President's Message

For the better part of a year now, we have witnessed the beginnings of what many political experts believe to be is an influential populist uprising in America.  Whether they are organized elements (e.g. “tea-baggers”) or some other type of loosely-organized movement, the defining feature seems to be an increasing disconnect between the problems and issues that confront Americans on a daily basis in their communities, and the misplaced priorities of our elected elite.  It is, I believe, a corrosive atmosphere that is undoubtedly gaining traction, attention and, most of all influence in American politics.  

Just ask Creigh Deeds in Virginia, Jon Corzine in New Jersey, and Martha Coakley in Massachusetts.

The recent U.S. Senate race in Massachusetts was a very good indicator of the increasing level of struggle, frustration, and concern that everyday working Americans are experiencing during this horrible economic downturn, and how they see themselves becoming ever more detached from their governmental leaders, which is leading to ever more levels of frustration and anger.

On the eve of that election, Democratic Pollster Celinda Lake said Coakley was hampered by the failure of the White House and Congress to confront Wall Street, rather than sit passively by while the unemployment rate continues to go up and the Goldman Sachs of the world enjoy record profits at our expense. That failure, she said, means that Democrats are being blamed by angry independent voters worried about the state of the economy.

"If Scott Brown wins tonight he'll win because he became the change-oriented candidate. Voters are still voting for the change they voted for in 2008, but they want to see it. And right now they think they've got economic policies for Washington that are delivering more for banks than Main Street."

Ms. Lake is onto something here, I believe.  For not only are voters angry about the hundreds of billions of dollars that have gone to Wall Street, and the vast profits these banks are now raking in, but they also harbor deep concerns about other issues that our governmental leaders continually fail to address.  Issues such as the out-sourcing of jobs and whole industries; shrinking paychecks for those jobs that do remain in this country; increasing state and local taxes; and ever-higher health insurance premiums.

Certainly, these are all legitimate concerns, and worthy of rigorous attention and debate in the US Congress, as well as state legislatures.  

But, what is incredibly ironic is the fact that those who are continuously and energetically fanning the flames of our current populist revolt – people like Rush Limbaugh, Sean Hannity and Glenn Beck – are the very same people who are advocating for a conservative-oriented policy approach that would exacerbate many of these problems even further!

Allow me explain by using a comparison/contrast example from the U.S. construction industry.  

For any public or private entity or agency looking to invest significant dollars and resources in a major construction project, they essentially have two distinct business models from which to choose.

The first is the organized construction market business model.  This is a business model that offers increase jobsite efficiencies through a 21st century labor-management approach based upon cooperation, harmony, partnership and customer service.  It is an approach that is designed to ensure that the construction owner will have a steady supply of the world’s safest, most highly skilled and productive skilled craft workforce.  

Now, that workforce, in turn, receives a pay and benefits package reflective of their skill, their training and their productivity levels.  Numerous studies have shown that utilizing such a highly trained, highly productive and safe workforce can actually reduce costs on major construction projects – both public and private.  

Further, the organized construction business model is wholly dedicated to the idea of “workforce development.”  The demographics of the U.S. construction industry are troubling.  The average age for a construction worker in America today is roughly 40 years old.  Many building trades unions will see a third of their current members retire in the next 10 years.  And even though we are mired in a terrible economic slump today, projections are that there will be a dramatic increase in the need for skilled craft professionals over the next 20 to 30 years.

The union construction sector spends roughly $750 million a year on the most advanced and envied skills training infrastructure in the world.   Additionally, both labor and management are in agreement on the need to develop additional outreach efforts designed to increase the career training opportunities for historically disadvantaged citizens; particularly women, minorities and those from economically distressed communities.  

Now, this organized construction business model lies in stark contrast to what is known as the “open shop” or “merit shop” business model, where success is fundamentally predicated on the assembly of a low-cost, low-skill, often times vulnerable workforce that is easily manipulated and exploited in a “race to the bottom” approach that has caused, and continues to cause, great damage to the socio-economic structures of communities all across the nation.  

The advocates of the open-shop business model, headed by the Associated Builders and Contractors (and trumpeted by Limbaugh, Hannity, Beck, et. al.), believe strongly that such an approach works best for the benefit of the construction customer, the workers and American taxpayers.  All in all, they say, the open-shop approach is the only one that is true to the American principles of fair and open competition.  

But, they never seem to entertain the most obvious question:  At what cost?  

If we strip the veneer off of the open-shop business model, we find that many of the problems that are fueling the burgeoning populist movement in America today, can be laid at the feet of this industry.

Let’s take the issue of undocumented workers, for example.  Recent estimates by the Pew Hispanic Research organization indicate that 14% of construction workers in the United States are here illegally or are undocumented.  And in many areas of the country, the scenario works like this:  large, dominant contractors employ this strategy of assembling a low-wage, low-skill, exploitable workforce for competitive advantage, and thereby force once-reputable firms to do likewise in order to compete.  This is the essence of the “race to the bottom” mentality that is eroding wage and benefit structures in the construction industry, as well as the socio-economic fabric of many communities around this country.

And here is what the “race to the bottom” approach has wrought.  Over the course of the last 40 years, we have witnessed a steady decline in the standard of living for American construction workers.  In fact, real wages for construction workers were LOWER in 2006 than they were in 1973!  Adjusted for inflation, construction workers in 1973 earned the equivalent of $22.13 an hour in today’s dollars.  However, the actual average hourly pay for construction workers in 2006 was only $18.29 – seventeen percent below the 1973 wage rates, adjusted for inflation.

Now remember, construction work is seasonal work that is affected by the weather and other conditions.  An average year for a construction worker is 1,500 hours of work, while an above-average year would yield 2,000 hours of work.  So, that $22.13/hour wage rate from 1973 yielded an annual income of $33,195 dollars for 1,500 hours of work (or, $44,260 for 2,000 hours of work), while that 2006 wage rate of $18.29 an hour provided an annual income of $27,435 for 1,500 hours worked; and $36,580 for 2,000 hours of work.

Now, I don’t care where you live in the United States, it is very, very difficult for one person to live on $27,435 per year, and if that worker is supporting a family of four, they are hovering right above the federal poverty line of $22,050.  This is just one part of the legacy of having the U.S. construction industry dominated by a “race to the bottom” business model.

Now, let’s talk about health care – which seems to be on everyone’s mind these days.  In particular, let’s examine the actions of the open-shop construction sector, and in so doing we will, once again, see how the “race to the bottom” business model plays an active, albeit destructive, role that affects the wealth and prosperity of individuals, families and communities.  

The construction industry – again, an industry dominated by the utilization of a low-wage, low-skill workforce – saddles the U.S. health care system with the highest injury and illness rate among all private industries.  In fact, it has the highest rate of non-fatal injuries and illnesses of any American industry, and it has three times the fatality rate of other private industries.  Accordingly, construction accounts for the highest rate of injuries and illnesses entering our nation’s hospitals - particularly hospital emergency services.

Now, couple those disturbing facts with the fact that the construction industry and the agricultural industry have the lowest rate of health care coverage on an inter-industry basis, and within construction, coverage is lowest within companies having fewer than 10 employees.  In sum, the U.S. construction industry faces the dual dilemma of high-risk work and chronic un-insurance, primarily because relatively few non-union construction companies offer employee coverage – and significant numbers of those non-union employees (a substantial number of whom are undocumented) cannot afford the coverage when it is offered…leaving them to obtain health care services at the public’s expense.

It is that last point that requires special emphasis.  The open-shop construction industry is notorious for pushing the health care costs of its low-wage, low-skill, exploited workforce onto the backs of responsible employers and onto communities all across the United States.

So, when a patient receives a hospital bill that charges $7.00 for one tablet of Tylenol, he or she needs to look no further than the open-shop construction industry to understand why.  In fact, such cost-shifting has taken, and continues to take, a tremendous toll on families and communities all across the nation.  For example, in Dallas, TX the societal cost of uncompensated care – in the form of higher taxes and insurance premiums – is estimated to be $1,800 per family!

So, to those “tea-baggers” and other patriotic American citizens who are feeling the righteous tinge of populist anger over what they perceive is a tone-deaf government that is seemingly not in touch with, and certainly not addressing, the problems that confront them, their families, and their communities on a daily basis – issues such as illegal immigration, declining incomes, soaring health care costs, and escalating state and local taxes – then, I have one simple and basic talking point for you to raise with your elected leaders:

LOOK NO FURTHER THAN THE OPEN-SHOP CONSTRUCTION INDUSTRY!