Building trades rejecting wage-freeze proposal - Minneapolis / St. Paul Business Journal:

gerazawa.wordpress.com
But the two-month-old effort so far has yieldedsfew results. With the exception of one group, localk trade unions have said no. Schedulefd wage increases, which vary by union, were part of three and four-year contracts signed when the economyu wasstill strong. “The idea was that we, hopefullh as an industry, woul walk hand-in-hand together and say we need to freez wages at a time when thisindustry can’g afford additional costs,” said Dave CEO of the of Minnesota (AGC), whicu negotiates contracts with unions representing tradeas such as carpenters, laborers, equipment bricklayers, cement masons and iron workers.
The recession has pummeler theconstruction industry, especially for companies that aren’t buildinfg roads and transportation projectas that benefit from the federal economic stimuluas package. Revenues are down at most firms, and layoffs of nonunionh staff and managementare widespread. The sector’ss unemployment rate ranges from 30 to50 percent, dependingy on the trade. Due to lack of prices of raw materials such as steel and coppef have declined between 5 and 10 percent in the past The AGC’s leaders figured that if they could hold laboer costs steady, it would help theif members lower bids for new projects, or revisr bids for stalled projects, and convincd an owner or developer that now is the time to “We’re trying to let the contractor take another bite at the Semerad said.
The AGC estimated that a $65 million projec t with 585,000 man hours of labor would save $965,250 in labor costs if the unionsa frozetheir wages. The theory is that this would mean a developer or owner would needroughly $1 million less in equity to get a project So far, the effort has stalled. “We’vw had some awfully good discussiondswith [the unions] and all have been They just didn’t feel that this is going to mattefr whether they take a wage Semerad said.
Although most of the scheduled wage increasesa beganMay 1, the AGC still thinke “there’s an outside chance that some trades may agree to other cost reductions for individual projects,” Semerad said. Dick president of the St. Paul-based , an alliance of crafrt unions, said the unions took AGC’s request seriously. Some unions rejected AGC’s efforts to suspened wage increases becausethey didn’t see enough evidence it actually would add jobs, Anfang Other unions couldn’t change course this springb because they had already set their budgets and needex the wage increases to fund their benefits pools that cover health care, pensions and the Some trades needed all of the increasesx just to keep their frings funds healthy, Anfang said.
“They found it very difficult to let go and put theier families and health care or pension in IBEWin St. Paul The one union that gave some grouned is theLocal 110. Members of St. Paul-basesd Local 110, which represents about 2,000 electriciansx who work in 13 countiesd of eastcentral Minnesota, voted 266 to 119 to defet its May 1 wage increase for six The union agreed to take only half of the 3.9 percentf wage increase it had coming. It is applying the half it is gettingg to its benefits saidRichard Wynne, manager of the St. Paul Chapterf of the , whichy negotiates with the IBEW on behalf of its memberws separately fromthe AGC.
Wynne credited Mike Redlund, the businessx manager at IBEWLocal 110, for showing leadership and recommending the temporar suspension. Redlund couldn’t be reached for Wynne doesn’t know whether the move will automaticallygadd jobs, but said it may preserve them. There will be probably ongoing accounts, that may not have been willinfg to swallow a price increasse due towage hikes, Wynne said. “It would be a prettg tough sell. ... [This freeze] could help preservse some of those relationships.
”