Drywall Strike Centers on Issue of Equitable Pay : Labor: Workers say they were denied a share of the profits in housing market’s boom years; now the building industry has gone bust.

Consider this: Your boss tells you that the business isn’t doing well and that you’ll have to take a pay cut. Lots of people have faced bad news like that in this recession.

But then consider that you haven’t had a raise in 10 years; and in at least a few of those years, your industry was doing very well.

That’s the situation in which several thousand drywall workers say they find themselves. It’s the key issue in a strike that’s shut down housing tracts from Ventura County to the Mexican border.

While the price of a house soared by tens of thousands of dollars in the 1980s, the drywall workers continued to average the same $300 a week they say they earned in 1982.

Then the home-building business began to go bust in 1989, and--like other people in Southern California’s sprawling building industry--some of the region’s 4,000 drywall workers had their wages cut.

On June 1, hundreds of them walked off construction sites, demanding a union and higher wages.

Now, five weeks into the walkout, it has turned ugly, with strikers storming construction sites, smashing drywall in half-built houses and threatening non-striking workers.

Last week, 149 of them were arrested after sheriff’s deputies said the men stormed a construction site in Mission Viejo, the largest mass arrest in Orange County in recent memory. Nearly 90 of those arrested may be deported as illegal immigrants.

In an astonishing display of solidarity, the men refused a plea bargain and asked for trials.

Most of the drywall companies say they sympathize with the men, but the cutthroat competition in the industry keeps them from raising wages, especially now.

Many home builders, meanwhile, maintain they just weren’t aware that their subcontractors’ drywall workers were paid so little during the 1980s--this despite the fact that drywall workers have walked off their jobs demanding a raise at least once before, in an unsuccessful attempt in 1987.

At any rate, the builders say, they sympathize too, but right now everybody’s taking it on the chin in this recession.

Here’s what they’re saying as their trade association gears up to hold its first press conference on the strike Friday as part of a major public relations offensive.

* The housing market is in a slump that has chopped profits for builders and their subcontractors. In Orange County, for instance, builders sold 1,826 homes during April, May and June, down 30% from the same period a year ago.

“The market’s been terrible in Southern California since 1990,” said Bob Nastase, a spokesman for the builders’ trade group, the Building Industry Assn. of Southern California.

* Now that builders are constructing as few as a handful of homes at a time--instead of the dozens they built simultaneously in the good times--their overhead is spread over far fewer homes. In other words, it costs more per house to build a few houses than a lot.

* And, builders say, they’re hurting because poor sales mean that home prices haven’t gone up much lately.

A house in Orange County cost a median $289,900 in the second quarter of this year, only slightly higher than the $277,100 median for all of 1988. (That’s still enough to make county housing among the highest priced in the nation.)

On the other hand, the price for a house peaked in mid-1989 at $369,000, according to the Meyers Group, a Corona consultant to the building industry. For several years in the mid-1980s, home prices jumped tens of thousands of dollars each year.

Wages, on the other hand, haven’t gone up in the drywall business since 1982, say drywall companies. And, in fact, some have gone down in recent months.

“Who’s putting that extra money in their pockets?” asked Antonio Hernandez, a strike leader from San Diego. “Not us.”

And yet another of the builders’ big costs--land--has gone down in the last few years, according to the Meyers Group. The price of a lot ready to build on cost an average $150,000 during the boom, a major chunk of the cost of a house. Now it’s $80,000 to $100,000.

(Labor is thought to be less than a fifth of the cost of a house, about the same as the builder’s profits, according to industry experts.)

What happened to wages? In Orange County, they started to stagnate after home builders got rid of the unions in 1982, during the last recession. The builders said they would no longer exclusively hire subcontractors whose employees were in a union.

So some of the unionized drywall companies formed non-union concerns and began underbidding each other for work.

They hired some of the same Mexican immigrants who are now demanding a union. These men were themselves used to break the predominantly Anglo carpenters’ union that had represented drywall hangers.

Things went well during the housing boom of the mid-1980s, but in 1989 the market started to turn down.

“We didn’t capitalize on the boom like we should have,” said Brian Maag, president of Orange County Drywall in Tustin, who says he sympathizes with whom he says are underpaid workers and also with builders who have a lot of money at risk in a down market.

“Our labor was complacent, and we had lots of competition,” he said. “So we continued to cut our prices to the builders, and when this downturn came along, we didn’t have a big profit structure to cut from. So then we cut the only place we could: wages.”

Michael Rafferty, president of Kathryn Thompson Development in Aliso Viejo, meanwhile, spoke for many builders when he said: “These guys are under the impression we’re making a lot of money these days. We’re not.”

Rafferty, whose projects in southern Orange County have been picketed, added: “We’re toughing it out right now, like everyone else.”