The Building Tradesman Newspaper

Friday, November 06, 2009

ABC’s business model: Cheap, subservient workforce contributes to our race to the bottom

By The Building Tradesman

By Mark Ayers
AFL-CIO Building Trades Department

Ever since I assumed the presidency of the Building and Construction Trades Department in October, 2007, I have been very aggressive in trying to get our unions focused on “stepping out of the box” to confront a plethora of challenges – most prominently the need to establish a new brand identity for union construction that is based upon pride, performance and professionalism.

It has been, and will continue to be, my goal to help position our industry in a manner to proactively demonstrate – to construction owners, contractors, public officials and the general public – the value of utilizing the safest, most highly trained and productive workforce in the world.

And we are achieving success.

However, while the Building Trades continue to be among the strongest and most secure sectors of the American labor movement, we are continually faced with the distortions, falsehoods and outright lies being perpetrated by the Associated Builders and Contractors (ABC).

The latest public relations blitz from the ABC has to do with President Obama’s Executive Order that would encourage all federal agencies to require Project Labor Agreements (PLAs) on federal construction projects in excess of $25 million. This action has sent the ABC into an apoplectic fit of rage.

Predictably, the ABC is trumpeting their claims that PLAs serve only to drive up the cost of construction projects; discriminate against non-union contractors and disadvantaged businesses; and are nothing more than political payback for our support of President Obama’s election in 2008

Well, there is an old adage that says if you tell a lie often enough, people start to accept it as the truth. And that is what is happening with the outrageous claims being made by the ABC.

Every day, the ABC is taking a page right out of the playbook of their old friends George W. Bush and Dick Cheney (who the ABC vigorously supported) by spreading a plethora of misperceptions and falsehoods about PLAs.

In actuality, what the ABC is doing is engaging in a classic case of diversion. Again, this is right out of the Bush/Cheney playbook. The ABC does not care that the claims they make about PLAs are not true, as long as people are focused on those issues and not on the ABC itself.

This is because their primary purpose is to avoid and deflect any conversation about, or examination of, the “open shop” business model which the ABC so aggressively advocates and defends. They do not want to engage in that discussion because it is a business model that has systematically done grave damage to American construction workers as a whole…as well serving to undermine the socio-economic structures of communities all across this great nation.

It’s high time that America’s building trades unions, along with community leaders and social and economic justice advocates, called out the ABC and forced them to defend the underlying tenets of the open shop’s “unfettered free market” business model…which can only be described as a “race to the bottom” approach that has damaging consequences for workers, families and communities all across this nation.

In the current debate over PLAs, the ABC has frequently utilized a spokesperson from Miller & Long Construction to lambaste the Administration’s policy on PLAs. Well, I think it’s great that they use Miller & Long as a surrogate. Because, frankly, I can’t think of another contractor that better exemplifies the abhorrent business model fiercely defended by the ABC.

So, let’s take a look at how Miller and Long, and by extension the open shop sector, conducts business.

First off, Miller & Long is one of, if not the, largest concrete firms in the nation. According to the summer 2006 issue of Mid-Atlantic Construction (an industry publication), Miller & Long had revenues of $372 million, while second-ranked Oncore Construction took in $58.4 million.

Unfortunately, estimates are that some 90 percent of Miller & Long Concrete Construction’s 3,000 employees may be undocumented workers, judging from a recent New York Times report and police accounts of major arrests of Miller & Long workers.

The story of how Miller & Long achieves success by exploiting a low-wage, low-skill, oftentimes vulnerable and exploitable workforce is emblematic of the “open shop” business model that is fiercely advocated and defended by the Associated Builders and Contractors. And it only gets more sinister and seamier the more one looks into it.

In April 2006, the New York Times offered this assessment of Miller & Long’s VP for Human Resources: “Myles Gladstone is a burly, silver-haired businessman who spends most days in a hard hat, striding through crushed gravel at construction sites, greeting workers and fielding complaints. But on Monday, Mr. Gladstone, 59, who typically spends his free time collecting antique jukeboxes for his home in Potomac, an affluent Maryland suburb, was caught up in the political ferment sweeping the nation as he joined the throngs of immigrants demonstrating here. He said he could not afford to simply stand by.

As the vice president for human resources of Miller & Long, a regional concrete construction company, Mr. Gladstone is responsible for a mainly immigrant work force. Nearly 90 percent of the company’s 3,000 employees are immigrants, mostly from El Salvador, he said. And the tough border security bill passed by the House in December 2005, which would have made illegal immigration a felony, could disrupt his company’s operations if it becomes law. So when he heard about the demonstration to protest the legislation, Mr. Gladstone and other company officials decided to offer employees a day of unpaid leave to attend the rally and push for a bill that would legalize illegal immigrants.

To show additional support, he attended the protest himself. ‘We are indebted to the work ethic they bring us,’ Mr. Gladstone said. ‘Without them, Miller & Long would not be as successful, and I would not be as successful.’ Mr. Gladstone has assured us that he does not know how any of the 2,700 El Salvadorians on his payroll actually got there.

Indeed. But, they are there.

In 2006, Miller & Long was selected as the contractor to add seating to the west end zone of Carter-Finely stadium at North Carolina State University. Unfortunately, the project was halted when immigration and customs enforcement officers executed a raid. According to local press reports, over 50 workers eluded the authorities and fled from the jobsite. The workers had been hired by Miller and Long to renovate the stadium, in a $19 million upgrade by the Wolfpack Club. Authorities discovered the illegal hot spot while tracking three undocumented people who fled from an accident on Interstate 40.

Now, before I go on, I want to make it unmistakably clear that legal immigrants are not at issue in this debate…and that the illegal employees of Miller & Long and the multitude of other open shop contractors around the nation are victims. They have been, and continue to be, exploited by unscrupulous contractors in the open shop. America’s building trades unions will do, and are doing, all that it can to help protect them and to expose the unscrupulous contractors who take horrible advantage of them.

Incredibly, the leadership of Miller & Long is unabashed about their hiring philosophy.

The bottom line is this: for anyone who has been actively involved in the construction industry for any length of time, you would be hard-pressed to find a more morally corrupt and unscrupulous contracting company as Miller & Long Concrete Construction and its various identities. And the fact that the ABC utilizes Miller & Long executives as surrogate spokespersons for their campaign to limit PLAs speaks volumes about the ABC and the open shop business model.

What is surprising is that many construction management firms, developers, businesses, elected officials and the media continually turn a blind eye to the despicable actions that comprise the open shop business model. Wouldn’t many employers like to have a cheap, subservient work force that, for all intents and purposes, has no legal rights?

Unfortunately, the answer to this question is yes. And that’s because entities like Miller & Long – who dominate their share of the market – are forcing many once-reputable companies into utilizing the same tactics as them in order to compete. This is the essence of the “race to the bottom” business model espoused by the ABC and defended by their conservative allies in the US House and Congress.

And what has been the result of this “race to the bottom?” The ABC likes to claim that they represent 80% of the construction market today. We would dispute that. But, for argument’s sake, we’ll accept their claims.

Now, let’s examine the result of the open-shop domination of the construction market. For starters, 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, actual average hourly pay for construction workers in 2006 was only $18.29 – 17% below their 1973 earnings, adjusted for inflation.

Additionally, even when contractors are making money, workers are not seeing the gains. According to the federal government’s economic census, contractors’ profits grew between 1977 and 2002. However, workers did not get their fair share of the gain – instead the proportion of construction receipts paid to payroll and benefits actually declined by almost 14% during that same period!

This would be a ludicrous situation if it weren’t for the serious damages that Miller & Long, and by extension the open-shop business model, has done…and continues to do…to working families and communities all across this nation. To put it bluntly, the entire open-shop business model maintains no affinity to its country, the communities in which it works, and its fellow citizens. The Miller & Long/ABC/open shop, “race to the bottom” approach undermines all aspects of a fair marketplace and in so doing they emphatically and proudly thumb their noses at the USA, while simultaneously exploiting the hopes and dreams of poor and desperate illegal immigrants who simply desire to care for their families.

America’s building trades unions will never stop in their quest to expose the ABC and the open-shop for what they truly are…the defenders of an abhorrent business model that is contrary to our American beliefs whereby those that work hard and play by the rules are summarily rewarded with success.

We will do our level best to educate Members of Congress, the media and the general public about the true nature of the ABC and their advocacy of a business model that is nothing more than a cancerous growth upon the construction industry and communities all across this nation.

And we will never, ever, apologize for advocating a business model – epitomized by project labor agreements – that offers so much in the