The Des Moines Construction Council sees a growing need for signatory contractors, regardless of their trade, to have an outlet to share information and learn more about the challenges of managing not only collective bargaining agreements, but also the many aspects that union contractors face. Though the trades are different, there is a commonality amongst signatory contractors that DMCC hopes to serve. |
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Des Moines Construction Council Quarterly Meeting Scheduled |
We are pleased to let you know that the DMCC Quarterly Meeting has been scheduled for Tuesday, March 22nd from 3:00-5:00PM. The meeting will be held at the Holiday Inn Downtown Mercy Area – 1050 6th Avenue, Des Moines. DMCC members and all signatory contractors in Central Iowa are invited to attend. This meeting will serve as the formal business meeting for the year.
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Concerns about harmful policies included in
latest US House Pro Act
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AGC of America today urged all members of the U.S. House of Representatives to vote against an America economic competitiveness bill aimed at China. Though the bill—the America COMPETES Act, H.R. 4521)—includes widely bipartisan initiatives, like tens of billions of dollars for the construction of new and modernization of existing semiconductor chip manufacturing plants, House Democrats also included several harmful construction policies—including those from the PRO Act and the failed Employee Free Choice Act (Card Check) from years ago. Please find AGC’s key vote letter against H.R. 4521 for more details.
In June 2021, the Senate passed its version of this legislation—the U.S. Innovation and Competitiveness Act (S. 1260)—on a bipartisan (68-32) vote. The Senate bill included the funding for semiconductor manufacturing plant construction, but did not include the noted, harmful construction industry provisions.
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Construction employment in December remained below levels reached just before the start of the pandemic in more than half the states as firms struggled to find enough workers to hire, according to a new analysis of federal employment data released today by the Associated General Contractors of America. But the Biden Administration’s decision today to withdraw its emergency vaccine mandate for firms that employ 100 or more people will help firms avoid losing workers unwilling to comply with the new measure.
The decision by the Occupational Safety & Health Administration to withdraw its emergency temporary standard requiring workers at firms that employ 100 or more people to be vaccinated or tested weekly comes after the Supreme Court signaled its strong support for legal challenges filed by the Associated General Contractors of America and other entities against the measure.
The association challenged the rule late last year noting that the measure was unlawful and would do little to boost vaccination rates among construction workers, citing the fact that 64 percent of the construction industry works for firms that employ 99 or fewer people. With nearly 90 percent of construction firms having a hard time finding workers to hire, the rule would simply have encouraged vaccine-hesitant workers to move to smaller firms.
“The Biden administration is right to abandon its misguided vaccine emergency rule and we encourage them to do the same with a similar measure affecting federal contractors that we are also challenging in court,” said Stephen E. Sandherr, the association’s chief executive officer. “At the same time, we will continue to work with the administration to ensure its planned permanent vaccine rule applies only to workers in industries like healthcare that OSHA deems at high risk from the coronavirus.”
From February 2020—the month before the pandemic—to last month, construction employment declined in 26 states, rose in 23 states and D.C., and was flat in Montana. New York lost the most construction jobs over the period (-42,000 jobs or -10.3 percent), followed by Texas (-30,200 jobs, -3.9 percent) and California (-22,300 jobs, -2.4 percent). The largest percentage losses were in Louisiana (-12.6 percent, -17,200 jobs), Wyoming (-10.9 percent, -2,500 jobs), and New York.
Utah added the most construction jobs since February 2020 (10,000 jobs, 8.8 percent), followed by Washington (8,200 jobs, 3.7 percent) and North Carolina (7,900 jobs, 3.4 percent). The largest percentage gains were in South Dakota (10.5 percent, 2,500 jobs), followed by Utah and Idaho (8.2 percent, 4,500 jobs).
From November to December construction employment decreased in 16 states, increased in 32 states and D.C., and was flat in Nevada and South Dakota. Florida lost the most jobs (-3,400 jobs, -0.6 percent), followed by New York (-2,900 jobs, -0.8 percent) and Pennsylvania (-1,200 jobs, -0.5 percent).
Texas added the most jobs from November to December (10,400 jobs, 1.4 percent), followed by Ohio (5,700 jobs, 2.4%) and Missouri (3,700 jobs, 2.9 percent). West Virginia had the largest percentage gain (4.6 percent, 1,500 jobs), followed by New Mexico (3.2 percent, 1,600 jobs) and Louisiana (3.0 percent, 3,500 jobs).
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Ken Pinto is the author of a practical roadmap for business leaders interested in solving supply chain issues titled "How Much Is the Milk?" He's also the founder of Kenzai USA, an international supply chain solutions company. Opinions are the author's own.
Escalating materials prices, product scarcity and delivery delays against a backdrop of increasing client demand are stressing out contractors searching for a path out of the cyclical fray. Even if they don't immediately understand how, commercial contractors do have the ability to solve many of their existing challenges — especially those related to supply chain strain. Here are three ways construction firms can be part of the solution:
Using historical sales data, suppliers inventory product they know will sell more immediately as this approach diminishes storage concerns, risk of theft and extra capital outlays. Storing large product quantities, or quantities that consume a sizable physical footprint, adds a tremendous cost and hassle factor, forcing suppliers to move inventory around their store, yard or warehouse, risking potential damage and taking up in-demand product space.
To best prepare for inbound product requests, suppliers make product commitments long before they sell them, a process often rooted in "best guesstimate" methodology. As a result, products purchased can end up being the wrong ones. Even if sourced correctly, inventory guesses can also cause under or overstocking, a costly error that frequently worms its way into pricing passed on to the supplier's customers.
All suppliers want to sell more product and become a commercial contractor's one-stop-shop. However, many struggle with smaller staff sizes, inventory storage capability and free cash on hand, leaving them in a more reactionary role. This, too, has a trickle-down impact on all with whom the supplier does business.
Plan for demand
As a construction manager, I learned the value of material management and its positive effect on construction cycle time. It started with a general timeline for build projects. I realized that once foundation work begins, it took roughly 60 to 90 days before steel studs (among other materials) were needed on site. Armed with this information, I was able to communicate quantity demands and product SKUs to my supplier in advance, giving it ample notice to procure, more cost effectively, what was needed to fill my order. After a year of tracking material costs and talking with my suppliers, I discovered that I could get even better product pricing, decrease construction cycle time and increase product capacity for my suppliers by first giving them what they needed.
The two most requested pieces of information were SKUs and the date needed. The secret sauce to reducing my and my supplier's costs was by giving this information to my supplier in advance of when I needed materials on site. Ordering product 24 to 48 hours in advance squanders the opportunity for proper demand planning. A week or two advanced notice is helpful but typically isn't long enough to make a difference.
I learned that the greatest cost (and relationship benefit) was gained by providing 30-, 60- and even 90-day advance notice windows. When suppliers are given time to prepare for future sales, they can more efficiently source products at better prices, resulting in worthwhile cost reductions for their customers. They can also more confidently ensure delivery when needed rather than store unused inventory or content with delivery delays that set everyone back.
Contractors who understand the value of supplier relationships and collaboration find a way to order with longer lead times.
Establish supplier loyalty
Even though it may be hard to read (and even harder to accept), we are part of the problem.
A supplier's challenges are exacerbated when contractors make last-minute changes or threaten to buy from a competing supplier to save a few pennies. Commercial contractors have also been known to delay the process of awarding subcontracts in the hopes of finding a lower price (i.e., the buy-out). These tactics do little to solve the problem and instead fracture relationships and create delays that could be completely avoided by working more collaboratively with an existing supplier.
The winning formula is quite simple. When dealers have advance knowledge of product demand, they operate more efficiently. That, in turn, helps builders and contractors to do the same. The ancillary benefits include a more harmonious (and less acrimonious) relationship and a reduction in operation costs for all.
It's important to be loyal and align with suppliers that will support your business and view your relationship as a longer-term partnership beyond just one sale.
The current building climate and added insults of raw material inflation, limited product availability and increased shipping costs signal an urgency to our industry to flip the script and invert our previously adopted processes to give suppliers what they need to keep the flow of products and materials moving.
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Despite hosting the largest strike in the country, Iowa’s labor movement stagnated last year.
The number of workers in the state who belonged to unions remained flat at 93,000 from 2020 to 2021, according to a U.S. Bureau of Labor Statistics report released last week. While Iowa temporarily bucked the national trend of shrinking union membership, worker advocates and local labor leaders expressed frustration that they have not been able to capitalize on what the Des Moines Register/Mediacom Iowa Poll and other opinion surveys have shown is a rise in pro-union sentiment.
Iowa also remains far behind the nation as a whole in the proportion of its worker who belong to unions. According to the bureau, 6.5% of Iowa workers were union members last year as compared to the national rate of 10.3%.
Among its neighbors, Iowa had the second-lowest rate of unionization, behind only South Dakota, where about 4% of workers were in unions. To the north, Minnesota led the region with 16%. To the east, the rate in Illinois was 14%.
Iowa has trended away from organized labor in recent years. Since 2018, the number of Iowans who are members of unions has declined by about 20,000, an 18% drop.
But unions in Iowa seemed to get a boost last year, when about 10,000 United Auto Workers members at Deere & Co. plants, the majority of them in Iowa, went on strike in October. The largest work stoppage in the country in 2021 and the biggest in Iowa since the Bureau of Labor Statistics began tracking walkouts in 1991, it resulted in a contract promising substantial raises for the workers and improved retirement benefits.
Pro-union views also were on the rise across the country. According to a September Gallup poll, about 68% of Americans held a favorable view of unions last year, the highest rate since 1965.
But there was no concomitant surge in union activity in Iowa, where workers at just three companies held unionization elections last year. Employees formed a 100-member union at Clow Valve Co. in Oskaloosa and a five-member union at Midwest Air Traffic Control Service in Dubuque. They rejected a proposed 20-member union at a Cargill facility in Buffalo.
Labor leaders blamed the lack of union growth in Iowa on the challenges of organizing through the COVID-19 pandemic, the realities of operating in a small state where workforces are scattered and labor laws they said unfairly favor management. University of Iowa labor educator Paul Iversen, however, said it may be too early to discount the rise in unions' popularity.
“I still think the current militancy wave will hit Iowa,” Iversen said. “I can’t say for sure when it will happen. I can’t say it will happen at all. But there’s a lot of momentum and energy still.”
Without new laws around unionization, ‘the stakes are really high’
During a news conference in connection with the release of the Bureau of Labor Statistics report, members of the left-leaning Economic Policy Institute said unions nationally saw some significant wins last year.
In addition to public opinion polls showing that Americans have become increasingly pro-labor, institute President Heidi Shierholz pointed out that some unions gained national attention with successful strikes last year. The UAW, for example, secured a new contract for Deere workers that protected a pension program, boosted retirement bonuses and increased wages by 10% — about triple the wage gain most unions have secured over the last two decades.
Shierholz also pointed to the tightening of the labor market as low interest rates fed economic expansion. With increased demand for labor coming as the workforce shrank, companies have had to compete for a smaller pool of workers.
But Shierholz said the trend eventually will subside as COVID-19 case counts decrease. And she said organizing will continue to be a struggle for many unions.
Nationally, the number of workers in unions decreased by 241,000 last year. About 10% of workers across the country are in unions, roughly half the proportion when the Bureau of Labor Statistics started tracking the data in 1983.
In Iowa, the number of workers in unions has decreased about 19,000 since 2018, a 17% drop. Over the last decade, the proportion of workers in unions in Iowa has decreased to 6.5% from 11.2%.
Shierholz called on Congress to pass the Protecting the Right to Organize Act, a federal bill that has stalled as lawmakers debate debated trillion-dollar bills aimed at boosting the economy.
Among other changes, the PRO Act would increase financial penalties against companies whose managers violate labor laws, such as threatening to fire workers for unionizing. The bill also would allow unions to bargain for the right to charge dues to every member they represent, increasing their coffers and potentially giving them more resources to start union drives at other local companies.
“If policymakers fail to act, the downward trends in unionization will likely continue and the post-pandemic economy will be marked by widespread inequality and wage stagnation for people," Shierholz said. “The stakes are really high.”
United Food & Commercial Workers Local 222 President Leo Kanne said the PRO Act would help increase the number of unionized businesses in the state. Kanne, a veteran labor leader whose local is based in Sioux City, said he assisted workers trying to organize a couple bargaining units over the last year.
But he said managers told employees that the company would move their factories if they organized. He said some laid off pro-union workers. Though the managers didn’t directly lay off the employees for organizing, Kanne said, other workers became afraid to unionize.
“Companies, they can violate labor laws all the time when it comes to organizing,” Kanne said. “And there’s no penalties for that. It’s just a slap on the wrist. I’m frustrated.”
Physical challenges to organizing unions in Iowa
Iversen, the University of Iowa labor professor, said there have been other obstacles to organizing during the pandemic.
union leaders and employees don’t have much of a path to build solidarity when so many people work from home, he said. At factories and warehouses where most employees still report to work in person, some workers have become hesitant to meet with the co-workers, especially as COVID-19 outbreaks sickened hundreds.
“The employer has a built-in advantage (in) any union organizing campaign,” Iversen said. “They have a captive audience. They can force people to listen to their meetings. Union organizers have to meet people at their homes or bars or other places. They can’t force them to be there. Organizing is a very one-on-one process.”
UFCW Local 431 President Simplice Kuelo, who represents workers from Des Moines to the eastern edge of Iowa, echoed Iversen on the pandemic's effect on organizing.
Union representatives employees involved in organizing drives who approached workers at their homes after hours found many wanted to keep their distance, he said. He added that building a connection with a stranger while wearing masks also is difficult.
“You start a campaign, you’ve got to get familiar with the people,” he said. “You’ve got to build trust with the people. But how do you build trust? You’ve got to contact people. But when you contact a person, they want to keep their distance.”
Then there is the issue of worker concentration, or lack thereof. Des Moines is the Midwest's fastest-growing large metro, but its 709,000 population is a fraction of the 9.6 million people in Chicago, the 4.4 million people in Detroit or the 3.7 million people in Minneapolis-St. Paul — cities where the union presence is much stronger.
As a result, labor leaders don’t have a large employment center in Iowa to draw from, said Iversen, who used to represent unions in Minnesota. This means union leaders in Iowa often have to drive hours between factories, a barrier to efficient organizing.
Colin Gordon, a University of Iowa history professor, said organizing also is more difficult because a greater share of people have lost or left factory jobs and found service-sector positions at restaurants and hotels.
The biggest service-sector employers grow through franchising, meaning that workers at two McDonald’s locations, for example, are not necessarily tied together through a common ownership. Gordon said that as a result, recent high-profile union drives at Starbucks locations in Buffalo, New York, will have no direct impact on Starbucks employees in Des Moines.
Given these challenges, Iowa Federation of Labor President Charlie Wishman said the state’s local labor leaders need more help from national unions. He said locals need more money to hire organizers, who increase the number of members, who pay more dues, which leads to more organizers.
“A lot of unions want to concentrate on the East and West coasts and things like that,” Wishman said. “There’s an enormous amount of potential to grow in the Midwest — especially in Iowa. But like so many things in life, the Midwest gets overlooked, it feels like.”
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