February 27, 2009
has something for everyone; but trades would like more
a 'cushion,' not a cure for construction unemployment
windfall pegged at about $7 billion
Will the New,
New Deal be enough?
lesson: Employee Free Choice Act 101
First' would put local workers first in line
bill has something for everyone; but trades would like more
By Mark Gruenberg
PAI Staff Writer
WASHINGTON (PAI) - The $790 billion American Recovery and Reinvestment
Act, known as the stimulus bill, contains something for just
about everyone as it tries to help pull the economy out of the
deepest crash in at least 24 years. But analysis also shows that
not everything everyone - including in the labor movement - wanted
is in it.
The measure is one-third tax cuts and two-thirds spending.
The whole point, President Obama says, is to create or maintain
between 3.5 million and 4 million jobs which would otherwise
go down the drain, adding to the nation's 11.62-million-person
jobless rolls and 7.6% unemployment rate.
Obama made those same points on Feb. 12 to a crowd of Auto
Workers at the Caterpillar plant in Peoria, Ill. And when he
finished, the head of the still-profitable firm - which raised
its profit margins in past years by imposing a two-tier contract
on UAW, among other moves - said he supports the stimulus, but
did not promise to rehire any of the 20,000 workers worldwide
Cat plans to lay off.
Details of the bill include:
- About $50 billion for construction of roads, airports, bridges
and other projects nationwide. Construction unions estimate each
$1 billion in construction spending creates between 22,000 and
47,000 jobs, depending on the type of project. The unions welcomed
the spending, but some leaders - including Steel Workers President
Leo Gerard and Laborers President Terry O'Sullivan - lobbied
for more. Of that infrastructure spending, about four-fifths
will go for the immediate projects, while the rest (about $11
billion) is a down payment on upgrading the nation's electricity
- $54 billion earmarked for state budgets. AFSCME lobbied for
even more. The money will preserve social services for the jobless,
go for highway and school building and to limit layoffs of teachers,
fire fighters and others. There's also $87 billion to states
to help pay for Medicaid. States face huge deficits, led by California's
$42 billion. The smaller federal figure means fewer people will
avoid layoffs, especially since - at the insistence of key swing
vote Sen. Susan Collins, R-Maine - part of the states' funds
would go not to such people programs but to possible energy retrofitting
of schools. American Federation of Teachers official Nancy Van
Meter said "the stimulus money for education was cut in
half and the school construction money was zeroed out" by
the Senate. Negotiators restored part of the funds, and included
the school construction money, which would also help employ building
trades workers, in the state aid.
- The bill also contains $15.6 billion to increase maximum
Pell grants to help students afford college, an Obama goal.
- Retention of the Senate's modified "Buy American"
provision, saying all projects in the bill, not just the infrastructure
projects, should use U.S.-made materials, as long as those purchases
are made "in a fashion consistent with worldwide trade rules
and obligations" for government procurement. The Steelworkers
and the Congressional Steel Caucus pushed the Buy America plan,
saying it continued 75-year-old policies.
- The European Union still rails against "Buy America"
as too protectionist, prompting AFL-CIO Secretary-Treasurer Richard
Trumka to point out the EU has more-restrictive government procurement
rules, banning competition against national industries in drinking
water, telecommunications, energy and transportation.
- Extended unemployment benefits and a subsidy to help jobless
workers pay COBRA premiums to their former employers in order
to keep health insurance. But the amount for the COBRA premium
subsidies was cut down, thus lessening how many weeks each jobless
worker could get federal funds to help pay for health care.
- There's also a $20 billion increase for food stamp spending.
- $1 billion for a "near-zero emissions power plants"
to encourage energy efficiency and reduce emissions of carbon
into the atmosphere.
- A tax deduction for new car purchases, inserted by Sen. Barbara
Mikulski, D-Md., and designed to help sales as the three U.S.-based
car companies hit the financial rocks, was severely cut.
bill a 'cushion,' not a cure for construction unemployment
By Marty Mulcahy
From the perspective of the building trades, a perfect federal
stimulus package would have lavished hundreds of billions of
dollars on infrastructure upgrades, road and bridge projects,
school and public building improvement work, and green energy
But the $787 billion American Recovery & Reinvestment
Act is far from the construction industry's ideal. It's loaded
with hundreds of billions in federal dollars intended to stimulate
the economy and help Americans in other ways.
Still, the stimulus provides for $135 billion in U.S. construction
and infrastructure investment, which will create nearly two million
jobs over the next two years, according to the Associated General
Contractors (AGC) of America.
The analysis, conducted by the association's chief economist,
Ken Simonson, concluded that the infrastructure and construction
funding would create or save 650,000 construction jobs and 300,000
positions in related fields such as equipment and material supply.
An additional 970,000 jobs in the broader economy are also expected
to be created or supported by the investments.
"Whether or not you wear a hard hat for a living, these
construction investments will make a difference for the better,"
said Simonson. "Beyond the immediate benefits, the new infrastructure
projects will make businesses more efficient, commuting more
reliable and our economy more prosperous for years to come."
President Obama signed the legislation Feb. 17, which was
adopted completely along party lines in the House (all Democrats
for, all Republicans against). Only three Republicans joined
Democratic senators in passing the bill.
"We are remaking the American landscape with the largest
new investment in our nation's infrastructure since Eisenhower
built an Interstate Highway System in the 1950s." Obama
said. "Because of this investment
men and women will
go to work rebuilding our crumbling roads and bridges, repairing
our faulty dams and levees, bringing critical broadband connections
to businesses and homes in nearly every community in America,
upgrading mass transit, building high-speed rail lines that will
improve travel and commerce throughout our nation."
An analysis of the construction portion of the stimulus package
by Richard Kroman of the Engineering News Record said that "with
most of the stimulus directed toward infrastructure, the news
isn't uniformly good" for all the trades.
"Highway and bridge construction should grow modestly,
but nonresidential building construction will begin to turn toward
cyclical lows," he wrote. "The stimulus package will
cushion, not save, the buildings sector. What is certain in a
time of uncertainty, economists say, is that the industry will
be much more public-works-oriented than at any time in recent
Late in the legislative process, President Obama shepherded
into the bill $8 billion in high speed rail money, as a start
toward modernizing the nation's train corridors. And, one of
the three Republican senators who voted for the package wanted,
and got, about $20 billion in school construction stripped from
the final bill. However, local school districts can spend money
they do receive on school construction.
"Probably the biggest disappointment," said the
Engineering News Record, "was that the final package has
no specified funding for school construction."
Said American Council of Engineering Companies President Dave
Raymond: "The final package is not perfect, but it will
invest well over $100 billion in infrastructure improvements
at a time when this investment is desperately needed."
The anti-union Associated Builders and Contractors praised
some portions of the stimulus bill, but predictably had no use
for the fact that workers would receive prevailing wages on all
projects funded by the stimulus package. "Including Davis-Bacon
Act provisions in the bill not only increases wasteful spending
but will not offer any additional benefits to the economy,"
said Jerry Gorski, 2009 ABC national chairman. That's debatable
- especially for workers holding union cards: union Hardhats
on average earn about a third more than their nonunion counterparts
and those higher earnings are certain to add benefits to the
AFL-CIO Building Trades Department President Mark Ayers called
the legislation the "first critical step in revitalizing
our economy and offering renewed hope for millions of struggling
American working families and their communities."
We reported in the past about Michigan and other states lining
up "shovel ready" projects, so that the stimulus money
can bring about employment as quickly as possible. Indeed, for
infrastructure money, the goal in the stimulus is to use at least
50 percent of that money in the first four months after the bill's
signing. Overall, however, the ENR said only $34.8 billion, or
11 percent of the stimulus money, will be spent by Sept. 30.
Then the pace picks up in 2010.
"There's no doubt the stimulus will have a positive impact
for construction businesses and their workers across the country,"
said Stephen Sandherr, chief executive officer of the AGC. "When
you get beyond the politics and the policy, the fact remains
these investments will put people to work, save businesses, and
help rebuild aging infrastructure."
stimulus windfall pegged at about $7 billion
Michigan's share of the $787 billion American Recovery &
Reinvestment Act stimulus, approved by Congress and signed into
law on Feb. 17 by President Barack Obama, comes in at about $7
billion for 2009 according to some estimates.
That's a pretty good chunk of change, according to a Moody's
economist, who said hard-hit Michigan (auto industry) New York
(financial services) and Florida (housing) are at the top of
the list of states when it comes to getting proportionally larger
portions of the stimulus money.
According to Michigan Construction News.com, citing information
from the National Conference of State Legislatures and the National
Governor's Association, some of the construction-related portion
of the money breaks down like this:
$847 million for highway and bridge construction.
$279 million for "weatherization" work.
$171 million for wastewater treatment and collection system
$165 million for grants to mass transit systems.
$67 million for drinking water system improvements.
$43 million for public housing.
"To anyone who has an understanding of the years of under-investment
in Michigan's public works infrastructure - or any state in the
union, for that matter - the sums coming our way seem pathetic,"
commented Guy Snyder of Michigan Construction News.com.
To illustrate the relative size of the federal stimulus investment
for construction, the biggest chunk of stimulus spending, $847
million for roads and bridges, would increase the funding level
by about 26 percent over the $3.2 billion that was invested in
Michigan roads in 2008. Last November, the bi-partisan Michigan
Transportation Funding Task Force estimated that in order to
obtain a "good" investment level in highways, roads
and bridges, Michigan would need to nearly double its current
annual investment to a total of $6.1 billion,
Still, the federal stimulus investment isn't chicken feed.
The Associated General Contractors of America estimated that
each $1 billion in nonresidential construction spending would
add about $2.3 billion to the state's Gross Domestic Product
and about $754 million to personal earnings. Each $1 billion
in such construction investment, the AGC said, would also create
or sustain 20,000 jobs, 6,800 of which would be on-site construction
jobs within Michigan.
Citing government figures, the AGC said the construction industry
in Michigan (residential plus nonresidential) employed 136,000
workers in December 2008, a decrease of 76,100 (35.8%) from June
2000 when construction employment was at its peak for recent
According to the labor-backed Center for American Progress,
over time Michigan could get value of about $18 billion overall
from the federal stimulus, including money for state government
operations, increased jobless benefits and food stamps, health
insurance aid for the poor and jobless and a tax cut
More than $4 billion of Michigan's stimulus money is slated
toward just two areas: Medicaid and school spending. At press
time, details regarding how and when the entire stimulus package
for Michigan would be divvied up were scant and confusing. It
wasn't clear whether there would be more money available for
construction through areas like school work or green building.
The State of Michigan late last week was working on a website
to detail the stimulus spending.
The federal stimulus, said Michigan Gov. Jennifer Granholm,
will give Michigan's economy "the jump start it needs to
create jobs for today and tomorrow while providing a safety net
for our families during this national economic crisis."
the New, New Deal be enough?
By Robert Reich
Former U.S. Secretary of Labor
The stock market reached a six-year low today. Why? Some
blame loose talk (including that of former Fed Chair Alan Greenspan)
about nationalizing the nation's banks. Others blame Obama's
new plan for helping homeowners who may not be able to pay their
mortgages. But the real culprit is the accelerating decline in
aggregate demand - consumers, businesses, and exports. Companies
are losing money because their customers are disappearing. That's
precisely why the stimulus is so important - indeed, why many
of us fear it's too small.
One of the oddest of right-wing claims is that FDR's New Deal
didn't pull America out of the Great Depression, so Barack Obama's
"New New Deal" won't, either. While it's true that
the New Deal didn't end the Great Depression, three points need
to be impressed on the hard-pressed conservative mind:
1. The New Deal relieved a great deal of suffering by establishing
social safety nets - Unemployment Insurance, Aid for Dependent
Children, and Social Security for retirees. Most have remained,
a worthy legacy. But because the structure of the economy has
changed (a much higher percentage of the working population is
now employed part-time in several jobs or as independent contractors,
for example), there are gaping holes in the safety net which
a New New Deal should fill in order that the Mini Depression
we're experiencing not cause excessive harm.
2. FDR's public works spending did help the economy somewhat.
By 1936, U.S. the economy was showing some life. Unemployment
was declining and consumers were beginning to buy. But FDR cut
back on public-works spending, and the economy sank back into
its former torpor. A warning to Obama: Don't worry about so-called
"fiscal responsibility" when aggregate demand still
falls far short of the economy's total capacity.
3. The Second World War pulled the nation out of the Great
Depression because it required that government spend on such
a huge scale as to restart the nation's factories, put Americans
back to work, and push the nation toward its productive capacty.
By the end of the war, most Americans were better off than they
were before its start. Yes, the national debt ballooned to 120
percent of GDP. But the debt-GDP ratio subsequently declined
-- not just because post-war spending dropped but because the
economy continued to grow as war production converted to the
production of consumer goods. Lesson: The danger isn't too much
stimulus, it's too little stimulus.
touch for HealthSource
By Marty Mulcahy
SAGINAW TWP. - Another year, another phase completed during the
three-year, $44 million transformation and modernization of HealthSource-Saginaw.
The three-year-long demolition, renovation and expansion project
will result in a wholly changed HealthSource facility, which
provides psychiatric care, substance abuse treatment and medical
Last week, the trades and construction manager Spence Brothers
were wrapping up two of the facility's new pods, A and B, which
will allow the transfer of all inpatient services to newly constructed
areas. The new areas include patient rooms, medical rehabilitation
and skilled nursing care.
Early last winter, HealthSource was taking over the new psychiatric
portion of the facility to the hospital. When the project is
complete this year a "Main Street" will tie all elements
of the project together, including the previously completed C,
D, E and F pods.
The new facility will operate on a single level on space that
will replace a five-story hospital building - it's the victim
of having rooms that are too small and a layout that's inadequate
for modern health care. The entire project consists of construction
of approximately 169,310 square feet of new patient/resident/client
care facilities and renovation of an additional 47,630 of existing
"It's been a good project," said Assistant Project
Manager Herb Spence. "HealthScource is getting a nice, quality
SOCKET PLATES in the "A" Pod at
the HealthSource Saginaw project are installed by Andy Egerer
of IBEW Local 557 (foreground) and Todd Fink of IBEW Local 498.
They're working for Thiel Electric.
SETTING A SINK in a client room at the HealthSource
Saginaw project in B Pod is Rick Reid of Plumbers and Steamfitters
Local 85, working for Remer Plumbing.
lesson: Employee Free Choice Act 101
By Marty Mulcahy
The Employee Free Choice Act isn't on the general public's
radar screen, and it's also probably not much more than a faint
blip on the collective psyche of the nation's union workers.
But that's going to change throughout this year. Organized
labor's No. 1 legislative priority is also Public Enemy No. 1
for the Big Business community, which has pledged to spend about
$200 million in the media and elsewhere to beat up the Employee
Free Choice Act in the court of public opinion.
One of the ways labor is fighting back is through "Train
the Trainer" seminars held across the country. One of the
first in Michigan was conducted Feb. 16 by Mark Bott, lead organizer
for the Michigan State Pipe Trades. About 30 union representative
from various trades attended the seminar, held at the Plumbers
Local 98 Training Center in Troy.
"If you think Obama took heat over the stimulus package,
just wait 'till this comes up," Bott said. "Our strength
is in our numbers and we have to be able to mobilize our membership
to contact their lawmakers, because we know some legislators
are getting cold feet over this issue."
The Employee Free Choice Act represents an effort by unions
to simplify union organizing by allowing workers to form unions
in their workplace through majority sign- up, rather than through
a lengthy National Labor Relations Board election process. It
is hoped that passage of the EFCA in Congress will finally bring
about a major, lasting upswing in union membership in the U.S.
"We like driving the car," said Wal Mart CEO Lee
Scott, as reported in The Nation. "And we're not going to
give the steering wheel to anybody but us." Said AFL-CIO
director of government affairs Bill Samuels: I get the sense
that this is more important to them than even taxes or regulation."
Unions have long maintained that employers have the upper
hand in any organizing drive, with the ability to hold captive
audience meetings, coerce employees, and delay actions for years
with legal actions and appeals.
The business community takes the opposite argument. The ultra-conservative
Heritage Foundation wrote that "employers routinely refuse
to recognize unions on a card-check-only basis because publicly
signed cards do not reflect employees' preferences. Public card
signing exposes workers to pressure, harassment, and threats
from the union."
What's typically left unsaid in this argument by the Big Business
community, isn't the theoretical pressure and harassment by the
unions - but the real-life pressure and harassment by employers.
The AFL-CIO estimates that 25 percent of companies unlawfully
fire pro-union workers.
"The companies have all the power to decide whether to
hold an election or not," Bott said. "If there is an
election, beforehand they can add employees from the sales or
office staff to those who are voting, and tell them to vote against
the union. The system is broken. Coercion is rampant. They threaten
to shut the place down. They single out the loudest pro-union
employees and lay them off or fire them or transfer them. They
shoot the generals and the privates all fall in line because
they don't want the same treatment. It's illegal but it happens
all the time."
The EFCA would give workers a fair and direct path to form
unions through majority sign-up, help employees secure a contract
with their employer in a reasonable period of time, and toughen
penalties against employers (up to $20,000 for significant incidents)
who violate their workers' rights.
Big business opponents of the EFCA have employed what the
AFL-CIO has called a "one-note" strategy to derail
the labor law reform. Over and over in the past few months, letters
to the editor and editorials claim that the bill would do away
with secret ballot elections, while stressing that elections
without secret ballots are undemocratic.
In fact, points out the AFL-CIO's American Rights at Work
website, "a quick read of the legislation reveals that the
bill does not eliminate secret ballot elections." The Employee
Free Choice Act gives workers a chance to choose the method used
to vote for or against a union in the workplace: workers can
choose to cast signed paper ballots, or hold a formal election
process. In either case, control is taken away from business
owners and given to employees.
Organized labor wants to see the Employee Free Choice Act
taken up by Congress by Labor Day. Obama his signaled his support
for the bill - but how much he will lobby for it is unknown.
"Armageddon" was how a U.S. Chamber of Commerce
spokesperson described the upcoming battle. The Chamber of Commerce,
The Nation reported, "is fanning the flames on this, saying
this is the epic battle between labor and business," a key
strategist who favors the EFCA told the publication. "And
it scares the s--- out of the Obama people and some of the Democrats."
A GROUP OF building trades union representatives
listen to Mark Bott, lead organizer for the Michigan State Pipe
Trades, talk about the Employee Free Choice Act.
Michigan First' would put local workers first in line
LANSING - The House Labor and Commerce Committee sent
the "Hire Michigan First" job-creation plan to the
full House on Feb. 10, moving on legislation to ensure that Michigan
residents - not those from other states or countries - get first
crack at jobs created by taxpayer dollars. The plan will also
crack down on those that hire undocumented workers by canceling
their state contracts and tax incentives.
The legislation came up last year, also. The driving force
behind the Hire Michigan First policy is the state's approval
of a tax-free Agricultural Processing Renaissance Zone to support
the construction of an ethanol plant in Marysville. Despite the
state's support, an out-of-state company brought in its workers
from Texas for the project.
"Clearly business as usual is not working for Michigan
employees and businesses," said State Representative Fred
Miller (D-Mt. Clemens), the lead sponsor of the package. "With
unemployment reaching the double digits in Michigan, it's more
important than ever to make sure that Michigan tax dollars are
creating jobs for Michigan residents. In this economy, we must
fight for every single job."
The "Hire Michigan First" plan would:
- Award state tax breaks and other economic development tools
to companies that hire the most Michigan residents. This rule
would apply to projects handled by the Michigan Economic Development
Corp. and certain state-funded programs, including the Michigan
Economic Growth Authority, the Renaissance Zone Act and several
- Encourage transparency and accountability by requiring companies
that take economic development incentives to report on who they
hire to ensure that Michigan residents are put first.
- Crack down on companies that hire undocumented workers by
canceling their state contracts and tax incentives, requiring
them to pay back incentives they received and barring them from
The last provision is drawing fire from the Michigan Chamber
of Commerce. A spokeswoman told the Capitol News Service that
the legislation forces employers to be "immigration police."
The anti-union Associated Builders and Contractors of Michigan
also objects to the bill, because it doesn't address to their
satisfaction union contracts which allow the importation of out-of-state
workers to Michigan for jobs that require travelers.
Last year Republicans House members either "dissented"
or "abstained" from voting on the package of bills
that included the Hire Michigan First legislation. One Republican
legislator called it "an assault on free enterprise."
House Minority Floor Leader Dave Hildenbrand (R-Lowell) argued
that the state needs to have a better climate for companies to
"Rewarding companies that hire Michigan workers is a
common-sense solution," said State Representative Robert
Jones (D-Kalamazoo), the Chair of the Commerce Committee, which
approved the legislative package. "Michigan has the best
workers around, and they should get the first shot at doing the
jobs that their own tax dollars make possible. By getting more
folks back to work, we can help more families stay in their homes
and get our economy back on track much more quickly."