MIKE POTTS : Builder Unions on the Mend : This Time, Recession Takes Toll on Adversaries

During a recession that has hit residential real estate hard in Orange County, the building and construction trade unions can take an odd comfort. The unions lost most of their house construction work to non-union builders during the last recession, in 1982, and never got it back.

From handling almost 90% of total construction a decade ago, union workers are building about 50% of Orange County’s projects today.

So, during this recession, the bad times don’t seem as bad at union halls, where workers can look to relatively steady work in constructing roads, public works projects and high-rise commercial buildings.

“We’ve been hit hard, but not as hard as the non-union” contractors and workers in the county, said Mike Potts, director of the Building and Construction Trades Council of Orange County, which represents 37 unions.

In fact, with the council’s so-called market recovery programs, several of the unions are hoping to win back some of the ground lost in the 1980s. These programs allow union contractors to pay lower wages, so they can underbid non-union contractors.

At age 29, Potts is one of the youngest directors of a building trades council in the country. The son of a National Labor Relations Board attorney, Potts took his current job two years ago after investigating wage-cheating on public works projects as an employee of the Orange County plasterer’s union.

Potts left high school early and earned his diploma while working on union road construction projects. He was in an apprenticeship program to become a boilermaker when he was accepted at California State University in Chico. Potts couldn’t decide between working or going to college. Not wanting Potts to miss the opportunity for a college education, his boss at the time threatened to fire him. Potts earned his bachelor’s degree in sociology and demography in 1982.

Several corners of his Santa Ana office are piled with pamphlets--announcing a job action, detailing the next fund-raiser for a diabetes charity. The walls are decorated with campaign signs for Assemblyman Tom Umberg (D-Garden Grove), a photo of Lech Walesa and a Grateful Dead poster.

Potts spoke recently about the state of construction trade unions in Orange County with free-lance writer Anne Michaud.

Q. How strong are the construction trade unions in this area?

A. Orange County and L.A. County are still fairly decent wage-paying areas. There are bad parts of the industry, and, unfortunately, I think some of the unscrupulous people would like to expand it. Lucky for us, it’s starting to turn the corner now because the non-union (contractors, workers and their clients) are starting to have a real problem in their training.

Q. How do you mean, turning the corner?

A. Well, from about 1982 on, the non-union (contractors) bid for our people. They went to our people who had the training, had five-year-long apprenticeships, and asked them to come supervise people who weren’t skilled.

What’s starting to happen now is that the second generation of non-union (worker) is coming along, guys that never had any union training. And they can’t do the work. The quality’s not there. Residential developers are starting to see that their product is starting to suffer.

When you’re arguing over the difference of somewhere between 1% and 3% of the final product price--which is the difference between paying usuriously low wages or decent scale--builders have to think about whether their houses are moving like the guy who has more skilled workers on his tract. Houses aren’t moving like they were three years ago.

Q. Will people pay the difference when they’re buying a house?

A. I’d pay it. The non-union people just aren’t skilled. The boards look like they were nailed up the same, but the union carpenter knows how to toenail something off (a way to nail boards that anticipates the jarring from an earthquake). The guy you picked up off the street just nails it straight in. When the earthquake happens, one board goes one way, and one goes the other.

The excuse I’ve heard is that it passes inspection. When people buy a house for $250,000 and up, the thought of it just passing inspection is probably not good enough. Do you want something that meets minimum standards, or do you want something that’s built right?

Q. Unions lost a big part of the residential construction business during the last recession, in 1982. What part of that market is still organized?

A. Each craft has varying degrees. I couldn’t really quote you exact percentages, but there are some that still have a pretty good lock. The cement masons do most of the slabs, the Teamsters still deliver most of the concrete, the sheet metal workers still do most of the heating and air-conditioning work. The electricians, the plumbers, they have varying degrees. Framing and laborers have less.

As far as share of the market goes in residential in the past two years, we’ve made a comeback. The impression that we’ve been kicked, and we’re down on our knees, is not true.

Q. So you’ve increased your membership?

A. Not in numbers of members, but in share of market. Membership is about stable (compared with the early 1980s). We’ve got about 35,000 members in Orange County locals.

Q. But you represent a greater percentage of the people working at any given time?

A. I’d say in 1982, we represented 90% of the construction workers who were working on projects larger than room additions on a house. Typically, smaller jobs are not something that we do.

Now, it depends on how you look at it, but I’d say we have probably 50% of the market. Actually, we have more than that since the recession started. Most of the work that’s going on now is in our market strongholds: roadwork, complex engineering, a utility annex. We’ll have the Anaheim Arena. Typically we’ll do the larger-scale, higher-tech things.

Right now, even though we’re in a recession and a lot of our members are hurting, they’re not hurting nearly as badly as the non-union workers.

Q. The leader of one of your unions has estimated that 9,000 construction workers lost their jobs in 1990. How many were union members?

A. Certainly there are some union members in there, but you have to remember that the way union hiring halls work, we share unemployment. Our people don’t just sit out of work all the time. People are out for periods of time, but not a lot of them tend to sit out for a whole (recession).

Q. So you’re getting new members now as a result of the recession?

A. Well, they want in. Everybody wants in now, everybody has seen the light. Two years ago, I’d be out on a job site, and they (the non-union workers) would just get in my face and tell me how screwed up the unions were--boy, you guys never did a thing for me. The same guys are knocking down our door to get back on the (job roster) books. But the people who are on the books ahead of them--our good members--take precedence.

It’s the same answer to everybody: Come on in, sign on up, get on the list. That’s all we can do for you. Now, if you want to go and organize the shop you were working for, then we can help you. And there are people doing that.

Q. What are your organizing efforts like now?

A. Several of the local unions are going to non-union workers, and they’re starting to gather mailing lists for newsletters. Basically, they’re supplying them with information, giving them some details of what a union’s all about without actual union membership. We’re not sending them propaganda. We’re just saying, this is what our wage rates are, here’s the news in the industry, if you’re interested, give us a call. I think that ought to scare the non-union (contractors and employers) quite a bit.

Q. The local electrical worker’s union has been subsidizing wages so union contractors can bid as low as their non-union counterparts. Is anybody else doing that? How prevalent is it?

A. We call it a market recovery program. Several unions, and they’ve been led by the IBEW (International Brotherhood of Electrical Workers), have them. Their members pay into the programs on a per-hour basis when they’re employed. When their contractors are getting beat out unfairly by competition that isn’t paying health insurance, that’s paying the men below area standards, the union allows (union contractors) to bid on a project and gives them a break on the wages. If it’s a funded market recovery program (the union will) make up the difference.

The unions have unfunded market recovery programs, too. That can mean a (union) guy willing to go out and work at a lower wage.

Q. How often can you do that?

A. You can’t go out and subsidize an entire market, but at the same time, you can hit key jobs. You can pick your targets carefully. It’s not just the big jobs. You might hit the best job in a particular area for a while. Soon, (non-union) contractors start to see that the area is not a good place to bid, and they stop bidding there. That’s the trick. It costs money to bid, and you don’t want to throw money away on no-good bids.

You can do quite a lot of it. If you’re pulling a couple of bucks an hour out of your wages, and the market’s shrinking up, going after a smaller market is pretty easy to do. You start coordinating your efforts, and (non-union contractors have) a real problem on their hands.

Q. What’s the point of the market recovery programs?

A. The point is to tell low-wage contractors who come in with these ridiculously low bids that we don’t want them here. If you aren’t willing to pay your people decently, go work somewhere else.

Funny thing is, during a recession is when it works best. The market’s smaller, your dollar has that much more power.

We might get upset that we don’t have the market share we once had, but what we have is a good chunk. The unions represent 16% of the work force in the United States. Who else represents 16%? Gosh, I wish it were the old days, I wish it were 50%, but that created its own abuses. I like it; we’re tough. We’re out there fighting. We’re pared back, but I don’t see us getting any smaller (in the future).

Q. When did you start the market recovery programs?

A. Sheet metal workers have had one for years. The IBEW has had theirs for about a year. Now there are several other unions that either have them in place or are getting ready to put them in place.

Q. You have said the recession has brought some abuses by employers, that they’re paying lower wages to desperate people.

A. Sure. In the construction industry, it’s really acute because you’ve got a lot of abuse of illegal labor coming over the border. We’re seeing things now like sub-minimum wage, no workers’ compensation, just basically slave conditions.

The construction industry is 7% of the work force (in the United States), but we have 26% of the fatalities and injuries. It’s not the kind of industry that should be paying sub-minimum wages.

Q. Where are employers paying low wages?

A. In what I would call the union strongholds--in large commercial and highway construction--people make a decent living. In some of the industries unions have been kicked out of, like some of the residential, we’ve seen framing contractors paying people sub-minimum wage. It’s inhuman, really, because you’ve got people who are using up their bodies for a living for basically the same pay as washing dishes.

Q. Yes, but doesn’t it give people jobs?

A. Well, what it does is it takes an industry that used to provide jobs that sent people’s kids to college and bought homes, and it transfers it to people who are escaping maquiladora-type work south of the border where they’re making 78 cents an hour. They come up here and $3 to $5 is a miracle.

We in the unions understand the plight of the guy who takes the $5-an-hour job. You can’t blame him. You don’t see the building trades out there trying to knock the day laborers off the street corner. We understand their need. Our complaint is with the industry itself, which has de-legitimized one of the best avenues for people to make a good life for themselves in this country.

Q. What do union members make in a year?

A. That’s a really broad question; we represent 37 different crafts. We represent everything from laborers all the way up to air-conditioning and refrigeration mechanics who use computerized testing equipment. It ranges all the way--and we’re talking about full time over a year--from about $25,000 to fifty-something (thousand). That’s what they are going to make if they are working full time.

But construction workers typically don’t work 50 weeks a year. If projects are flowing, people might make pretty good money for a couple of years. But they’d better put it in the bank because the lean years always come, and we’re in them right now.

Q. Orange County is full of empty office space and unrented hotel rooms. Where do you see the building trade unionists working in the next five to 10 years?

A. Believe it or not, they will still find work building those (offices and hotels). Not everyone is willing to sit out of the market.

If Disneyland should decide to expand here in Orange County, you’re talking about five hotels. And Hyatt and Marriott want to build (in Corona del Mar).

Our sectors of the market are stable: the Santa Ana River flood control project, the 91 Freeway extension, the toll roads, the Anaheim Arena, and possibly a Santa Ana arena. As far as build-out goes, the plans for this county are much larger and greater than what’s here now. Certainly it won’t be the boom it’s been in the last couple of years, but there will be work.

Q. What’s your position on a free trade agreement between the United States and Mexico?

A. I’m not anti-free trade and I think people mistake the AFL-CIO for being anti-free trade. The argument was not over whether we (the AFL-CIO) were in favor or not of free trade with Mexico. The question was, were we going to give the President’s negotiators a free hand to go into Mexico and negotiate an agreement that Congress could merely vote yes or no to without the power to amend?

It depends on how they negotiate it, but the last thing we want is truckloads of labor being trucked across the border up here legitimately. It’s hard enough illegitimately, but to make it that much easier. . . .

Q. What are you doing to open the unions to women and minorities?

A. People from the apprenticeship programs have been going to high school career nights and to different (job fairs). Certain trades have been more attractive to women; the fire sprinkler fitters have quite a number of women.

We could do more, there’s no doubt about it. The government mandates us to go and seek out women candidates, minority candidates.

Q. Does the ethnic mix in Orange County make it difficult to organize people? Are there language and cultural barriers?

A. Certainly. We haven’t made the kind of strides we should be making organizing the Vietnamese, Taiwanese and Koreans. I don’t think it’s a community that is anti-union. There are some problems with people who have escaped from places like Vietnam and Central America; they have a distrust of any kind of institution. They’re used to seeing trade unionists blown up in their (union) halls.

Q. Do you have people who speak Vietnamese and Chinese?

A. Several unions have (translator) contacts, but it’s not enough. It’s going to take a more concerted effort.

Q. Do you have any plans for that concerted effort?

A. Yes. The problem with us is that things tend to take place on an individual basis. The unions--although we represent all of them and they’re fairly unified--all have their own plans. But I can see it coming in the future. You can’t have the (ethnic) populations we have and ignore them.