The American Institute of Architects is confidently projecting strong growth in nonresidential construction this year and next, with increase of 5% in 2013 and 7.2% in 2014. Commercial construction is expected to lead the way in growth, followed by industrial work, while institutional construction will grow at a slower pace. The AIA is basing its predictions on a comparison of its own "Architecture Billings Index" with forecasts from six different industry groups. The consistency in forecasts leads them to believe they will be very reliable.

David Rampone, President of Hart Engineering, a signatory contractor based in Cumberland, Rhode Island isn't shy about being a union contractor. Last year he volunteered to be one of the latest union contractors to do a radio ad on behalf of the New England Regional Council of Carpenters. Now, he's published an opinion piece in the Providence Journal explaining why his business is better with a union partnership. Click through to read it.

The following opinion piece appeared in the January 10 print edition of the Providence Journal-Bulletin.

The benefits of employing unionists

DAVID RAMPONE

Regarding Charles Chieppo’s Dec. 20 column, “Unions are 1 percenters in Mass.,” in which he portrayed the construction industry inaccurately:

As the chief executive of a major Rhode lsland construction firm that does work all over New England, I’ll set the record straight. I am the president of Hart Engineering Corp., a general and process mechanical contractor founded over 70 years ago and based in Cumberland.

While I have read several opinion pieces by “public-relations experts” articulating the “evils” of the unionized construction industry, it needs to be pointed out that these experts have no actual experience in the construction industry and draw their conclusions based purely on anecdotal information provided by those who wish to see the unionized construction industry fail.

For the record, the National Labor Relations Act lets construction companies decide for themselves whether to be affiliated with the industry’s trade unions. It is the only industry that has such a provision. Since its inception, our firm has made the business-driven decision to be affiliated with several trade unions — a decision that has been beneficial to both our company and employees.

Currently we employ more than100 union tradesmen and women on dozens of jobs, large and small, throughout New England. These employees receive a fair wage, full health-care benefits and pension contributions — a package that lets them provide their families with a respectable standard of living. And in light of the negative attention cast on public-sector unions in these times, note that unionized construction workers are not guaranteed employment. In fact, Rhode Island unionized construction workers average about 1,500 hours worked a year. They do not receive vacation time, sick days or holiday pay, nor do they receive any benefits if they do not work the required number of hours a year — usually between 1,200 and 1,400, depending on the trade union involved.

Beyond my own company, the performance of Rhode Island’s trade unions and union contractors speaks for itself. There are more than 200 local contractors with union agreements in the Rhode Island area, and there have been more than 50 all-union project labor agreements (PLAs) worth billions of dollars completed in this area, including most of the state’s highest-profile projects. Most of these PLAs have been in the private sector.

These agreements symbolize the marketplace at work. Owners, construction managers and contractors enter into these agreements for one reason only: It is in their best interest to do so. And why? The trade unions in partnership with their contractors invest millions of dollars annually recruiting, training and retraining their workers to provide the safest, most skilled workforce in our industry. In today’s world, owners want their projects completed safely, on time, under budget and to the highest level of quality possible. That is why owners from small firms to Fortune 500 companies enter into project labor agreements.

While there are far fewer PLAs in the public sector than in the private sector, they are becoming more prevalent. However, before any public entity in Rhode Island can implement a PLA, it must complete an independent “objective and reasoned” study that recommends their use.

The trade unions’ record of providing contractors and owners with a safe and productive workforce is unmatched in our industry. Those who oppose them assert that using nonunionized workers would provide the owner with great savings. Unfortunately, those savings are usually the result of substandard wages, failure to provide health-care benefits to employees, or misclassifying employees to pay them a lower wage.

For 70 years we have provided our clients with the safest, most capable and productive work force in the industry, and our employees with a fair wage and benefits for them and their families. We are proud of what we have been able to achieve with our union partners.

David Rampone is president of Hart Engineering Corp., in Cumberland.  

News from the US Department of Labor on construction employment was slightly positive in October with the addition of 17,000 jobs in preliminary data. Jobs in the construction industry increased for the fifth consecutive month, reaching 5.53 million. The trend that could continue following rebuilding efforts tied to Hurricane Sandy.

The industry still has a ways to go to reach employment levels enjoyed before the recession. Seasonally-adjusted employment numbers showed more than 7.7 million construction jobs through much of 2006, but then heavy, steady job losses in the industry from October of 2008 through February of 2010s. Since then, employment numbers in the industry have varied month-to-month between 5.45 and 5.56 million jobs.

The Department of Labor's Bureau of Labor Statistics' website has an interesting graph and table tracking seasonally adjusted jobs in the construction industry, starting in January 2002.

More than 75 carpenter stewards in Connecticut from Locals 24, 43 and 210 gathered last night to talk about upcoming elections in the state that could have a significant impact both locally and nationally. A United States Senate race between Congressman Chris Murphy and second-time candidate Linda McMahon of the WWE wrestling company is one of a handful of races in the country that could tilt the balance of power in the Senate. Members are also active in other races in the state.

After discussing issues of importance to union carpenters, the conversation turned to getting as many members active as possible. Stewards returned to jobsites today armed with information and schedules. The information is to educate fellow carpenters about the issues and the candidates, the schedules were for events at which members will reach out to even more members. Between now and Election Day on November 6, members will be participating in phone banks to contact registered members and talk to them about the importance of the election to their families, our union, the economy and the construction industry.
Members interested in participating in scheduled activity should contact their Local Union hall for dates and times.

Governor Deval Patrick yesterday announced a boost to funding for new buildings on state college campuses, a positive steop to boosting infrastructure, education and employment in the construciton trades.

The announced investment of $2.2 billion financed through bond sales will lead to $20 million worth of building at Roxbury Community College and $607 million in construction at University of Massachusetts campuses will including:

--A new Physical Science Building at the University of Massachusetts Amherst currently estimated at $85 million that will accommodate enrollment growth and higher demand in science programs, helping achieve the University’s long term goal to improve all science facilities, increase retention and attract the highest caliber faculty and students;
--A new Management Building for the Manning School of Business (MSB) at the University of Massachusetts Lowell which leverages approximately $10 million in private donations to support the $35 million project; and
--A new academic classroom building at the University of Massachusetts Boston, estimated at $100 million to help address the demands of continued enrollment growth at the University and the drive to provide an academic setting in which cutting edge teaching techniques can be accommodated.

In new report card, Republican Scott Brown fails to support new jobs and Massachusetts’ middle-class

Today, the New England Regional Council of Carpenters issued a report card on Senator Scott Brown’s failing efforts to support job-creating programs and middle-class families across the Commonwealth. Senator Brown received an F on today’s report card for opposing numerous jobs bills that would have supported thousands of good-paying jobs in Massachusetts, opposing the extension of essential unemployment benefits, and failing to fight for fair wages for working men and women.

"Try as he may, Scott Brown cannot run away from his votes along national Republican Party lines,” said Mark Erlich, Executive Secretary-Treasurer of the New England Council of Carpenters. “Whether it's unemployment benefits, jobs bills, or standing up for fair wages, Scott Brown is not on the side of working families right here in Massachusetts. The attempts to re-make his image cannot mask his record. He sides with huge corporations and Wall Street instead of the thousands of Massachusetts families still looking for jobs.”

Today, the New England Carpenters gave Senator Brown an “F” for failing to stand up for working families. The grade was based on the following key votes: 

The New England Regional Council of Carpenters, along with the Massachusetts Building Trades Council and the Massachusetts AFL-CIO, officially announced their support of Democratic U.S. Senate candidate Elizabeth Warren's "Rebuild Now" infrastructure investment plan.

Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters, and Frank Callahan, president of the Massachusetts Building Trades Council ,told reporters that the industry needs a boost and that a plan like Warren's has the potential to put its members back to work.

Read more online here.

The Boston Globe reports on economic concerns in Massachusetts, where a net reduction in jobs occurred for the first time since November. Though the unemployment rate is fairly steady, concerns are mounting that the slow recovery could be slipping away. NERCC's Mark Erlich is quoted.

While Republicans Governors and legislatures in the United States mounted a withering attack on public sector workers in 2011, rates of unionization among workers in the country remained steady, with some potentially positive signs for the future.

John Schmitt and Jannelle Jones from the Center for Economic Policy and Research broke down the numbers (reporduced in a post on truth-out.org over the weekend). In the public sector, the number of union members declined slightly in 2011, but union density went up. In the private sector, which has seen a greater decline in union members and union density over the years, the number of union members went up with union density holding steady.

The numbers indicate that even though there are fewer union jobs in the public sector, union jobs are being cut at a lower rate than nonunion positions. The increase in the number of union jobs in the private sector is also a positive indicator that anti-union efforts were not as successful in 2011.

Time will tell if the numbers indicate a reaction to attacks on union rights, which exploded on the public scene in Wisconsin and other states early in 2011 or a manifestation of the same frustration with economic inequality that spurred the "Occupy" movements later in the year. But they are good news for American workers.

Fifty millworkers who are members of UBC Local 8093 working for Indiana Limestone Company have been on strike through the holidays after unanimously rejecting a concessionary contract. Difficult economic times have forced many Americans and union members to watch wages and working conditions slip backwards. And though they have not blindly agreed to every concession demanded of employers, union members and Americans have been flexible and realistic in working with employers to strike a balance between business viability and protecting a decent standard of living.

What's at play in Indiana, though, may have less to do with recent economic conditions than it does with the move my many American businesses from family run and privately owned to investor owned or publicly traded.

A piece by Joseph Varga for LaborNotes explains.

Resilience is the new player in Indiana’s limestone industry. Like Mitt Romney’s Bain Capital, Resilience specializes in “flipping” mid-range “stressed” companies like Indiana Limestone. The private equity firm buys them up, strips them down, lowers their labor costs, and sells them to investors.

It’s the same process that has occurred throughout the country for the past 30 years, turning family-owned businesses into “lean and mean” concerns, in the process destroying good union jobs and shrinking the tax base in communities that are struggling to survive.

While company officials make the usual statements about being fair-minded corporate citizens, the fact is that there had been only one other brief strike in Indiana Limestone’s long history, while in two years Resilience had made it clear it was only about lowering costs in order to resell.

According to the article, among the concessions sought by Resilience are elimination of "just cause" standards for discipline and an end to safety meetings, though the work done can be extremely dangerous.

Varga's piece goes on to detail the context in which the strike is taking place. The state has been at the forefront of battles over rescinding collective bargaining rights and enacting so-called "right to work" laws. It has also seen some pushback from workers--both union and nonunion--as well as younger citizens who have become involved in the "occupy" movement.

New understandings and alliances have been forming between the workers and young people eager to get involved and make a lasting difference in the future.

There's no happy ending to the story, at least yet. And there may not be. But one can't help feeling there could be better results in the future if the conversations between workers and their neighbors continue, creating a better understanding of each other and the common problems they face.

The Nashua Telegraph yesterday published a piece by Mark Mackenzie, President of the New Hampshire AFL-CIO calling for a New Year's resolution to help workers in 2012. The piece was a good summary of what workers want and deserve, but aren't gettingin today's America. Click through to read the piece and consider sharing it with others.

Earlier this week, President Barack Obama gave a speech in Osawatomie, Kansas. The full text of the speech is available here on the Washington Post’s site. It’s worth reading at least a bit of it because it’s widely believed it contains the major themes Obama plans to feature in his re-election bid next year. That should be good news for most Americans.

The speech references President Teddy Roosevelt, who not coincidentally gave a significant speech in Osawatomie himself, and compares some of the philosophies and battles Roosevelt took on when he was president to current day issues to which Obama seems to be rededicating his efforts. The speech references both Tea Party and Occupy movements, taking advantage of the change in the national political dialogue perhaps begun by the former and energized by the later. The themes and principles Obama espouses and recalls from Roosevelt will sound familiar to most union members, making it that much more meaningful that they are coming from the President of the United States.
 

If you think a crackdown on illegal immigrants will help Americans by opening up job opportunities, you may be right. But it's not going to help most unemployed Americans. What it might do is reveal some of the real reasons immigration reform has been stalled: employers really like very cheap, very vulnerable workers. Have you heard what’s going on in Alabama, where immigrant farm workers have fled after a tough new immigration law was passed? Here’s a hint: it isn’t lower unemployment and higher wages.

The AP reports.

There's plenty of reasons the "haves" should care about the "have nots." They're not all humanitarian, moral or have anything to do with preventing a violent revolution. Richard Wilkinson gives a very informative, but easy to understand 15 minute talk about the increased problems faced by everyone in countries with greater income inequality compared to people living in countries with lower levels of income inequality.

The Boston Globe on Obama's speech tonight.

"Obama is likely to offer a package of ideas that would affect people in their daily lives -- tax relief, unemployment insurance, spending to support construction jobs, aid to states to keep people in their jobs."
.....
"White House officials said Obama would formally send his plan -- coined by the administration as the American Jobs Act -- to Congress next week."
.....
"In one upbeat sign for those looking for a Washington compromise, Boehner and House Majority Leader Eric Cantor have told Obama they see potential areas of agreement on jobs -- for example, infrastructure, which Obama has pushed repeatedly. Cantor also signaled to reporters Wednesday that he might support a payroll tax cut."

The decline in union membership in America accounts for a lot of the rise in income inequality, according to a new study by Harvard sociology professor Bruce Western.

“Our study underscores the role of unions as an equalizing force in the labor market,” said study author Bruce Western, a professor of sociology at Harvard University. “Most researchers studying wage inequality have focused on the effects of educational stratification—pay differences based on level of education—and have generally under-emphasized the impact of unions.”

From 1973 to 2007, wage inequality in the private sector increased by more than 40 percent among men, and by about 50 percent among women. In their study, Western and co-author Jake Rosenfeld, a professor of sociology at the University of Washington, examine the effects of union decline on both between-group inequality and within-group inequality. Between-group compares people from different demographics and industries, while within-group looks at people from the same demographics and industries.

Focusing on full-time, private sector workers, Western and Rosenfeld find that deunionization—the decline in the percentage of the labor force that is unionized—and educational stratification each explain about 33 percent of the rise in within-group wage inequality among men. Among women, deunionization explains about 20 percent of the increase in wage inequality, whereas education explains more than 40 percent.

The Boston Globe reports that construction could be experiencing a slight bounce.

Developers across the Boston area are moving forward with a number of large construction projects that were stalled by the recession, creating thousands of jobs and ending one of the state’s most prolonged building slumps.
~~~~
But the impact on jobs will not be immediate, as many developers still must clear other obstacles before starting construction. And while some projects are moving forward, many others remain stalled or are barely inching forward, leaving union leaders skeptical that the recovery will proceed fast enough to help the long-term unemployed.

“I’ve been at a number of groundbreakings where pictures are taken and the right things get said, but then nothing happens,’’ said Mark Erlich, executive secretary of the New England Regional Council of Carpenters. “The iceberg is melting, but icebergs melt slowly.’’

Vanity Fair has posted an interesting article on income inequality in the United States. It is based on the alarming fact that 1% of the population in the United States control 40% of the nation's wealth. Below is a taste. You can read the entire piece here.

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

Nearly three hundred people, including representatives from Carpenters Local 24, gathered last week at a hearing in New Haven, Connecticut, to urge stat Banking Commissioner Howard Pitkin to reject Buffalo-based First Niagara Bank’s proposal to purchase NewAlliance Bank, which is headquartered in New Haven.

First Niagara President and Chief Executive Officer John R. Koelmel is seeking state regulatory approval for a merger that would make NewAlliance part of First Niagara.

Opponents of the $1.5 billion deal point to First Niagara’s poor community lending record, while New Haven leaders have suggested concessions, including significant contributions to the city’s school reform and technology-oriented economic development efforts.

NERCC Organizers in Connecticut worked together to reach out to members living in New Haven asking those interested to attend the hearing.

“We reached out to members living in New Haven, because this is the city that will be most directly impacted by this merger,” notes Tim Sullivan, NERCC Organizer. “We had an outstanding turnout by our membership, with over seventy-five members joining us at the hearing.”

As part of First Niagara’s business plan, the bank will make more than $1 billion in Community Reinvestment Act loans and other economic development initiatives within NewAlliance’s market over the next five years. CEO Koelmel claims the merger will help the local community with more dollars invested locally, more philanthropic giving and more community sponsorship.

However, at the four-hour hearing held on Wednesday, speakers argued that the deal would destroy local jobs. While First Niagara said it will not close any of the 88 NewAlliance branches, they will eliminate over 200 jobs, making the claim that many will be added back by the end of next year. There is also great concern that the deal will dry up mortgage and business loans for low- and moderate- income residents. People also fear that many economic decisions would be made hundreds of miles away in Buffalo, NY.

In his remarks given at the hearing, Sullivan emphasized the impact this may have on construction in the area. “We do not want to see cranes become an endangered species in this vibrant city. We are very opposed to the loss of local control on loans and decision on capitol. We need a local partner in local decisions, not an entity in far away Buffalo…We are an industry very dependent on finance and the carpenters will not stand by silently when we see a potential for problems.”

Additionally, opponents emphasized that while NewAlliance has received “outstanding” Community Reinvestment Act rating, First Niagara routinely earns “satisfactory” ratings. Opponents fear the bank’s rating would be lowered if purchased by First Niagara.

Speakers at the hearing also pointed out the estimated $23 million payout departing CEO Peyton Patterson stands to collect in the deal. Four bank directors would collect a combined $17.4 million. This is money many feel should stay in New Haven to support affordable mortgages and small-business loans.

As Sullivan remarked, “this [payout] does not seem to be in the interest of consumers, stockholders, or government. It could mean 600 fulltime jobs…It could mean a number of meaningful investments. It could mean police on the street, teacher aides in classes. This payout does no create new meaningful jobs in Connecticut. What it means is a wholesale layoff of Connecticut workers, higher rates and/or new fees for consumers and a fat payday for Peyton.

Pitkin said he would review the statements made during the hearings, and any other documents the public might wish to provide him with about the proposed merger, and then make a decision. In addition to approval from the Connecticut Department of Banking, the Federal Reserve Board and the Office of the Comptroller of the Currency must also approve the merger.

The Wall Street Journal (subscription required) reports a significant increase in construction lending by major institutions, which is getting stalled projects back underway.

An influx of fresh capital into U.S. commercial real estate is bringing some long-stalled development projects back to life and launching new construction of apartments, office buildings and shopping centers.

The moves show that the industry, in a deep slump just a year ago, has entered recovery mode—at least in the nation's largest and healthiest markets. Analysts say the improved economy is giving rise to pockets of demand for new commercial space, while low yields on other investments prompt investors to seek higher returns in real estate.

The nascent turnaround comes even though many U.S. banks still are slogging through billions of dollars in bad commercial-real-estate loans, a big cause of bank failures. Still, some of the largest U.S. banks are tiptoeing back into commercial real estate.

J.P. Morgan Chase & Co. financed as much construction lending in the first six weeks of 2011 as the nation's second-largest bank by assets did in all of last year.

The Boston Globe today published an opinion piece by Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters.

Please read and share.

Scapegoats in Wisconsin
Why is the middle class demonized when Wall Street is the problem?

WE ARE in the third winter of the recession; 26 million Americans are out of work, cannot find full-time work, or have given up looking for work, and $11 trillion in household wealth has vanished.

As winter turns to spring, there is an evolving perspective on the crisis, shifting from an attempt to identify the causes to blaming the victims.

Congress is aggressively looking to eliminate regulatory excesses that are presumably hindering economic recovery only weeks after the Financial Crisis Inquiry Commission, appointed by Congress in 2009, issued a report concluding that the crash was caused by 30 years of deregulation, the stripping of key safeguards, and an overly optimistic reliance on self-regulation by large financial institutions. If the Republican approach were part of a homicide investigation, it would be as if the detectives had removed the smoking guns from the perpetrators’ hands and arrested the corpses.

Wisconsin is only the most dramatic site of a broader strategy of absolving Wall Street and scapegoating public employees and their unions. While there are legitimate and critical public policy issues about education reform, spiraling health costs, and pension liabilities at a time of state and municipal budget deficits, why is the fault laid at the feet of teachers, police, and firefighters? Today’s pension obligations are the product of massive investment losses, not excessively generous public pensions that, in fact, average about $19,000 a year. For that matter, a 2010 Economic Policy Institute study showed that, controlled for educational achievement, public sector workers actually earn less than their private sector counterparts.

With corporate profits at record levels, strong bank balance sheets, along with the return of large compensation packages in the financial sector, the commission’s reminder that the continuing devastation of the crisis was entirely avoidable is worth remembering. It was not the invisible hand of the free market but rather “the result of human action and inaction,’’ a reckless environment in which the five major investment banks had leverage ratios (assets protected by capital) as high as 40 to 1.

For a brief moment after the economy fell off the cliff, the excesses of financial manipulations put broader social and economic questions back on the table. Why, for example, does the United States rank 31st out of the world’s 33 most advanced economies in terms of income inequality, more unequal than Third World countries such as Guyana, Nicaragua, and Venezuela? Why, according to the Census Bureau, has inequality increased by 22 percent, and why have the wealthiest 5 percent expanded their share of total income by 32 percent since 1980? And why, during the same period, has average family income climbed less than 1 percent a year, especially when there are far more two-income earners in most families?

The emergence of an American middle class coincided with the growth of unions, and the rise in inequality has accompanied their decline. The myth of the American dream, of the United States as a meritocracy in which economic opportunity is universally available, has never been more in question. Children from upper income families are now 20 times more likely to have high incomes of their own than children from low income families. Classic rags-to-riches stories are limited to professional athletes, celebrities, and fortunate individuals who manage to beat the odds.

Why does the gulf in economic equality matter? Research has repeatedly shown that negative indicators for health, educational performance, economic mobility, and a broad array of social issues are correlated with income inequality. The more unequal a society, the less likely its citizens will have a stake in pulling in the same direction. A generation ago, non-union workers often welcomed news of improved wages and benefits for unionized employees, recognizing that a rising tide lifts all boats. But today’s waters are murkier. At a time of sacrifice and insecurity, many would prefer to sink their neighbor’s slightly bigger boat while wistfully hoping for a glance at a yacht in a gated marina.

The demonization of public employees is a calculated strategy to steer the political spotlight away from those who brought us the recession. If the focus is not shifted back to the root causes of the crisis, in the words of the commission, it will happen again.

Mark Erlich is executive secretary-treasurer of the New England Regional Council of Carpenters.

Banker and Tradesman details the January construction jobs numbers released by the Associated General Contractors and they are not good.

Unemployment in the industry nationwide rose from December to January, to 22.5%, with the loss of 32,000 jobs. The story noted that:

"...the industry's job losses came from the nonresidential construction sector, which lost 35,300 jobs between December and January, while the residential sector added 3,500 jobs. Nonresidential specialty trade contractors were hardest hit, losing 21,000 jobs. Heavy and civil engineering construction lost 7,000 jobs."

The Quincy Patriot Ledger yesterday published a story about prospects for the construction industry in 2011, featuring optimistic views by contractors.

Among those quoted were Lee Kennedy, CEO of Lee Kennedy Co:

“The public (projects) have been carrying the ball for the last two years, but people seem to be more confident on the private side,” CEO Lee Kennedy said. “We’re expecting there is going to be job improvement, and we think that’ll translate into some additional office space.”

Robert Reich, the former U.S. Secretary of Labor is a frequent commentator on the economy, economic policy and how it affects American workers. In a piece following up on President Barack Obama's State of the Union address, Reich argues that America essentially now has two economies--one for corporations and one for the rest of the country--and only the first is experiencing legitimate economic recovery.

The piece can be found at the site of the New Haven Register.

Corporations are profiting from sales of their foreign operations, especially in China and India. Here, they’re selling to rich Americans — Christmas sales at Tiffany & Co. and Neiman Marcus were up, but sales have been down for downscale retailers.

Reduced costs — especially shrinking payrolls — have been the most important key to the rise in corporate profits, though. The result has been fewer jobs and lower pay.

The Great Recession accelerated trends that started in the 1980s — outsourcing abroad, automating work, converting full-time jobs to temps and contracts, undermining unions and getting wage and benefit concessions from remaining workers. The Internet and software have made all this easier.

The U.S. economy is now twice as large as it was in 1980, but the real median wage has barely budged. Most benefits of economic growth have gone to the top. In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession, they received more than 23 percent. Wealth is even more concentrated.

You can be forgiven if you think this article came from The Onion, rather than the Wall Street Journal, but it appears to be completely legit.

Leather-goods maker Coach Inc. plans to gradually move some production out of China, where labor costs are rising, and into lower-cost countries, such as India and Vietnam.

At the same time, China is proving a boon to Coach's sales, as residents that have become more affluent buy the retailer's status-symbol bags. Comparable-store sales grew by double digits in China, which Chief Executive Lew Frankfort called "our fastest-growing business."

In the second edition of White House White Board, Austan Goolsbee, Chairman of the Council of Economic Advisers, looks back at the President’s record on the economy through the perspective of the last three years in private sector employment.

From WhiteHouse.gov.



"Here’s the bottom line: when President Obama came into office in January of 2009, we were in the middle of the worst economic crisis this country has seen since the Great Depression. Through the Recovery Act, tax credits for working families and small businesses, and investments in the industries of the future, we are getting back on the right track. We went from losing nearly 800,000 jobs in a single month as the President came into office to our ninth straight month of private sector job growth last month.
We still have a lot of work to do. Times are still tough for millions of Americans who are out of work, and we’re not going to rest until those folks can find a job.
"

Mark Erlich, head of the New England Regional Council of Carpenters, chimes in on a story about the distribution stimulus money in Massachusettsin a story by Jay Fitzgerald of the Boston Herald.

“When they put together the stimulus program a year ago, they were talking about ‘shovel-ready’ jobs and a second WPA,” said Mark Erlich, head of the New England Regional Council of Carpenters, referring to the Works Progress Administration’s building programs during the Great Depression. “That clearly hasn’t happened.”

Stop us if you've heard this one before. The Christian Science Monitor has run a story saying that American workers are creating more wealth through productivity, but getting a far smaller share of the wealth they create.

American labor isn't getting its full share of the nation's output.

Indeed, its share is at a "record low," says Charles McMillion, chief economist at MBG Information Services, a Washington consulting firm. "Labor has no leverage." So wages have been "depressed, stagnant, or falling" for some 30 years.

Much of that lost compensation went to business and its owners. Last year, for example, businesses raised workers' hourly pay a little (2.2 percent) but cut their hours a lot (5.1 percent). The result? The remaining workforce became considerably more productive, creating more goods and services per hour worked.

Ideally, business and labor would share about equally in productivity gains. Over the past three decades, though, business has reaped the bigger share. For every dollar of goods and services the United States produced in 1974, all employees reaped about 59 cents. Last year, their share had fallen to 55 cents. In a $14 trillion economy, that amounts to hundreds of billions of dollars in lost wages every year.

Leading up to the State of the Union address last night, there was some good economic news on the economy told by MSNBC's Rachel Maddow. No, money for construction projects are not falling from the sky. It will still take some time for an economic recovery to fully reach the construction industry.

But there are some important sings that an economic turnaround has been sharper and quicker than some feared. Talk of a "double-dip" recession or second Great American Depression have disappeared. And economists from both sides of the political spectrum are starting to talk about the success of the Recovery Act (the "Stimulus Bill").

Visit msnbc.com for breaking news, world news, and news about the economy

Jon Chesto, Business Editor for the Quincy Patriot-Ledger, offers a bit in a blog post yesterday. His post is in reference to the "Beige Book," a publication regularly put out by the Federal Reserve Bank.

Even commercial real estate, the big downer in these reports lately, showed some hopeful signs. Yes, it’s slow out there, both in terms of leasing and property sales. But one Boston contact reported an increase in leasing activity in recent weeks, and another reported an increase in sales from earlier in the year. Sure, many other commercial real estate contacts are still reporting dreadful conditions. But this is the first time that we’ve seen anything resembling positive news in this sector in quite some time.

Carpenters Local 111 Business Manager Joe Gangi attended an event with Massachusetts Governor Deval Patrick and Congresswoman Niki Tsongas yesterday to discuss the impact stimulus money is having on job creation. Gangi was interviewed for the report on New England Cable News:

Though early talk about a federal stimulus bill centered on economic growth and recovery, some felt too much was invested in tax cuts. And while Wall Street seems to be doing better, the talk of jobs has turned troublesome. More and more, mentions are being made of a "jobless recovery," a startling turn for those who imagined the stimulus bill serving as a job creating machine as the WWII spending efforts are remembered.

So it comes as welcome news that President Barack Obama is now talking about investment in actual job creation. His proposal would take advantage of unused money intended for bailouts of banks and financial institutions. There is resistance from the right, but Obama seems determined to try to use that unused money to both pay down some debt, but stimulate job growth.

In a speech at the Brookings Institution, Obama said he wants to give small businesses tax breaks for new hires and equipment purchases. He also wants to expand American Recovery and Reinvestment Act programs and spend some $50 billion more on roads, bridges, aviation and water projects.

Finally, Obama would offer consumers rebates for retro-fitting their homes to consume less energy.

Efforts by Union Carpenters or other advocates to uncover bad deeds often run into a wall of ignorance or denial. But two prominently featured stories on Boston.com today shine a bright light on some significant issues in the construction industry and elsewhere that clearly need some attention.

The first relates to public work being awarded to contractors despite their previous violations of various laws and their failure to disclose those violations as required by law.

The story focuses on stimulus money given to companies for paving projects, but the lack of oversight is clearly a problem that carries into other projects at the state and local level. At it's worst, the problem is intentional, as awarding authorities ignore likely or confirmed violations of prequalification or bidding laws in order to hire the contractor that simply has the lowest price.

A clear example of this can be found in Hanover, where the town awarded a public school project to Callahan Construction, despite multiple warnings from the Attorney General's office that the company had misled the town. At issue there was the company's attempt to prequalify for the project by taking credit for similar work that was done by another company. Though they claim to be a successor, they did not disclose financial problems they would've been required to include in documents if that were the case.

The second is about the massive settlement Wal-Mart just reached with the Commonwealth of Massachusetts. This time out, the company is paying $40 million to almost 90,000 workers for illegally lowering workers pay by refusing to pay overtime, manipulating time cards and making workers skip legally mandated breaks.

Yes, 90,000 workers. Hardly a mistake with paperwork. And don't make the mistake of thinking Wal-Mart is being a good corporate citizen by settling the suit; it was filed in 2001!

Quincy Patriot Ledger Business Editor Jon Chesto tweets a link to a state release on jobs.

The bad news has reversed, but not in any meaningful way. From the release...

Construction gained 100 jobs in October, this sector's first monthly gain since February. At 108,400, Construction employment is down 22,100 or a 16.9 percent rate of job loss over the year.

While 7,000 people a day run out of unemployment benefits, the Congress continues to bicker over how they'll extend them. From cnn.com...

One month after the House passed a bill extending unemployment benefits, the issue is still being debated in the Senate.

Democratic leaders in the Senate introduced a bill two weeks ago to lengthen benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% would receive an additional six weeks.

Senate Republicans, who twice objected to swift passage of the bill by unanimous consent, want to add several amendments. Their requests include paying for the increased benefits with stimulus funds rather than by extending a longstanding federal unemployment tax through June 2011.

While leaders in both parties are trying to negotiate a compromise, Senate Democrats Wednesday evening took a step to limit the debate on the bill and bring it to the floor as early as the end of next week. If it passes, the Senate legislation must then be reconciled with the House version, which extends benefits by 13 weeks for those living in high-unemployment states.

Some segments of the construction industry could rebound and show some growth in 2010 according to a report on the Wall Street Journal on McGraw Hill forecast. The report is the one of the few positive indicators for an industry that has been hit harder than almost any other.

According to the WSJ article, the report indicates growth in single-family houses, apartment buildings, and highways and bridges next year help to offset continued building struggles in the commercial and manufacturing sectors.

The value of construction starts this year was expected to be down 25% by year’s end in comparison to 2008. McGraw Hill projects a possible increase 11%increase in the value of construction starts in 2010.

WSJ article and the McGraw Hill study require subscription or purchase.

Members will be rallying at an assisted living facility in Hanover, New Hampshire on Friday to kickoff a public education campaign in the area about Kal-Vin/GNPB/Northrock Construction. Kal-Vin, one of the names used by the collection of companies run out of the same office, is doing work at Kendal at Hanover, an assisted living facility owned and operated by the Kendal Corporation of Pennsylvania. Bannering by members will continue at the facility daily for several weeks.

Members will meet in front of the facility at 8am on Friday, July 31. The facility is located at Hanover-80 Lyme Road, in Hanover. Directions are as follows:

From Southeast or Northwest of Hanover:
Take I-89 to the Lebanon-Hanover/Dartmouth College exit (#18).
Turn onto Route 120 North and follow it until the road branches (at the light). Stay on Route 120 (straight ahead) all the way to the intersection with Route 10. Take a right onto Route 10 North and follow it for approximately 2 miles. Kendal at Hanover will be on your left.

From Southwest of Hanover:
Take I-91 to that Norwich, VT/ Hanover, NH-Dartmouth College exit (#13). Turn right and cross the bridge into Hanover, which will bring you to the Dartmouth Green. Go left at the far corner of the Green (across from the Hopkins Center) onto Route 10 North. Follow Route 10 North for approximately 2.5 miles from the Green. Kendal at Hanover will be on your left.

If you have any questions or problems please call Marty Coyle or Frank SantaFe.

A not so scientific study of the economy in Oregon.

Below is the text of a speech by Mark Erlich, Executive Secretary-Treasurer of the New England Regional Council of Carpenters to the annual meeting of the Eastern Seaboard Apprenticeship Conference in Boston, MA. The speech was scheduled to be given at an event this evening at the John F. Kennedy Library and Museum.

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Thank you for having me here tonight. It’s a pleasure to be speaking at the annual ESAC conference. The setting here is beautiful and the surroundings are enjoyable, but all of us know we are meeting in very troubled times.

Our construction industry has always been a barometer of the health of our nation’s economy, and when the bottom dropped out last fall, our members were among the first to feel the pain and among those occupations that have felt it the deepest. Unemployment in the construction trades now averages between 20 and 30%--even higher in some areas and among some trades, but rarely lower. Architectural billings have plummeted in 2009, meaning that the prospects for the future are not that hopeful. If the architects don’t draw, we don’t build.

Certainly, the stimulus money will have some impact but I think less than some of us would have hoped. In an effort to be bi-partisan, the final allocation of the $787 billion package included $288 in tax cuts and only $27 billion in traditional infrastructure investment. We welcome every single one of those dollars, but I do not believe they will be enough to clear our benches.

If, as they say, crisis offers opportunities, then perhaps this period is an opportunity to understand how we got to this point, to re-think some of our nation’s underlying values, and to look at the work we do in new and better ways.

I read a recent article by Simon Johnson, former chief economist of the International Monetary Fund, the organization that works with financially troubled countries to get out from under economic crises. Johnson, representing a very mainstream organization, points out that the problems facing the United States are not unlike those of the so-called "banana republics" he dealt with at the IMF, where the problems were as much political as economic, where the ultimate obstacles involve the undemocratic control of their country’s economies.

According to Johnson, there is a "deeper and more disturbing similarity: elite business interests--financiers, in the case of the U.S.--played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse."

For the past 25 years or so, finance boomed, starting with the Reagan years, and gaining strength with the deregulatory policies of the Clinton and bush administrations. Wall Street ran with the invention of securitization, interest-rate swaps, and credit-default swaps as sources of income. From 1973 to 1985, the financial sector had never earned more than 16 percent of domestic corporate profits. But in this decade, it reached 41 percent of all corporate profits. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The American financial industry gained political power by promoting a belief system that what was good for Wall Street was good for the country. In a world that celebrates the idea of making money, it was easy to believe that the interests of the financial sector were the same as the interests of the country--and that the winners in that world knew better what was good for America than everyone else did.

But this belief system has proved empty and destructive. This is a time for all of us to ask: what is really important in our society? The glamor of money and celebrity or the value of hard work that is the bedrock of our nation’s strength? In the aftermath of 9/11, who in lower Manhattan led the efforts of rescue and recovery? Was it the celebrated investment bankers and fund managers who worked on Wall Street? No, it was the construction workers, cops, firefighters, and EMTs--all union members, by the way--who did the dirty work and possessed the skills to help New York and our country, begin a return to normalcy.

Unfortunately, a return to normalcy on Wall Street meant using workers’ pension funds and 401ks to bet the house on increasingly leveraged financial instruments. In the end, the house of cards came tumbling down and the ones who are paying the ultimate costs are America’s working families--the kinds of people who rescued those on Wall Street from the consequences of a terrorist attack.

What does all this have to do with our training mission? As members of the training community, it is our obligation to train our apprentices to become the most productive journeymen and women in the industry. In a highly competitive world, they need to be the best they can be, with a full array of skills. But they also need to become union citizens and our training programs need to include curricula on labor history, labor economics, and the rights and responsibilities of union members. They need to understand that it is not just enough to show up and put in an honest day’s work. They need to know that their futures and their families’ security depends on the strength of their union and their unions’ strength depend on their participation, support, and understanding of the issues.

They need to know that our society has seen an enormous growth in economic inequality since the 1970s and that trend coincides with the decline of union density. They need to know that, whereas 30 years ago the average American CEO earned about 30 or 40 times what an average worker earned, last year that CEO took home 344 times the typical worker’s pay. They need to know that in 2007, the top 50 hedge and private equity managers--the people who helped bring us our current situation--earned an average of $588 million, more than 19,000 times what an average worker earned.

They need to know that, contrary to popular mythology, our problems today were not caused by America’s workers or their unions. In fact, productivity is up 70% since 1980, while real wages have risen only 5% after inflation.

They need to know that it wasn’t always like this and that it doesn’t have to stay this way. For example, in 1955, America’s top 400 taxpayers paid three times more of their income in taxes than the top 400 of 2006. There used to be more of a sense that fairness, rather than unbridled competition, was the American way.

I once read a book that described the history of America as consisting of 3 different geometric shapes. Around the time of the transition from the 19th to the 20th century, America was like a pyramid, with a few wealthy people on the top and the rest of the population near the bottom. After World War II, things changed as a result of economic prosperity and the growth of the union movement. The country looked more like a diamond with a large middle class and smaller groups of very wealthy and very poor Americans. Today, we have more of a bottom-heavy hourglass with a larger group of wealthy Americans at the top, but a declining middle class as most Americans work harder and longer just to keep afloat.

Obviously, there are many differences between now and the "diamond" era, but one of the main ones is that the numbers of union members declined along with the political influence of labor organizations that fought for a nation based on valuing hard work and economic justice.

So when we think about training, we have to think about all aspects of a union industry. First, we have to teach the skills. But we also have to prepare our members for change--a constant in our modern lives. We need to view our crafts as occupations that will have to incorporate continuing lifelong education, i.e., journeymen upgrades as well as apprentice training. We have to adapt our curricula to reflect the new "green" techniques and technologies. We have to accommodate and welcome greater diversity in our workforce. The building trades have always been a pathway for bright and talented young people from all walks of life into the middle class. We are a nation of immigrants and we have to recognize that much of our future construction workforce may be coming from the new immigrant communities.

But above all, we need to build a set of values into our training. We need to remind our apprentices that they will be the ones who will build our society’s schools, roads and bridges, offices, and hospitals--and that should be a source of pride. We need to remind them that they are a key element of one of the most pivotal sectors of our nation’s economy; when they work, the economy is healthy. We need to tell them about the history of the labor movement, how virtually every social improvement in our country was a result of the progressive tradition of the labor movement.

And we need to ask them to be union citizens, to take on the great challenge of our time, to restore the role of unions as a counterweight to corporate greed and financial irresponsibility and as the central voice for economic justice in the united states.

The Atlantic Monthly has an interesting and blunt piece in the May issue about the current economic situation in the United States. Titled "The Quiet Coup," it was written by Simon Johnson, a former chief economist of the International Monetary Fund. The IMF oversees the global financial system, working to smooth relationships between national economies and currencies. It also offers financial assistance and consultation to nation's in dire need.

As much as Americans might not like the title of the piece, the business community is less likely to appreciate Mr. Johnson's assessment of the current situation in the United States and his suggestions for how to fix it.

The Boston Herald runs another piece confirming what most already know: the current recession is hurting blue collar workers more than white collar workers and the construction industry is bearing a large brunt of the pain.

A rare bit of good news has come in for former employees of Wood Structures in Saco, Maine. US Secretary of Labor Hilda Solis announced today that the Department of Labor is providing a grant of more than $600,000 for displacement services.

The State of Maine will administer the grant, which may provide "individual career counseling, skills assessment, and basic and occupational skills training," according to the DOL press release.

Bob Burleigh, an Industrial Representative serving Northern New England for the New England Regional Council of Carpenters said: "After two months of nothing but bad news, it is great to have something positive to tell the members affected by the plant shutdown and the bankruptcy. This grant will help these laid off workers get the training and other help that they may need to get back on their feet."

Wood Structures, a 40-year old company who's trusses and raw lumber have been used throughout New England and New York struggled with the collapse of the housing market. They attempted to reorganize their debt through Chapter 11 bankruptcy proceedings, but were forced to lay off the final 50 or so union carpenters in mid-March. They are likely looking at Chapter 7 bankruptcy, which involves liquidation of the company's assets.

The Government Accountability Office (GAO) this morning released a report detailing how bad the Federal Government has been at helping workers who get cheated out of pay. The New York Times published a story in advance of the reports release about the Labor Department's Wage and Hour Division.

The report looks like it will go a long way toward making it abundantly clear how the underground economy has been allowed to grow, even in periods of historic economic growth. According to the NYTimes story on the report, Federal investigators easily dismissed complaints from workers who reported they weren't paid properly without reaching legitimate resolutions. In other cases, they made workers wait for unreasonable periods before responding or ignored them altogether.

From the NYTimes story:

"In one case, the division failed to investigate a complaint that under-age children in Modesto, Calif., were working during school hours at a meatpacking plant with dangerous machinery, the G.A.O., the nonpartisan auditing arm of Congress, found.

"When an undercover agent posing as a dishwasher called four times to complain about not being paid overtime for 19 weeks, the division’s office in Miami failed to return his calls for four months, and when it did, the report said, an official told him it would take 8 to 10 months to begin investigating his case."

"In another case, the accountability office found that workers at a boarding school in Montana were not paid more than $200,000 in overtime. But when the employer offered to pay only $1,000 in back wages as the two-year statute of limitations approached, the division dropped the case."

The following question and answer is taken from a transcript of a Town Hall meeting President Barack Obama had at the Orange County Fair and Event Center in Costa Mesa, California on March 18, 2009.

Q I'm President of the State Building and Construction Trades Council of California, the umbrella organization for construction unions. I would like to thank you for your leadership on the stimulus package, and particularly for trying to get construction workers back to work.

But during the last eight years, the administration chose not to enforce the Davis-Bacon requirements, chose not to enforce wage and hour conditions, and many thousands of workers were denied the wages that they were legally entitled to. What can your administration do to make sure that people get the wages that they're entitled to in this terrible economic downturn?

THE PRESIDENT: Well, look, I have already said that we are going to promote Davis-Bacon. We think it is important that unions have the opportunity to organize themselves. (Applause.)

Now, you know, sometimes, you know, the business press says, oh, that's anti-business. And whenever I hear that I'm always reminded of what Henry Ford said when he first started building the Model T -- and he was paying his workers really well. And somebody asked him, they said, why are you paying your workers so well? He said, well, if I don't pay them well, they won't be able to buy a car.

Think about that. Part of the problem that we've had with our economy over the last decade at least is that -- well, there are a number of problems. Number one, it turns out that a huge amount of the growth that was claimed was in the financial services industry. And now we find out that a bunch of that stuff was just a paper growth that wasn't real and vanished as soon as somebody pulled the curtain.

Another part of the problem with our economy and the way it was growing was that wages and incomes for ordinary working families were flat for the entire decade. Now, I don't need to tell you this because you've experienced it in your own lives. You're -- just barely kept up with inflation while people at the very top -- and look, I'll be honest with you, because I'm now in that category -- we were seeing all the benefits.

So when I say that we should make it easier for unions to organize and observe Davis-Bacon, all I'm trying to do is to restore some balance to our economy so that middle-class families who are working hard -- (applause) -- they're not on welfare, they're going to their jobs every day, they're doing the right thing by their kids -- they should be able to save, buy a home, go on a vacation once in a while. You know, they should be able to save for retirement, send their kids to college.

That's not too much to ask for; that's the American Dream. And the only way we get there is if we have bottom-up economic growth instead of top-down economic growth. (Applause.) And that's why -- that's why the debate about this budget is so important.

Interesting run of news in the industry lately.

Yesterday, news broke that new home construction was up.

WASHINGTON (AP) — The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

February's pickup was led by a big increase in apartment construction.

By region, all parts of the country reported an increase in overall housing construction, except for the West, which led the housing boom and has been hard hit by the bust.

Some economists said the new housing figures offered a glimmer of hope.

An executive briefed on plans by LNR Property Corp., the project's developer, said the firm does not expect to close on the $43 million purchase by a March 31 deadline. That means construction of the long-anticipated SouthField development, a cluster of villages set to include businesses and homes, will remain on hold.

Wood Structures, Inc. the Saco, Maine based yard that sold raw lumber and manufactured trusses and other materials for lumber yards throughout New England, has closed and will be liquidated through Chapter 7 bankruptcy proceedings.

Wood Structures has been struggling for some time as the housing sector steadily declined. The company, more than 40 years old has had multiple owners, according to news reports. The current owner was listed as Roark Capital Group of Atlanta, GA. The final 50 or so employees, who were members of Carpenters Local 1996, were laid off on Monday.

Employees who belong to Local 1996 of the New England Regional Council of Carpenters will be owed a week's pay for every year of service, said Bob Burleigh, the union's industrial representative. Severance and vacation pay will be among the issues the union will seek for workers during bankruptcy proceedings.

Union workers earned wages ranging from approximately $15 to $25 an hour and received benefits, including health care, a retirement plan and paid vacation.

"They were very good jobs," Burleigh said.

The Boston Globe led today's front page with a story by Casey Ross about unemployment in the construction industry. The story and accompanying video features Local 67 Brother Mike Kerrin and Anthony Fedele of Carpenters Local 40.

The video story is embedded below, follow the link above to read the entire story that appeared in the newspaper.



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