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Public Sector Environmentalists vs. Jobs

On October 24th I observed in the WSJ that private and public unions were increasingly in conflict this election season, particularly as left-leaning public union leaders align with members of the Democratic coalition like environmentalists, whose no-growth economic policies cost blue-collar workers jobs. One example I didn’t discuss in that piece is a campaign transpiring in California, where one of the state’s major public unions has joined with environmentalists to oppose a water bond that blue-collar labor groups have allied with business concerns to pass.

Proposition 1 is hardly an ideal infrastructure spending plan. It doesn’t devote enough money to water storage (dams and reservoirs), and it’s “greener” than previous proposed bonds (that is, it sets significant money aside for conservation efforts, though California isn’t going to conserve it’s way out of its current water woes).

But in a state suffering from water shortages in crucial agricultural areas, the plan to raise $7 billion for water projects has won support from an array of groups, including the Northern California Carpenters Regional Council, the SW Regional Council Of Carpenters, the Northern California District Council Of Laborers, and the The State Building And Construction Trades Council of CA.

Meanwhile, however, prominent among the opponents is California’s chapter of AFSCME, which is distributing a voting guide listing its opposition to the ballot measure, along with a host of environmental groups, who abhor the artificial lakes created by California’s dams and envision returning the flow of water to some natural state reminiscent of 19th century California, as Victor Davis Hanson has noted in City Journal. The environmentalists have succeeded in court partially blocking man-made diversions of water to farmers and drying up agriculture jobs in the process. Future development is also in doubt without better water infrastructure.

The larger issue is what role public unions have in spending members’ money for campaigns that go beyond labor’s purview representing the bargaining interests of government workers. As I wrote several years ago, as the labor movement has come to be dominated by public sector workers, it has moved increasingly to the left on social issues that often have nothing to do with representing their own workers. One shift that has increasingly put public unions in conflict with blue-collar types has been government unions’ embrace of environmentalism.

We’ve seen in it a number of other places recently.Unions like the Communications Workers of America, which represents government employees in New Jersey and other places, and the Amalgamated Transit Union, whose members are largely public sector transit workers, have joined environmentalists to oppose the Keystone XL pipeline, which trade unions have been lobbying to get built. In 2012, the Laborers International Union dropped out of the BlueGreen Alliance, a coalition of environmental groups and unions like CWA and SEIU, over their opposition to Keystone.

Even the AFL-CIO has withheld its endorsement of the pipeline. As one labor leader told theAmerican Prospect magazine in April of 2013, “In my 43 years in the labor movement, I can’t recall another time that AFL-CIO has remained neutral on any jobs program.” But the AFL-CIO, headed today by Richard Trumka, a former president of a public sector union (AFSCME), is a very different union from the one that George Meany once ran.

Some private unions have fought back aggressively. Chris Christie’s Democratic opponent in 2013, Barbara Buono, was universally backed by public unions and also earned endorsements from some of the nation’s biggest environmental groups after she promised to press ahead with efforts to lower carbon emissions in NJ. Some two dozen private unions supported Christie, and the leader of one told the press that the environmentalists backing Buono represented some of the “biggest enemies of any construction worker not only in the state of New Jersey but in the entire United States of America.”

There are some conservatives who oppose Prop 1 in California, but their opposition is to what they fear is waste and overspending in the bill, and its impact on the state’s budget. That’s not why the blue-green types are opposing the bill. They’d just as soon see development shut down in California, and limiting water supplies is a sure-fire way to do that. How that is also in the interests of government workers is anyone’s guess.

Steven Malanga is City Journal’s senior editor and a Manhattan Institute senior fellow. He is author of Shakedown: The Continuing Conspiracy Against the American Taxpayer, about the bankrupting of state and local governments by a new political powerhouse led by public-sector unions. He writes about the intersection of urban economies, business communities, and public policy. This article originally appeared on PublicSectorInc. and appears here with permission.

Unions Await Fantastic Return on High-Speed Rail Political Investments

It’s a heady time to be a top construction union official in California, as the California High-Speed Rail Authority presumably now holds proposals from as many as five design-build consortiums to build the first segment of the $68 billion project.

If this project moves forward, it will become part of the pantheon of huge American infrastructure projects that unions cite when they brag about the lasting accomplishments of union labor. And unions can also claim an essential role in the politics behind its advancement.

Even before Californians had a chance to vote directly on funding for High-Speed Rail, union-affiliated labor-management cooperation committees made massive campaign contributions to stop statewide ballot initiatives in the mid-2000s that would have given property owners stronger rights against the government’s power of eminent domain, as a result complicating the High-Speed Rail Authority’s land acquisition plans.

For example, the State Building & Construction Trades Council Labor Management Cooperation Trust contributed $1 million in 2006 to the campaign to defeat Proposition 90, a statewide ballot measure to strengthen property rights. And in the spring of 2008, the California Construction Industry Labor-Management Cooperative Trust contributed $250,000 to this No on 98/Yes on 99 campaign committee to oppose another statewide ballot measure to protect property rights.

These two union-affiliated committees are authorized under the obscure Labor-Management Cooperation Act of 1978, a federal law signed by President Jimmy Carter and implemented by the Federal Mediation and Conciliation Service. There are no federal or state regulations specifically addressed toward these trusts, and these trusts do not have any reporting requirements to the U.S. Department of Labor’s Office of Labor-Management Standards. Unions use these trust funds routinely now to fund campaigns for and against state and local ballot measures in California. 

When Proposition 1A was on the November 2008 ballot asking California voters to authorize borrowing $10 billion for the high-speed rail project by selling bonds, unions provided a substantial portion of the campaign funding. Leading the charge was the California Alliance for Jobs, another labor-management cooperation committee authorized under the Labor-Management Cooperation Act of 1978.

As shown in the Operating Engineers Local 3 Northern California Master Agreement (page 42) and the Northern California District Council of Laborers Master Agreement (pages 14, 26), construction companies belonging to various business trade associations must pay an amount to the California Alliance for Jobs trust based on the number of hours worked by each employee represented by the union. These amounts are incorporated into the state-mandated construction wage rates (so-called “prevailing wages”) as part of the “Other” category of payments. This ambiguous category of employer payments was implemented as California Labor Code Section 1773.1(a)(7-9) when Governor Gray Davis signed Senate Bill 868 in 2003.

Through contributions, a $100,000 loan, and in-kind/non-monetary gifts, the California Alliance for Jobs was able to assist the campaign to pass Proposition 1A with $616,500, comprising 23% of the total amount raised by Californians for High Speed Trains – Yes on Proposition 1A – A Coalition of Taxpayer, Business, Environmental and Labor Groups and People from Across California Tired of Being Stuck In Traffic.

The national headquarters and the Northern California and Southern California locals of the Operating Engineers union combined for another $575,000, the Laborers union chipped in $100,000, and the State Building and Construction Trades Council of California gave $75,000. 

Top Ten Contributors to the Main Campaign Committee to Pass Proposition 1A (Includes Loans and Non-Monetary/In-Kind Contributions)

1

California Alliance For Jobs Rebuild California Committee

Union-Affiliated Labor-Management Cooperation Committee

$616,500

2

International Union of Operating Engineers Construction Union

$250,000

3

Operating Engineers Local Union No. 3 (Union & PAC) Construction Union

$250,000

4

Professional Engineers in California Government (PECG) Public Employee Union

$183,493

5

California State Council of Laborers Construction Union

$100,000

6

Parsons Brinckerhoff Americas Inc. Construction Design & Engineering

$76,500

7

AECOM Tech Corporation Construction Design & Engineering

$75,000

8

International Union of Operating Engineers Local No. 12 Construction Union

$75,000

9

Members Voice of the State Building Trades Construction Union

$75,000

10

HNTB Corporation Construction Design & Engineering

$63,000

Union involvement in pushing the high-speed rail wasn’t over with the 2008 election. In 2010 and 2011, when the California High-Speed Rail Authority was stumbling under a confused business plan and skyrocketing cost estimates, the head of the State Building and Construction Trades Council of California and regional building trade unions submitted commentaries to newspapers defending the planned rail program. And as appointees to the Board of Directors of the California High-Speed Rail Authority, the head of the State Building and Construction Trades Council of California and a representative of the Operating Engineers union kept the votes coming to move the project forward.

Now the unions get the rewards. Section 7.11.3 of the Request for Proposal for Design-Build Services for the first segment of the California High-Speed Rail project stated that “Proposers are advised that, subject to FRA [Federal Railroad Administration] approval, the Authority intends to develop a Community Benefits Agreement consistent with the Community Benefits Policy adopted by the CHSRA [California High-Speed Rail Authority] Board at its December 6, 2012 meeting with which the Contractor will be required to comply.”

And Section 10.1 of the Request for Proposal states that “The Authority [that is, the California High-Speed Rail Authority CEO Jeff Morales] will not make a recommendation for award of the Contract [to the California High-Speed Rail Authority Board of Directors] unless the successful selected Proposer has submitted the following…A letter of assent executed by the Proposer agreeing to be bound by the Community Benefits Agreement.”

This “Community Benefit Agreement” is commonly known as a “Project Labor Agreement.” In fact, a “draft” Project Labor Agreement is included as Addendum 8 in the High Speed Rail Authority’s bid documents for the Request for Proposal. (See my comprehensive analysis of the union “Community Benefits Agreement” for the California High-Speed Rail and the subsequent rebuttal from the Building and Construction Trades Department, AFL-CIO national headquarters.)

For construction unions, California’s High-Speed Rail project will yield a fantastic long-term return for their political investment. It remains to be seen if taxpayers see any worthwhile returns on their “investment” in paying for it.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.

California’s “Prevailing Wage” – Floor Vacuuming at $45.93/Hour

California State Assemblyman Curt Hagman (R-Chino Hills) is introducing a bill to address one of the numerous absurdities in California’s prevailing wage law: the $38-46 per hour wage paid to laborers who clean up construction sites after taxpayer-funded construction is finished.

As revealed in a 2009 state wage enforcement action against a construction company working under a contract in the Antelope Valley Union High School District in Los Angeles County, such work entails “vacuuming, dusting, cleaning and polishing windows, walls and floors.”

Some Californians might consider $12 per hour to be a reasonable wage for this low-skill work, especially when so many school districts are funding massive building programs with borrowed money, thus taking on a staggering amount of debt for future taxpayers. Is it wise fiscal management for school districts to sell Capital Appreciation Bonds with outlandish compound interest payments in order to pay $45 per hour for someone to push a vacuum?

And in fact, the state does recognize a wage rate at about $12 per hour for janitorial work. California Public Utilities Code Sections 465-467 require public utilities to pay prevailing wage rates for labor of a custodial or janitorial nature, and therefore the California Department of Industrial Relations determines wage rates for this kind of work.

How Does California Now Determine Mandated Wage Rates for Construction Cleanup?

But vacuuming up the lingering sawdust at a construction site is considered a construction trade, because such work is classified within the work assignments listed in the applicable collective bargaining agreements of the Laborers Union.

Under Section 1773 of the California Labor Code and Title 8, Subchapter 3 of the California Code of Regulations, the State of California determines “prevailing wage” rates in most cases by obtaining the union collective bargaining agreements for each trade in each geographical region of the state, adding up all of the payments indicated in these agreements, and declaring the total to be the “prevailing wage.”

Wage rates include fringe benefits and employer payments to “other” funds that do not directly benefit the employee. And the same wage for the same work applies to non-union workers.

For Southern California, the Department of Industrial Relations sets the total straight time hourly “prevailing wage” for a journeyman in the Group 1 classification of “Laborer, General Cleanup” at $45.93.

This amount is based on the following payments in the collective bargaining agreement negotiated between the Southern California District Council of Laborers and three contractor associations – Associated General Contractors (AGC) of California, Building Industry Association (BIA) of Southern California, and the Southern California Construction Association:

  • $28.09 in basic wages
  • $6.81 to the union health and welfare program
  • $6.00 to the union pension program
  • $3.90 to the union vacation and holiday program
  • 64 cents to the union apprenticeship program
  • 49 cents for “other” payments that go to a variety of union-managed funds not for the direct benefit of the employee.

For Northern California, the state-mandated total straight time hourly “prevailing wage” rate for a journeyman in the Laborers Group 4 trade classification applies to the following:

Final cleanup on building construction projects prior to occupancy only. Cleaning and washing windows (new construction only), service landscape laborers (such as gardener, horticulture, mowing, trimming, replanting, watering during plant establishment period) on new construction.

The total straight time hourly wage for that classification is $39.02 in the San Francisco Bay Area and $38.02 in other counties of Northern California. These amounts are based on the collective bargaining agreement negotiated between the Northern California District Council of Laborers and Associated General Contractors (AGC) of California.

In San Diego County, the state-mandated total straight time hourly “prevailing wage rate for a journeyman in the Group 1 classification of “Laborer, General Cleanup” for commercial building is $43.27. This amount is based on the collective bargaining agreement negotiated between the Southern California District Council of Laborers for San Diego County and Associated General Contractors – San Diego Chapter.

What Are the Chances of Establishing a Reasonable State-Mandated Wage Rate for Construction Cleanup?

If you were an official or lobbyist for the Laborers Union in California or for the State Building and Construction Trades Council of California, would you give permission to Governor Jerry Brown and the Democrats in the legislature to undercut the high wage rates that your union negotiated with union contractors for “vacuuming, dusting, cleaning and polishing windows, walls and floors?” Of course not!

In negotiating their collective bargaining agreements, construction trade unions actually enjoy a kind of quasi-regulatory authority, because their final agreements are the basis for the state-mandated construction wage rates. They are loath to compromise this power.

In the 2011-12 state legislative session, Assemblywoman Shannon Grove (R-Bakersfield) introduced Assembly Bill 987, a comprehensive and technically-precise bill that would have reformed the state’s calculation of prevailing wages so that state-mandated construction wage rates are reasonably accurate and based on actual local market conditions. The Assembly Labor and Employment Committee rejected the bill on a party-line vote: Republicans in support, Democrats opposed.

Regarding the specific wage rate for construction cleanup, taxpayers could adopt several strategies in addition to Assemblyman Hagman’s legislation in order to prod the California Department of Industrial Relations to determine a reasonably-accurate state-mandated wage rate for “vacuuming, dusting, cleaning and polishing windows, walls and floors.” But unions will resist any challenge to the status quo, unless they exercise their own power to negotiate and accept a special construction cleanup classification – with more common sense wage rates – in their own collective bargaining agreements.

Kevin Dayton is the President and CEO of Labor Issues Solutions, LLC and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com.