CONNstruction - Spring 2011 - (Page 11)

newsandviews Ahead: 2011 Labor Front By Jack Leahy CCIA Director of Labor Relations Bargaining parties in the construction industry face some tougher sledding in 2011. Well known industry consultant Mark Breslin in a recent blog (http://blog. breslin.biz/?p=191) invited comment on the challenges to the industry presented by “The Great Recession,” and there were some passionate responses from both managers and union representatives. He commented in part that: “In a tough economy people start thinking very short term; survival mode and many things including relationships, value propositions, long-term objectives, and others get lost on the side of the road. On the other hand, tough challenges generally wake people up to the futility of the status quo.” Einstein once defined insanity as continuing to do the same thing over and over but expecting a different result. One may fairly ask if unions and employers need to rethink their business model to help adapt to the realities of the 2011 construction marketplace. A hopeful sign occurred in New Jersey last spring when the Bricklayers, Carpenters, Laborers, and Ironworkers agreed to re-open contracts and adopt a wage and benefit freeze to spur employment. According to the Construction Labor Research Council, one quarter of the 379 construction labor agreements negotiated in 2010 involved freezes or reductions. While these measures will no doubt enhance business opportunities near term, productivity and jurisdiction issues also should be examined, as well as what might be termed a sense of entitlement concerning fully employer paid fringe benefit programs. In 2011 CCIA will be negotiating labor agreements with the Operating Engineers, Teamsters, Carpenters, and Iron Workers in an economic climate posing challenges that were only surpassed by the Great Depression. All of the multi-employer health and pension funds are in varying degrees of difficulty. Most pension plans have only regained about half of the market value losses incurred since 2007. This decline, coupled with reduced work hours, means that pension and health funds will need either increases in employer contributions or somehow make benefit cuts to reduce costs. Mr. Breslin has noted that the stability of pensions, and health benefits are directly tied to market share. Given that many union contractors are finding that their bids are 20 percent too high vis-à-vis merit shops, this translates to market share decline, which does not bode well. If we haven’t already gotten there, we are very near the limit of what construction owners can pay, and labor and management will have to re-think their business model to survive. A union strategy that relies on pushing a legislative agenda aimed at fighting off challenges to PLAs and prevailing wage laws alone will not prove viable. Nor will protests that change will only invite a “race to the bottom.” When firms are in survival mode, they cannot be expected to respond like Scarlet O’Hara and say “I’ll worry about that tomorrow.” Instead, measures aimed at making union construction more competitive are required, particularly when aimed at small private projects, which will predominate given state and federal finances. Union leaders should ask whether a member would rather work regularly at a wage 20 percent less than the contract rate and gain health coverage or sit home unemployed and look at his rate in the labor contract. The polarization of labor relations in steel, rubber, autos, and the airlines brought those industries to the brink of extinction. It is time that the building trades realized that fresh thinking is required to preserve market share and survive. “In a tough economy people start thinking very short term; survival mode and many things including relationships, value propositions, long term objectives, and others get lost on the side of the road. On the other hand, tough challenges generally wake people up to the futility of the status quo.” CONNstruction / Spring 2011 / 11 http://blog.breslin.biz/?p=191 http://blog.breslin.biz/?p=191

Table of Contents for the Digital Edition of CONNstruction - Spring 2011

CONNstruction - Spring 2011
Contents
Banking on our Future
Innovative Alternative Methods to Finance Infrastructure Projects on the Horizon
Ahead: 2011 Labor Front
Industry Survey Reveals Contractors’ Guarded Outlook for the Future
Executive Summary
2010 Training, Educational Programs and Safety Roundtables
Safety and Training
Legislative and Government Relations
Government and Industry Related Groups
Labor Relations
Member Benefits and Services
2010 Officers and Board of Directors
2010 CCIA Divisions and Activities
Turner Construction Company – Saint Francis Hospital
Loureiro Engineering Associates, Inc. – Wheeler Clinic’s Northwest Village
CCIA Annual Membership Meeting & Holiday Reception
CRBA Fall Dinner Meeting
Index to Advertisers/Advertiser.com

CONNstruction - Spring 2011

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