Some Unions Now Boast of Their Contract Concessions

A new era has arrived for America’s unionized construction workers, as dramatically demonstrated by their statements boasting about their wage freezes and their acceptance of contract provisions that they once scorned.

Wages of workers who are not in construction, unfortunately, have dropped 5% in the last 10 years after being adjusted for inflation. But far worse is the predicament of those “aristocrats of labor,” as construction workers are still sometimes called because of their skills and relatively high wages.

Real wages in construction have dropped precipitously--down 14.7% in the last decade, or nearly three times more than those of other workers, according to the Bureau of Labor Statistics.

Instead of bemoaning the drastic reverses of their members and fighting for more money, leaders of construction unions proudly say the hefty real-wage reductions their members have approved show just how much help they are giving to their unionized employers, who must compete with low-wage, non-union construction companies.

In 1980 and 1981, construction workers were demanding and getting wage hikes of 11% or more, about twice the increases being won by other workers.

That lack of financial restraint in the 1970s and early 1980s was matched and often surpassed by many in much higher income brackets, such as corporate executives, doctors, lawyers, entertainers and others.

And most of those far wealthier than the building craft workers are still showing no interest in curbing the substantial increases of their earnings.

But union workers did raise themselves into America’s middle class--sometimes even higher. But they also began to react to the fact that their healthy wage gains were primarily responsible for the soaring number of non-union contractors, which cost them jobs.

Non-union workers now do an estimated two-thirds of all construction in the United States, compared to only one-third a few years ago.

That belated awareness of the harmful results of their contract gains resulted in the change in construction union bargaining policies that has at least slowed the incursions made into their ranks by non-union firms.

And the change is continuing. Just one of many examples:

Last week, Southern California plumbers and pipe fitters’ District 16 hailed as a major achievement its agreement with the Associated General Contractors to extend their two-year contract without changes. And they also agreed to give up a 50-cent hourly pay boost that they were entitled to get under the contract.

Wage restraint is only one of several tactics the construction unions are using to halt their membership decline. Two others are called “project agreements” and “continuity of work agreements.”

These are pacts signed by unions with either contractors, developers or government agencies that are in charge of construction jobs, such as the $600-million Los Angeles-to-Long Beach light-rail project.

In private industry project agreements, unions pledge not to strike or interrupt work for any reason, such as jurisdictional disputes between unions. Also, they often include special contract concessions by the unions to the contractors. In return, the contractors, or developers, promise to use only union workers.

The “continuity of work” agreements used in the public sector do not require a government agency to use only union workers. Instead, they must agree to pay the wages and benefits that prevail in the area. In large cities, that usually means union scales, so the usual result is that union workers get the jobs.

In past years, such agreements weren’t necessary in the public or private sector because almost all major construction jobs were union anyway. The unions didn’t have to make any concessions to get jobs for their members.

But as their membership dwindled, construction unions have started signing more and more project agreements with private industry, such as one recently with the Adolph Coors Co. that came only after a 10-year union boycott of Coors.

Other project agreements have been reached with firms such as American Express and two huge Japanese construction companies that are building factories for Japanese firms in this country.

But the agreements don’t always work well in the public sector, as shown by a surprising decision of the Los Angeles County Transportation Commission to give the Herzog Corp. of St. Joseph, Mo., a multimillion-dollar contract for work on the Los Angeles-Long Beach light-rail project.

With considerable fanfare, the commission and construction unions signed a “continuity of work” agreement in 1985. There was to be labor peace to help speed the project, and the unions thought that would mean union contractors would be used to do the job.

But Herzog, which was not the lowest bidder, is using non-union workers, most of whom were brought in from outside California. The firm got the contract over the protests of the union, minority groups and even the recommendation of the commission staff.

Herzog’s contract may be legal but it shows that, faced with opposition from influential lobbyists, construction unions cannot depend on “continuity of work” agreements to assure that government jobs go to union workers.

Generally, though, they are effective, and together with wage restraints and other tactics, construction unions may be ending the steady erosion of their membership.

Sub-Minimum Wage ‘Betrayal of the Poor’

David Padilla may have sounded a bit overwrought, but he wasn’t far off the mark the other day when he exclaimed:

“We members of the California Industrial Welfare Commission (he is one of five) have betrayed the working poor of California. And we could well hurt below-poverty-level workers across the entire country.”

Padilla was talking about a tentative decision by the commission Sept. 11 to boost the state’s $3.35 hourly minimum wage to just $4, to raise the youth sub-minimum wage by just a nickel and allow employers to pay the sub-minimum to students who are as old as 21 instead of only 18, as the law now requires.

If final approval is given to the decision to raise the age of youths to whom employers can pay the sub-minimum wage, it could set a terrible pattern for the nation.

The final vote by the state commission will come Dec. 18. There are two employer members of the commission who think that even the $4 minimum is too much for the poor, and Michael Callahan, the second labor member, unexpectedly voted for the $4 minimum. Presumably, however, he will change his vote when the showdown comes.

That means that unless Muriel Morse, the neutral member, shows more sympathy for the plight of the poor, they will get no help from that source.

A massive protest demonstration is planned Oct. 31 at the Los Angeles City Hall when the commission will listen to public reaction to its proposed minimum wage increase, the first since 1981.

Leaders of the Catholic Church and other religions have joined labor and community organizations to press for a substantially higher minimum wage--about $5 an hour--and they are asking more affluent people to try and support themselves on just $4 an hour for a while, just to feel the pain of poverty.

But friends of the poor seem to be fighting a losing battle, not just in the state commission but also against supposed friends in the state and federal government.

The Democratic-controlled California Legislature passed a bill to boost the minimum to $4.25 an hour, but Gov. George Deukmejian vetoed it Monday.

The Legislature had dropped the only interesting part of its proposal: a provision to index the minimum wage to some standard measurement to end the repetitious arguments that have been going on since minimum wage laws were first enacted in the 1930s.

If the minimum were half of the average, private, non-supervisory, non-farm hourly wage--one of the proposals--it would now be $5.15.

Many Democrats in Congress are trying to raise the minimum, but only slowly, in several stages. Since they are divided, though, there is no chance that they will provide any relief to the poor this year.

Perhaps Padilla really wasn’t overwrought after all when he talked about the “betrayal of the poor.”