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Eye Construction, Inc.

Bargaining hunting

After doling out $450 million in 2008 to elect Democrats in Washington, unions are looking for payback

Issue: "Save the unions," Oct. 24, 2009

WASHINGTON-A $35 million Job Corps Center commissioned by the Department of Labor will be going up soon in Manchester, N.H., but don't expect everybody in the state to be happy. Only unionized construction workers will be allowed on the site, according to restrictions the federal agency imposed on the project.

Sen. Judd Gregg, R-N.H., protested, saying that because very few construction workers are unionized in the state, local firms would not be able to meet the requirements for the bid, which further requires that the contractor has done three projects under the same rules. Of the 37 contractors listed as interested in the project, five are New Hampshire businesses. (Bidding begins Nov. 5.)

"In a time of economic hardship, it is simply absurd to discriminate against local contractors and construction workers for the benefit of national labor unions," Gregg objected in a statement.

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The Manchester Job Corps Center requirement is an example of what critics say is a larger trend: Unable to keep union membership from a long-term decline, big labor is counting on a friendly administration and Congress to make workplace changes in its favor. And this is bad news for many of the independent business owners who drive economic growth.

The New Hampshire dispute flows from an executive order President Barack Obama issued soon after he took office to encourage federal agencies to award contracts higher than $25 million to firms working under project labor agreements (PLAs). PLAs essentially require unionized contractors, excluding 84 percent of construction firms. The president's order said PLAs keep labor disputes from interrupting construction.

Awarding contracts to unionized businesses means much of one of the hardest-hit sectors of the economy, construction, isn't benefiting a lot from the steadier flow of federal projects or government stimulus efforts-$111 billion of the stimulus is designated for public infrastructure projects. Construction businesses were some of the first to feel the economy's free fall but haven't been the first to recover. Nationally, the unemployment rate in construction is at 16.5 percent, compared to the overall unemployment rate of 9.8 percent.

Bethesda-based Miller & Long Concrete Construction pours, forms, places, and finishes concrete. One of the largest concrete subcontractors in the country, it opened its doors in 1947 and employed 3,300 at its peak in early 2008. Now it employs 1,100. Vice president Brett McMahon asserts that unionization would force the company, already operating on razor-thin profit margins, to shut its doors.

"We're quite serious about that," he told me. "The risks are too great. It would wipe out everything we've built over 62 years." In the past some have attempted to unionize the business, but McMahon said management has a "cozy, constant" relationship with employees. "We take very good care of our folks."

"If other people got organized, and we didn't, we'd be all the more competitive. But the government will change the rules again to favor the organized companies," he said with resignation. "They've shown a wanton willingness to do that."

Businesses like Miller & Long fear unionization because it raises one of their primary costs, labor. Unions typically require better wages and benefits, often including contributions to union pension funds. Workers siphon dues from their paychecks, which go to unions' leadership and political efforts unless workers request otherwise.

"It's not unusual for unions to make concessions to save companies," counters Stewart Acuff, assistant to the president of the AFL-CIO, the largest union organization in the country. But overall union membership has dropped in recent decades to 12.4 percent of American workers from 20 percent in 1983, as manufacturing has moved abroad. In 2008, however, unions grew by 450,000 members, though mostly in the public sector.

Labor groups spent around $450 million on the 2008 election, almost exclusively for pro-union Democrats, and to great success. A Democratic Congress could help expand union rolls through the "card check" provision in the Employee Free Choice Act (EFCA), which removes the secret ballot in union elections. That provision has hit a bump in the Senate, however, and may not appear in a final version of the labor reform bill, which Obama has promised to help pass.

As it stands now, EFCA allows the government to inject itself into certain labor disputes further through binding interest arbitration-a remedy where a government arbitrator oversees talks and imposes a contract at the end, to which employers must agree because the talks are "binding"-a puzzling arrangement to employers because they are the only ones in the talks who must meet a bottom line.

Rian Wathen, a former union organizer who now works with employers to campaign against unions, said unions will have the incentive to "ask for the moon."


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