority stop giving privileges to the already privileged? Never has a political party given so much to so few who needed it so little."


Consumers Karn-Weadock plant honored by Chamber for development

Consumers Energy began planning in 2000 how to reduce emissions from its Karn/Weadock Generating Complex in Hampton Township to meet new EPA requirements.

Construction began in 2001, and by the summer of 2002, approximately 1,000 trades workers were on site - making it one of the largest construction projects in Michigan at that time.

The work paid off, in more ways than one. The Karn 1&2 Selective Catalytic Reduction emissions reduction project received the Bay Area Chamber of Commerce's annual Development Award in September, in recognition of the project's positive environmental and economic impact on the community.

The focus of the project was the construction of an 11-story Selective Catalytic Reduction unit - which works to reduce pollutants similar to a car's catalytic converter.

The Consumers Energy emissions reduction work had a significant positive impact on the Bay Area economy. At the height of construction in the year 2002 the utility spent $59 million on locally purchased goods and services in the Bay Area. They followed that by approximately $30 million worth of locally purchased goods and services in 2003 and 2004, when the project was successfully completed and placed in full operation.

The project was completed on schedule and within its $120 million budget. The Selective Catalytic Reduction technology used Karn/Weadock has worked very well, with the device on Karn Unit 2 performing at the best of its class in the entire nation for power plants of comparable size in 2004.

Consumers Energy said its organized labor work force, represented by Utility Workers Union of America Local 144, worked together with local building tradesmen to complete this project with "excellent" results - an 85 percent reduction in nitrogen oxide emissions from the coal-fired Karn units to help make the region's air cleaner.


News Briefs
Construction slips, but is up in '05

New construction starts retreated 2% in September to a seasonally adjusted annual rate of $657.8 billion, McGraw-Hill Construction reported Oct. 27.

While the U.S. housing sector continued to perform at a healthy pace, both nonresidential building and public works lost momentum. Through the first nine months of 2005, total construction on an unadjusted basis was reported at $492.4 billion, up 8% compared to the same period a year ago.

September, although down slightly, remained very close to the elevated pace witnessed over the summer. "In the face of the disruptions caused by Hurricanes Katrina and Rita, the construction industry for the nation as a whole in September proved to be resilient," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "Housing continues to be the mainstay for construction, and September's moderate weakening for nonresidential building and public works was relative to the elevated volume in August."

Murray added "the immediate concern for construction" is the rising cost of building materials, which are being pushed higher in the aftermath of the hurricanes.

The 8% increase for total U.S. construction starts during the first nine months of 2005 was fueled by residential building, up 13%; non-building construction, up 8%; and nonresidential building, steady with the same period of 2004. By geography, the Midwest region, which includes Michigan, had the lowest gain in the nation, up 1 percent.

IUPAT's McGarvey goes to building trades
Sean McGarvey of the International Union of Painters and Allied Trades (IUPAT) has been elected to serve as secretary-treasurer of the Building Trades Department by its Governing Board of Presidents.

McGarvey will serve out the unexpired term of current Secretary-Treasurer Joseph Maloney who resigned due to family health issues, requiring his return to Canada. McGarvey assumed the office on Nov. 1.

"Sean McGarvey currently serves as chairman of the Building Trades Legislative Task Force," said Building Trades Department President Edward Sullivan. "We welcome his election as secretary-treasurer of the department because he brings a broad range of knowledge and understanding to this position having come up through the ranks and excelled at every level.

"The building trades face great challenges ahead and I am confident Sean McGarvey will bring strength, energy and innovation to our leadership team."

McGarvey started his career with IUPAT in 1981 as an apprentice glazier with Glaziers Local 252 in Philadelphia, Pennsylvania. He is currently general vice president at large of the IUPAT. McGarvey was the national membership mobilization director of the IUPAT during the 2000 presidential election. In 2002 he was appointed political director for the IUPAT.


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