The Building Tradesman Current Issue | Back Issues Index

September 17, 2004

House snubs Bush, votes to overturn new overtime rules

Union employers gain 'a powerful bargaining chip' with OT rules

Labor Day, 2004 - Edwards states case for Kerry presidency

State of the union? 'No relief in sight' for working families

New iron looks over Spartans' gridiron

The Gangbox - Assorted News and Notes

News Briefs


House snubs Bush, votes to overturn new overtime rules

By Marty Mulcahy
Managing Editor

A political hot-potato got a little hotter on Sept. 9, as the U.S. House voted 223-193 to bar the Bush Administration from enforcing rules that would strip overtime rights from up to six million workers.

The move was a great victory for organized labor, which has been fighting President Bush at every turn in order to kill the overtime regulations. The House vote was made with 22 Republicans breaking ranks and voting with Dems to kill the measure. The Senate, which only has a slim majority of Republicans, is also expected to side with organized labor and oppose Bush's bill.

The new rules, strongly pushed by the Bush Administration, went into effect Aug. 23. The changes in the Federal Labor Standards Act guarantee overtime pay to workers who earn less than $23,600 per year, but expressly allows employers to deny or withdraw overtime pay from workers who earn between $23,600 and $100,000.

Those workers can easily be reclassified by their employers as "supervisors" or "executives," even if they only have the authority to direct employees to clean bathrooms or mop the floor in a restaurant. Re-classifying those workers makes them ineligible for overtime. As a result, there would soon be "an explosion of executives" in the U.S. workforce, predicted Ross Eisenbrey of the labor-backed Economic Policy Institute.

A Labor Department attorney said that Congress would "sow legal confusion" if the Senate passes the measure since the rules have already been placed into rulebooks. The Wall Street Journal said at the very least, the House vote "ensures the issue will remain alive politically going into the November elections. At a time when Republicans are courting middle class voters with the promise of more tax cuts, Democrats see the overtime dispute as a powerful issue to separate themselves and their presidential nominee, Sen. John Kerry, from President Bush."

Democratic presidential nominee John Kerry said, "Today's House vote ... was a huge victory for working Americans and underscores the bipartisan opposition to George Bush's war on overtime pay. Overtime pay is the lifeline that allows millions of working families to keep their heads above water in an economy sinking under a rising tide of health-care and energy costs."

The House rolled the overtime amendment into a $492.3 spending bill. The Senate could vote on the issue this month. Republicans opposing the amendment said they would seek to eliminate the pro-overtime measure from a new bill. In the past,, President Bush has promised to veto any measure that would kill the new overtime rules.

"It's the middle class that built this country," said Rep. George Miller of California, the ranking Democrat on the House Education and Workforce Committee. "Now along comes the Bush Administration and they think the middle class is the enemy."

The action on Sept. 9 marks the second time the House has voted to stop the administration from cutting overtime pay since Bush introduced the measure in March 2003. The Senate has made three similar votes, all in favor of workers' right to overtime.

"Today's vote sends a strong message to the White House: America's workers, leaders and communities do not support his overtime pay cut, and President Bush should back off his threats to veto this important protection for workers' overtime pay," said AFL-CIO President John Sweeny. "The ball is now in the president's court. We will continue to keep up the pressure to translate today's win into a larger victory in the battle to save overtime pay."


Union employers gain 'a powerful bargaining chip' with OT rules

On paper, the House voted on Sept. 9 to bar the new overtime rules from going into effect.

In reality, the rules have been in effect, as of Aug. 23. President Bush circumvented previous congressional votes that barred the overtime rules and used his Executive Branch powers to make certain they went into effect, anyway.

Getting the rules completely overturned is hardly a slam dunk. So what can workers expect? The devil is in the details of the new rules.

"The sweeping changes to the Fair Labor Standards Act governing overtime that took effect last month are having unexpected consequences among anxious workers," reported the Wall Street Journal on Sept. 7, two days before the House vote. "They are causing many to consider switching employers, seek demotions, or ponder how to battle management during contract negotiations."

The new rules allow workers to be reclassified as "supervisors" or "executives," so employers can avoid paying them overtime.

One of those potential new "executives" that the Wall Street Journal used as an example is Patrick Brower, who inspects highway construction work for MIOSHA. The Journal said he is classified as a "team leader," a position that will likely make him ineligible for overtime protection under new federal rules. He may lose his right to overtime - and he has worked more than 300 hours of overtime so far this year.

The Bush Administration pushed the new policy as a means to update 70-year-old labor law and reduce litigation with the new language. In reality, the Journal said early signs indicate that "lawsuits over wages and hours continue to rise" although mostly on the state level, and litigation may increase because employees will be testing the new rules in the courts.

Other consequences include workers like nurses considering changing jobs in order to keep overtime, or seeking demotions. Organized labor and its allies see the new rules simply as a way to save employers money by denying workers overtime.

Union members have been assured that they will be unaffected by the new rules, because collectively bargained pay scales trump the federal guidelines. Ominously, the Journal said Brower will find out more about his status this fall, when his union contract comes up for re-negotiation.

So what do building trades and other union members need to know about the new rules? "As they gird for coming negotiations, some union leaders expect employers to wield overtime eligibility as a powerful bargaining chip," the Wall Street Journal said.

It may take awhile for employers to drag the new rules onto the bargaining table - but it's almost inevitable, said Dr. Dale Belman, associate professor with Michigan State University's School of Labor and Industrial Relations. He said the loss of overtime rights in the unionized sector "won't be like falling over a cliff. It will be similar to the way union membership has dropped over the years - 10,000 here, 20,000 here. Nonunion workers will be affected first, and that will create market pressure on the union side. Few employers are going to want to anger their employees by taking away overtime, but new employees will eventually be reclassified. The pressure on unions will increase gradually."

The Journal article suggested that initially, employers may say they won't ask employees for health care reductions, but they do want to be able to eliminate overtime.

Clues as to who may first be affected in the nonunion construction sector are provided by AFL-CIO attorney Baldwin Robertson.

"Workers who perform manual work exclusively are entitled to overtime pay under current rules and will continue to be under the new Bush rules," Robertson said. "But the blue-collar workers who will be more vulnerable under the new Bush rules are those who perform some combination of manual work and supervisory work, such as working foremen or working supervisors, as well as those who perform some combination of manual work and administrative work or "team leader" responsibilities.

"Blue-collar workers who work outside the employer's place of business, such as repair persons who perform some sales work or could be assigned some sales work, will also be vulnerable. The Bush administration has added a new provision that pretends to protect 'blue collars' but does not address any of the situations in which blue-collar workers are likely to be affected by the new regulations."


Labor Day, 2004 - Edwards states case for Kerry presidency

"If you believe that America is going in the right direction, you should vote for George Bush," said Democratic vice presidential candidate John Edwards. "John Kerry and I have a plan. I think what would actually be good for this economy is to outsource this administration. We can do better."

Speaking to a rain-soaked crowd of about 6,000 on Labor Day in Kalamazoo, Edwards was campaigning for the Kerry for president ticket fully aware that Michigan has suffered significant job losses in recent years - especially those in the high-paying manufacturing sector.

Under the theme of "Marching for a change in 2004," Michigan's workers, retirees, family and friends took to the streets in Labor Day celebrations across Michigan, held in Detroit, Grand Rapids, Marquette, Muskegon and at the Mackinac Bridge.

Edwards - whose brother is an IBEW journeyman inside wireman - panned the policies of President George W. Bush, who will likely become the first president since Herbert Hoover to see a net loss of jobs under his watch.

Reflecting Michigan's status as a closely watched swing state in the presidential election, the Kerry-Edwards team targeted Kalamazoo for Edwards' Labor Day visit. In 2000, Al Gore beat Bush in Kalamazoo County, but by less than 600 votes. Kerry spent the day campaigning in other swing states: Ohio, Pennsylvania and West Virginia.

Edwards told the Kalamazoo crowd that John Kerry would call for a plan to increase educational opportunities by providing four years of college in return for two years of community service. Edwards also said the nation's health care system is "completely in crisis," and called for bringing in a system that will institute an even system of health care delivery for rich and poor.

"This is a president," Edwards said, "who will allow Canadian trash into this country and Michigan, but won't allow the importation of prescription drugs from Canada."

In addition, Edwards focused on issues like health care and education, emphasizing that Bush's tax cut polices have disproportionately helped the wealthy. He said Kerry will push for tax breaks for companies that promote new jobs and employment on the home front.

Edwards pointed out that since Bush took office, five million Americans have lost health care coverage and another four million went into poverty. He promised the audience that he and Kerry are "going to fight for you, we're going to give the White House back to you."

ROOFERS LOCAL 149 members lead the building trades march in the Detroit Labor Day parade down Michigan Avenue.

JOHN EDWARDS speaks to supporters in a park in Kalamazoo on Labor Day.


State of the union? 'No relief in sight' for working families

Is America headed in the wrong direction, as Democratic vice presidential candidate John Edwards suggests?

On Labor Day, AFL-CIO President John J. Sweeney joined workers in Davenport, Iowa and the Twin Cities in Minnesota. He said, "This is not just the most important election in our lifetime, it will also be the toughest. Bush is the most negative candidate we've ever seen, and that's because he has such a horrible record. We have to keep the focus on the real issues - health care, education, jobs, pensions and Social Security. We can't let the issues be ignored or distorted. And we can't let the election be stolen."

A Labor Day report by the labor-backed Economic Policy Institute (EPI) said the economic state of the union today is "a stark contrast to three years ago, before the recession began. With 10 million unemployed U.S. workers searching for work or too discouraged to look, the nation's working families see no relief in sight as job growth has sputtered and real wages have fallen."

"The costs of basic necessities like health care, housing and college keep rising, and many working families' incomes are not keeping pace," says Sylvia Allegretto, an EPI economist and one of the authors of The State of Working America 2004/2005, released Sept. 5.

Historically, it takes an average of 20 months to recover all the jobs lost in a recession. So far, more than three years into an economic recovery, the nation still is nearly 1 million jobs short. The current unemployment rate of 5.4 percent is significantly higher than the 4.3 percent rate of three years ago.

In addition, some 2.1 million people have dropped out of the workforce since 2001 and are not counted in the government's jobless figures - meaning the official unemployment rate would skyrocket to 7.3 percent if they were included in the official unemployment figures, Allegretto says.

Not only are fewer workers employed, they are working for less, the report shows. Jobs in industries that are declining, such as manufacturing, typically paid more and provided such benefits as health care and pensions. The nation has lost 2.7 million manufacturing jobs since President George W. Bush took office in 2001.

Jobs in growing industries, including those in the service industry, pay significantly less and often do not include health or pension coverage. In growing industries, total annual wages and benefits for workers averaged $35,546 between November 2001 and June 2004, compared with $61,983 for industries that are shrinking, according to EPI.

And analysts say the trend toward lower-wage work with few or no health and pension benefits likely is long-term, according to a new AFL-CIO report, Declining Job Quality: Here to Stay?

The jobless recovery has hit the nation's low-income workers the hardest. New U.S. Census Bureau data show some 35.8 million people lived below the poverty line in 2003, up from 34.5 million 2002. Included in the poverty figures are 12.9 million children, an increase of 800,000 children since 2002 - the highest child poverty level in 10 years.

Workers' health and retirement security also is increasingly at risk, EPI reports. Less than half the workforce - 45.5 percent - were covered by an employer-provided pension plan in 2002, a drop from 48.3 percent in 2000. While more than 60 percent of high school graduates had health coverage on the job in 1979, only about 40 percent have it now. Some 25 percent of high school graduates have employer-paid pension benefits, compared with nearly 40 percent in 1979.

The report provides "a stark reminder of what's at stake when the job market remains as weak as it has been over the past few years," says Jared Bernstein, EPI's senior economist. "When such conditions prevail, the overall economy may be posting impressive gains, but the benefits of growth elude the millions of working families largely responsible for that progress."


New iron looks over Spartans' gridiron

EAST LANSING - A milestone for the ongoing renovations at Spartan Stadium was reached on July 30, with the topping out of the structural iron that will support new seating, luxury seats and a replacement press box.

Firms that are involved in the overall project and the topping out include the project management team of Barton-Malow and Clark Construction, as well as W & W Steel Co. and Assemblers, Inc.

Building trades workers are in the process of erecting 24 luxury suites and more than 800 club seats as part of an effort by Michigan State University to enhance revenues. The $61 million project covers 200,000 square feet and will include expanded concourse space, upgraded restrooms and new offices.

The framework has its own foundations but will tie into the existing 81-year-old stadium.

Eventually, the Lansing State Journal said, MSU athletics hopes the boxes and new seating will bring an annual profit of about $1 million.

"We have to have a good team and the economy has to hang in there," said MSU Athletic Director Ron Mason. "Is it a risk? Yeah. But we did enough research to make us think this would work. There might be a time where we wish we'd built twice as many boxes."

IRON WORKERS above, mark the topping out of the framework for the new luxury suites at MSU's Spartan Stadium, below. (MSU Sports Information photo)


The Gangbox - Assorted News and Notes

Republicans and Democrats hashing out the establishment of an asbestosis trust fund are reportedly only about $5 billion apart on a $140 billion package. That money would be placed in a trust fund from employers and insurance companies, and paid to workers harmed by exposure to asbestos.

But Senate Majority Leader Bill Frist (R-Tenn.) has warned that negotiations may falter over how pending and future claims will be handled. In a letter to Sen. Tom Daschle (D-South Dakota), Frist said businesses and insurance companies are unwilling to set up a trust fund to compensate workers, only to leave open additional legal avenues for future claimants.

When it comes to road spending on the nation's highways, there is also a lack of consensus in Washington.

The Senate wants to spend $318 billion per year for the next six years; the House want to spend $283 billion, and President Bush, not wanting to add to the federal deficit, has said he won't spend any more than $251 billion.

The gridlock has been ongoing for months. In fact, five separate extensions of federal law have kept funding in place for highway construction work in all 50 states. As a "donor" Michigan only receives 90.5 cents on the dollar, one of the lowest returns among the 50 states.

"The lack of consensus or sign-off on a long-term bill between the Administration, the Senate and the House decreases the likelihood of getting the job done before the end of September," said Gary Nayaert of the Michigan Road Builders Association.

Chief executive officers at companies that export the most jobs are receiving bigger raises than CEOs at other companies, according to a new report, "Executive Excess 2004: Campaign Contributions, Outsourcing, Unexpensed Stock Options and Rising CEO Pay."

The report, by United for a Fair Economy and the Institute for Policy Studies,
showed the average CEO compensation at the 50 firms exporting the most service jobs increased 46 percent in 2003, compared with an average 9 percent for CEOs at 365 large companies
surveyed by BusinessWeek.

The International Brotherhood of Electrical Workers formed a unique safety partnership with the federal Occupational Safety and Health Administration, five national electrical contractors and two industry trade associations to improve job safety in electrical transmission and distribution work.

The partnership will identify, evaluate and control health and safety hazards and
publicize best practices through training programs and materials.
Just weeks before new Bush administration rules that will take overtime pay protections from six million workers go into effect, workers face another threat to their paychecks.

At a campaign stop last month in Minnesota, President Bush called for new rules to allow employers to replace overtime pay with unpaid compensatory time off. Bush wants to let employers substitute time off at some undetermined future date in lieu of overtime pay.

Currently, the Fair Labor Standards Act (FLSA) says eligible workers must be paid
time-and-a-half for any hours they work beyond 40 in a workweek.

Bush claimed his proposal is "flextime," but the plan "is really about giving America's corporations the flexibility to cheat their workers out of overtime pay after 40 hours a week,"
AFL-CIO President John Sweeney said.

The proposal also would allow employers to pay overtime only after employees work 80
hours in a two-week period. That would mean an employee could work 50 hours one week and 30 the next and not receive any overtime pay.

Backers of the plan claim it would be voluntary for workers. But Sweeney said it's far likelier employers would pressure workers into agreeing to accept compensatory time
instead of being paid overtime. In addition, the plan would give employers the right to designate when that comp time could be taken.

Bush's proposal is similar to legislation that failed to win support in Congress last year.

The percentage of U.S. workers with job-based health insurance dropped from 70.1 percent in 1987 to 64.2 percent in 2002, according to the Employee Benefit Research Institute (EBRI). The drop was even bigger for workers in firms with more than 500 workers.

EBRI said several factors contributed to the fall in health coverage for workers,
including the rising cost of health care benefits; workers moving from manufacturing to service-sector jobs; the increased use of part-time, temporary, contract and contingent workers;
and the lack of union representation.


News Briefs
Construction activity climbs through July

U.S. construction experienced a strong jump in the month of July, rising 5% to $595.1 billion, according to McGraw-Hill Construction. For the first seven months of 2004, total U.S. construction was 10 percent higher than it was for the same period in 2003.

"The construction industry continues to be one of the stronger segments of the economy, amid concerns that the late spring 'soft patch' may be leading to more extended deceleration," said Robert Murray, vice president of economic affairs for McGraw-Hill Construction. "Right now, commercial building has picked up the pace and even institutional building and public works are seeing modest improvement after their weak performance in 2004. The year 2004 is shaping up as another year of healthy expansion for total construction, which remains on track to top the 5 percent increase registered during 2003."

The jump in construction activity nationally was led once again by residential construction which is up 19 percent this year compared to the first seven months of 2003. There are two reasons why construction workers in Michigan may not be enjoying the effects of this boomlet. Union workers are significantly under-represented in the still-strong residential sector - and the "non-residential building" sector only advanced one percent from January through July, 2004 compared to the same period a year ago.

\In addition, during that period the Midwest sector recorded the lowest increase in construction activity anywhere in the nation - up 5 percent, while the South Atlantic region led the nation with a 16 percent jump.

Wage and Hour ready to help
The State of Michigan says it is making its Wage and Hour program more "reachable to the public."

In announcing the opening of a new Wage and Hour Division office in Livonia, Department of Labor and Economic Growth Deputy Director David Plawecki said "we're working to make our wage and hour program more accessible to employers and workers." The new location, he said, "offers phone assistance as well as walk-in service to help the public with wage and hour questions and issues."

Program investigators enforce and look into potential violations of state wage and hour laws. Specifically the Wage and Hour Division enforces four state laws that govern the payment of wages and benefits, minimum wage and overtime, youth employment and prevailing wages.

From Oct. 1 through June 30, 2004, the department established more than $2.2 million in penalties because of violations to state wage statutes. Some of the more common violations include workers being underpaid or not receiving a paycheck and prevailing wage violations.

Do you have a wage-related complaint or a problem? Following is contact information for the Wage and Hour Division offices:
New Livonia office: (313) 456-4906 (yes, the 313 area code is correct)

Lansing (main office): (517) 322-1825

Upper Peninsula: (906) 482-3602.



The Building Tradesman Current Issue | Back Issues Index