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Cloud hanging over labor deals

10:43 am, August 23, 2011

Lou Coletti

By Daniel Geiger

As negotiations again tick down to the 11th hour for another one of the New York construction industry’s labor unions, experts are questioning the longer term prospects for organized labor in the city.

As of last Tuesday, cement workers in the city had not come to a new labor agreement, a situation that could result in a strike by Wednesday if a deal or an extension to the talks isn’t reached. If cement workers walk out, it could threaten progress at several construction projects around the city including the World Trade Center.

“The two sides are still far apart on the issues,” a source familiar with the negotiations said on Tuesday.

The impasse comes after a near strike in July by the city’s operating engineers, who also struggled to reach a new labor agreement that required them to submit to work-rule changes that would trim costs.

In the case of the cement workers, the Cement League — an industry association that represents the subcontractors that work with the union — has asked organized labor to take a 20% wage cut for residential and hotel construction jobs in the city. Few other contractor groups have asked their unions to make such dramatic concessions.

The contentious labor agreement is part of a succession of contracts that came up for renewal this summer in the unionized construction industry and is one of the last to remain unresolved. The carpenters also don’t yet have a renewed contract.

A host of building trades, including painters, electricians, and crane operators, which together employ thousands of workers, came to agreements this summer that trimmed the costs of their labor, primarily by adjusting work rules to make them more productive and curb costly overtime charges.

But even with the savings realized by the agreements, construction experts still question whether the cuts will be enough. Some experts say that the industry could be in for systemic change in upcoming years.

“I’ve never seen so much uncertainty for the industry,” said Lou Coletti, president of the Building Trades Employer’s Association, a group that represents construction contractors.

Earlier this summer, Coletti’s group said that its members would opt out of the New York Plan, an agreement that had long been a kind of rule of law for the city’s union construction industry. Without it, contractors can theoretically use both union and non-union labor on construction jobs and union laborers will no longer be constrained by jurisdictional rules that in the past, say, prevented a carpenter from installing a light switch because that work was strictly for electricians.

“The term I’m beginning to hear is mixed crews that work at open shops,” said Steven Spinola, president of the Real Estate Board of New York, an association that represents the city’s real estate industry.

Steven Spinola

Spinola said he and his members realize that organized labor should come at a premium because union workers and the managing subcontractors that employ them typically have superior expertise compared to their non-union counterparts.

He said that REBNY members, who typically employ unions on construction jobs, still felt pressure to lower costs, especially in the face of renewed concerns about the health of the economy and the potential for a double dip recession.

Spinola said that the issue had become so important to REBNY members, which include the city’s largest commercial and residential developers, that the organization was exploring ways to be directly involved in future labor negotiations, which typically take place only between the unions and their contractors.

An industry where non-union workers toil alongside organized labor and fewer union workers do more of the work once seemed unthinkable in the city.

The city’s real estate market used to be a bastion for union construction workers, a place where lucrative projects justified the additional costs of organized labor.

Many construction experts still say that unions have an advantage for the quality and certainty they bring to a job.

Frank Sciame

“Dollar for dollar, at the end of the day when schedule and quality and safety are all considered, unions are the way to go,” said Frank Sciame, a construction executive and developer who indicated that using non-union labor brings risks that can prove more costly in the end, such as faulty work, or busted construction deadlines.

“I think we’re going to have to wait and see if these are sufficient,” an industry source said.

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