One of the primary schemes of corrupt contractors is using subcontractors and labor brokers that pay employees off-the-books or as 1099 subcontractors to evade paying employment taxes, workers’ compensation premiums, overtime and wages. When faced with law enforcement, corrupt contractors use that subcontract relationship as a shield against accountability. But when looked at closely, the contractor often times acts like an employer of the workers just as much as the subcontractors or labor brokers. It is a growing trend and construction is not the only industry facing the problem.

In response, the US Department of Labor issued an Administrative Interpretation (AI) of joint employment under the Fair Labor Standards Act (FLSA). Joint employment under the FLSA makes the contractor and subcontractor or labor broker separately and jointly liable for unpaid wages and overtime if the contractor is also acting as an employer of the workforce. The AI does not change the law, it provided guidance on existing law and gives notice to employers that the USDOL will use joint-employment findings more often.

Dr. David Weil, Administrator of the USDOL Wage & Hour Divisions wrote, “As the workplace continues to fissure, and as the employment relationships continue to become more tenuous and murky, we will continue to identify where joint employment applies and hold all employers responsible.”

In a press release supporting the USDOL’s action, General President Doug McCarron said, “This action by the Labor Department lets cheating contractors know that they can’t continue to hide behind their labor broker subcontracts.”

Initially, many of unions were taken by surprise by the non-union sector’s developing economic clout. In the absence of a comprehensive counter-strategy, a number of locals and district councils adopted wage concessions in order to stay competitive with the non-union sector. Non-union employers effectively undercut that tactic by simply driving their own pay rates down further. At the same time, the ABC grew in political sophistication and became one of the linchpins of the “New Right” that propelled Ronald Reagan to the presidency in 1980.

“Our organization was set up to deal with the industry as it was in post-World War II North America,” said UBC General President Doug McCarron when he was elected in 1995. “But the industry has changed drastically since then, and we must change with it.”
Since his election, McCarron has reorganized the Brotherhood’s priorities and its structure. He set organizing as the union’s number one priority and has redirected its resources to get that job done. The union’s localized and often politically-motivated structure has also been restructured and streamlined to reflect today’s regional and national construction industry, as well as to ensure that union leaders are more accountable to members for the job they do.

The ultimate goal of these structural changes is to organize and reorganize every carpenter and contractor in North America and set the standard for wages, benefits, and working conditions on every jobsite. It is an ambitious goal, and one that will take a long-term effort to complete. But it can be done through organizing.

The UBC faces a complex and challenging future. New tools and materials and new methods of construction are entering the industry at an accelerated rate. In many ways, the carpenter of the 1990s is no different from the carpenter of the 1880s. But all indications are that the dawn of the 21st century will bring much more rapid technological innovation. Increasingly, the on-site carpenter is more an “installer” than a “fabricator” with the development of prefabricated materials, modular components, and panellized building sections. The multi-faceted general contractor is giving way to the construction manager whose subcontractors expect their carpenters to restrict their skills to more highly specialized tasks, such as concrete forms, framing, drywall, ceilings, finish work, etc. Union apprenticeship and journeyman-enhancement training programs have addressed these new developments while at the same time maintained a high level of all-around craft competence that union journeymen will always need.

Ultimately, maintaining and extending a strong union for carpenters will depend on combining an awareness of the dynamics of the future with the finest traditions of the past. The days of “country club” unionism that provided job security to members by keeping membership numbers down and the unorganized out are over. The UBC’s growth in the future rests on its ability to reach out and open its doors to all working carpenters.

Just as Peter J. McGuire built the Carpenters Union in the 19th century by organizing all carpenters, today’s leaders must rebuild this union in the 21st century in much the same way. They must embody that same spirit of inclusion in order to organize the unorganized and mobilize current union members to talk to their non-union brothers.

In 1882, W.F. Eberhardt of Philadelphia’s UBC Local 8 (which remains strong to this day), wrote a letter to the Carpenter. He outlined the efforts of his local’s members to contact every single carpenter in the city on a ward-by-ward basis. He described how those pioneering volunteer carpenter-organizers held regular meetings across the city to bring the unorganized carpenters into the new union. Today, more than 116 years later, the Brotherhood is using a “new” model much like the outlined by Eberhardt. Every district, council, and local in the union currently boasts an active volunteer organizing committee that uses today’s modern techniques and technologies, as well as old-fashioned one-on-one contact, to spread the still-relevant message of unionism to every non-union carpenter in their area. The American workforce may look different today–more multi-cultural, multi-racial, and multi-lingual. But the underlying principle of organizing all the men and women who make their living at the carpentry trade is exactly the same as it was in 1881, when 36 carpenters met in Chicago to improve their lives, their futures, and their trade.

Photo source: FreeImages.comGeorgeBosela

Jon Bel Edwards was elected Governor of Louisiana. He appointed Executive Secretary-Treasurer Jason Engels to his economic development transition team. The team will make recommendations on job training and workforce development. Recently, Jason appeared on New Orleans News 8 in a three-part series exposing payroll fraud in the Louisiana construction industry.

Local unions took advantage of the favorable conditions to expand into new areas of collective bargaining. In 1950, for example, the New York District Council of Carpenters negotiated a 3% payroll tax to support a Carpenters Welfare Fund. The idea of health and welfare funds became so attractive that the national office’s Health and Welfare Committee, appointed in 1954, urged all locals to set up programs as quickly as possible. Jointly trusteed pension funds soon followed, as well as other contract gains, such as safety measures, travel time, and coffee breaks.

The accomplishments of this period brought additional stability into the lives of working carpenters and their families. Unfortunately, the extended boom and success in the bargaining arena also bred a measure of complacency within the unions. With nearly full employment becoming routine, business agents often reduced their roles to those of office administration, job referrals, and contract negotiations. Traditional tasks such as organizing the unorganized and membership education fell by the wayside. Furthermore, many union leaders and rank-and-file members, terrified by the nightmare of the Great Depression, were convinced that job security depended on limiting the number of union members in order to minimize competition for a finite number of jobs.

The post-war construction boom, however, outpaced the unions’ ability to satisfy all the labor requirements. As a result, a significant number of non-union contractors began to appear on the fringes of the industry, particularly in suburban and rural homebuilding. Many unionists remained unconcerned about the potential threat of these newcomers since work was plentiful in the growing commercial and industrial construction sectors. Compared to the physical demands and the short life span of house construction, employment was more stable and of longer duration on large-scale projects. Ignoring the emerging non-union workforce came at a cost, however. While union trades workers continued to build 80% of all construction in the U.S. As late as 1969, the reliance on bigger projects and a limited membership allowed the non-union employers to win a foothold in the industry.

The 1970s began a new and more difficult era. The face of labor relations in construction has been completely transformed in the last 20 years. While the Carpenters Union and other building trades unions have always had to contend with hostile governmental interference and economic insecurity, they still successfully established unionism as a widely accepted force in the industry by the turn of the century. Since 1970 however, the rapid rise of the open shop has upset the long-standing collective bargaining equilibrium in construction. Modern anti-union advocates have been able to accomplish much more than their predecessors did. Today, just 30-35% of the construction dollar in the U.S. involves union workers.

The roots of this transformation can be found in the spiraling costs of the late 1960s. Escalating materials and labor prices set off alarms in the ranks of building owners, management consultants, corporate journalists, and public policy makers. In 1969, 200 of the nation’s top executives formed the Business Roundtable in order to put a lid on construction bills. The Roundtable, made up of the heads of General Motors, General Electric, Exxon, U.S. Steel, Du Pont, among others, concluded that the route to financial control over capital construction costs lay in blunting the power of the building trades unions.
The Roundtable built political support to weaken legislation, such as the Davis-Bacon Act, that protects construction workers’ wages. It laid out a collective-bargaining agenda to eliminate union gains. Finally, many of its members sponsored and subsidized non-union contractors on their own projects. The Roundtable’s efforts combined with the severe building recession of the mid-1970s and an increasingly anti-labor political climate in the United States to provide a generous window of opportunity for the open-shop movement.

Non-union builders, gathered under the umbrella of the Associated Builders and Contractors (ABC), took advantage of these opportunities. Today, construction in the U.S. is no longer dominated by union contractors. Open-shop and/or double-breasted firms now participate in and even control many major construction markets. Their mission is clear. They reduce wages, weaken established safety and working conditions, and change the way work is carried out on the jobsite. They seek to replace the traditional egalitarian apprentice/journeyman system with the co-called “merit shop” philosophy in which workers are pitted against one another and have no real shot at quality training or a decent lifelong career in the trades.

The American Plan of the 1920s challenged the status of unions in the United States, but the Great Depression of the 1930s threatened the very existence of working people. The stock market crash in 1929 was a signal to the world that the economy was in crisis. In the months that followed unemployment rose at the astonishing rate of 4,000 workers a week.

As always, the construction industry served as an advance indicator of general economic conditions. In many parts of the country, the depression started for carpenters in the midst of the “Roaring Twenties.” By 1928, many local unions were issuing “stay away” warnings to travelling carpenters. Conditions only worsened, however. Total construction in the United States amounted to $20.8 million in 1929; four years later it reached just $6.6 million. Membership ultimately dropped to a low 242,000 in 1932 and fully 40% of those members were unable to pay their dues. By the next year, the Carpenter reported that less than 30% of the union’s ranks were employed as carpenters.

The pain of unemployment was devastating. The incidence of alcoholism, divorce, emotional depression, and suicide soared during the early 1930s. Proud carpenters, whose sense of self-worth was wrapped up in their craft and their ability to make a living as independent tradesmen, were unable to put bread on the family table. Local unions tried a variety of ways to ease the pain–lowering dues payments, negotiating for 24- or 30-hour work weeks, forbidding overtime, and instituting job-sharing programs. But all of these attempts were little more than bandaids on a fundamentally crippled industry.

Some union leaders on the local level looked to political action as a solution to their problems. A number of locals called for an independent Labor party as an alternative to the Republican and Democratic political parties. In 1932, the Chicago Carpenters District Council urged the UBC national leadership to lead the fight for an unemployment insurance system. Hutcheson was wary of such activities. His mistrust of governmental intervention in the collective bargaining process, fueled by his experiences during World War I, made him reluctant to support an activist agenda by the federal government. While Hutcheson ultimately accepted the idea of unemployment insurance, he unsuccessfully opposed the AFL’s endorsement of a minimum-wage bill in 1937. As late as 1940, after eight years of popular New Deal legislation, Hutcheson maintained his opposition to extensive federal involvement. “Labor,” said Hutcheson, “has known that what government gives, government can take away.”

Rank-and-file carpenters and local leaders had less difficulty welcoming the New Deal programs. Like Hutcheson, unemployed carpenters were not advocating welfare or relief. But they did want jobs. They eagerly greeted Roosevelt’s alphabet soup of public works agencies (PWA, CWA, CCC, and WPA) instituted to help revive the ailing economy. Initially, conflicts arose between federal desires to put people to work at any price and union commitments to maintaining a decent wage. By 1936, however, federal and union policies coincided to enable skilled tradesmen to move into their customary roles.

New Deal initiatives created jobs for millions of Americas but they did not end the Depression. In fact, almost 9.5 million people were still out of work in 1939. Only the monumental task of preparing for entry into World War II was finally able to generate enough work to eliminate the suffering of the jobless. The war-driven building demand and the general post-war prosperity finally provided American carpenters with reasonable opportunities and greater financial security.

The wages of union carpenters rose 15% between 1945 and 1949, 30% through the 1950s, and 72% during the 1960s. While inflation ate away at some of those gains, by and large the quarter-century following World War II proved to be the longest period of sustained improvement in the standard of living of American workers. The nation’s labor organizations reflected this growth, representing nearly one-third of the workforce. The UBC reached its peak membership of 850,000 in 1958 and again in 1973.

Photo source: FreeImages.comChadGore