(Mike Chamberlain/Nevada News Bureau) – For years Nevadans joked that the state bird was the crane – the construction crane. Flocks of them could be seen hovering over Las Vegas with new arrivals appearing weekly. New residential and commercial developments sprang up in every section of the Las Vegas valley. Construction grew to become the second largest industry in the state.
With the mortgage meltdown, the credit crunch and the recession, construction has now ground to a virtual halt. The cranes have begun disappearing. Construction-ready lots around the valley are sprouting sagebrush. And the jobs have disappeared.
According to the Bureau of Labor Statistics, construction employment in the state declined nearly thirty percent from September 2008 to September 2009 and is down over forty-three percent from its peak in February 2006. Almost 60,000 construction jobs were lost in a single year.
“We’ve been spoiled here in Las Vegas,” said Steve Ross of the Southern Nevada Building Trades Council in a recent interview. The Building Trades, as it is also known, is a conglomeration of more than a dozen AFL-CIO affiliated unions.
“There’s been no city like the City of Las Vegas in the history of construction. Seattle, Los Angeles, Chicago, New York, nowhere else has had decades of continuous construction. It’s second only to gaming and tourism. That’s not a bad thing, but it is a bad thing when building stops,” said Ross.
Ross estimates that “probably about fifteen percent of the 22,000-23,000 members of his affiliates are unemployed. “In the Northern Nevada Building Trades, it’s more like fifty percent,” said Ross.
Hotel-casino projects on the Strip, traditionally a union stronghold, have all but vanished. CityCenter is the only major development currently being built, and it will soon be complete. Several other planned ventures have been canceled or postponed indefinitely, some of them in mid-construction.
Marc Furman of the Southwest Regional Council of Carpenters predicts that half of his local’s 10,000 members may be out of work when CityCenter is finished. “There was $21 billion in work projected in ’07-‘08. The Plaza was $4 billion – never got done. Echelon was $4 billion – never got done. Fountainbleu was $3 billion – it’s stopped, seventy percent complete. That’s over $10 billion right there. There’s just no way to replace that volume of jobs.”
Furman said prospects for the near future are not bright. “The construction industry in Southern Nevada is going to be very slow at least for a year or two…Nevada is overbuilt,” he said.
Unions’ piece of the construction pie has been shrinking for years. As Warren Hardy of the Associated Builders and Contractors of Southern Nevada – a group whose current membership consists entirely of non-union contractors – stated, “Twenty years ago, fifty percent of construction was union. Today it’s twenty percent. Eighty percent of all construction work is non-union. A lot of people think it’s the other way around.”
“Light commercial and residential are almost one-hundred percent non-union now. That’s not just true locally. It’s a national trend,” he said.
Hardy said he hasn’t seen an increase in organizing activity by unions. Their focus has been on increasing their share of the market, he said.
“They’ve become aggressive in trying to win work. It’s a mad scramble out there for available work. Organizing activity has certainly not been on the upswing. They’re concentrating on putting their people to work,” he said.
“I can’t create work,” said Marc Furman. “All I can do is make sure that what’s there goes union.” He identified some recent successes.
“We have the Smith Center [for the Performing Arts] downtown, the North Las Vegas Convention Center. The new Las Vegas City Hall will go union. The new Metro Police Department complex will go union,” he said.
It’s still not nearly enough to offset the losses in volume, however. “That’s maybe $2 billion worth of work, but it isn’t enough to keep 10,000 people working,” said Furman.
Unions face even bigger hurdles than usual due to the economic downturn and scarcity of construction jobs. Wages on the open market have fallen significantly while many union contracts provide for automatic increases, furthering the gap in labor costs between union and non-union contractors.
Ross’s group has been working on “developing good relationships, better relationships” with general contractors, subcontractors and government officials. Cultivating relationships with government officials is extremely important to his organization, he said.
“The Building Trades, by its nature, is supposed to be a political machine,” said Ross. Richard Trumka, the AFL-CIO’s President, is in Washington, DC working with the Obama administration on labor issues, he said.
Ross recounted a victory closer to home, during the last session of the Nevada legislature. “One of the bills of major interest to the Building Trades was AB148, the OSHA bill. Fortunately we had friends there who were interested in worker safety.”
The bill requires, among other provisions, that all construction workers complete an OSHA 10-hour class and all supervisory employees finish an OSHA 30-hour class. It passed and is now the law.
“We back those candidates who support working people,” Ross stated. “It’s not a D or R thing” although he noted that most of the current candidates who fit the Building Trades’ definition of supporters of working people are Democrats.
This was certainly true in the last election and very much so in Clark County. To Clark County Commission candidates who made it to the general election, unions donated $150,500. $106,800 of this came from trade unions, while $76,300 of it came from affiliates of the Building Trades. All of the money went to Democrat candidates, all of whom won their seats.
Unions are now seeking the help of their political allies, for whom they worked hard and successfully in the last election cycle.
In September, the County Commission discussed instituting a policy that would require a Project Labor Agreement (PLA) for all County public works projects over $100,000. PLA provisions can vary but generally require that at least some employees for every contractor be union members and that contractors pay benefits into the union trust account whether they are union or not.
An overflow crowd heard Ross and Hardy argue the issue before the Commission. Both were named to a working group that is to investigate the topic and report back to the Commission.
Hardy claims that PLAs raise costs and tilt the field in favor of union contractors. “The underlying provisions put non-union companies at a significant disadvantage. Terms of PLAs require companies to pay into the union trust fund but don’t give you credit for benefits you’re currently paying,” he said.
This puts companies in the position of either having to pay benefits twice or cutting benefits altogether, he said. “Second, it doesn’t allow a company to use all of its own employees. They can have seven rotating employees of their own but after that they are forced to hire from the union hall,” Hardy said.
Ross disputes the claim that projects governed by PLAs cost more and dismisses Hardy’s concern over benefits. “I challenged him to show me, show the Building Trades, what his contractors provide in benefits and if they’re equitable to what union contractors provide. He can’t – because they don’t provide the same benefits.” Ross asserted that PLAs ensure “local jobs for local workers.”
In another recent union battle, the County Commission generated controversy with its handling of a proposed Beltway improvement. Non-union Fisher Sand and Gravel was the low bidder on the $100+ million project. Las Vegas Paving, whose proposal was $4 million higher, protested on the basis that some of Fisher’s contactors were not qualified to perform the work.
Twice, the Commission voted to award the project to Las Vegas Paving. Each time, Fisher sued and the court ordered the county to re-evaluate the proposals. In the latest decision, the judge ordered two commissioners, Steve Sisolak and Tom Collins, to abstain from voting. Collins sued but a judge dismissed his lawsuit. Collins has since appealed the decision.
The County Commission has still not reached a final decision on the project.
Of the Beltway project, Ross declared, “I just want it done. It’s going to employ a bunch of people.”
Ross made it clear on which side his organization stands. “The last report I got was that Las Vegas Paving was ready to go. They’re just waiting for a Notice to Proceed. Fisher [Sand and Gravel] is an out-of-state contractor that will end up taking the money out of state. I don’t want that money moved somewhere else. I want it spent in Nevada,” said Ross.