Why Should We Consider the Philly Building Trades a Progressive Organization?

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If I told you there was a political organization dominated by white suburban men who basically control the political system of a city they don’t even live in, for the purpose of extracting monopoly profits for themselves at a cost of lower real wages for most city residents, I don’t think many of you would call that a “progressive” organization.

And yet if I told you I’m describing the political program of the building trades unions in Philadelphia, many of you would see the word “union” and automatically mentally substitute in “progressive.”

But in its current form, the building trades unions are not a progressive organization. The purpose of the organization is to use its political clout to essentially monopolize large construction projects in the city, keeping out competition from non-union shops (many of whom are perfectly well-trained and capable as Pat Gillespie reluctantly admits about a quarter of the way into this WHYY debate with Tom Ferrick), and thus extracting monopoly wages for their members – monopoly wages that they then take back to the suburbs where most of them live.

This can add up to 30% to the cost of a new housing or office project, which is then passed through as higher rents to the eventual tenant families or businesses. The higher rents lower real wages for the tenants, reducing the amount of disposable income they have left over after they’ve paid their monthly housing bill. Any way you slice it, the labor-affiliated Economic Policy Institute’s cost of living calculator says Philadelphia’s cost of living is too high for the area median income. The cost of living needs to come down, and the two biggest factors in the cost of living are housing and transportation. In some neighborhoods in Philly, combined housing and transportation costs can eat up 90% of household income.

The real progressive economic agenda for Philadelphia is A Week’s Pay for a Month’s Rent – lowering median rents to around a quarter of Philly’s area median income, and lowering the combined cost of rent and transportation to around 40% of AMI.

Currently, the building trades are pushing costs the wrong way. But that doesn’t mean they can’t be a constructive part of the solution. A few months ago at Axis Philly I outlined a political agenda on land use that would reduce rents by promoting more total housing construction, and which crucially would not require running afoul of the status quo in the construction labor market.

It’s a real problem for the trades that the public (including people like me who have a default ideological inclination to root for unions) is increasingly frustrated with high housing costs and do not see the trades as the good guys on this issue. It’s really telling that Pat Gillespie was not able to make a single persuasive argument as to how the trades’ activities help the majority of Philadelphians. Check out the interview – he doesn’t even try to make the case that their organization’s interests complement the broad public interest, and that’s why they’re losing.

What Philly actually needs is a new political coalition between the building trades, infill developers, and Smart Growth-minded environment and transportation activists whose singular goal is to maximize total building permits, primarily by slashing regulatory barriers to more total infill construction. The trades are going to have to make their peace with mixed union and non-union projects, but they were going to have to do that anyway. The benefit will be greater demand for construction work in the city, which would also mean more opportunities to grow their membership.

This entry was posted in Miscellany.

21 Responses to Why Should We Consider the Philly Building Trades a Progressive Organization?

  1. Matt Thomas says:

    Who cares where these union workers live?
    Center city, as well as most of Philadelphia’s overall infrastructure that you and I know today was built by the same high skilled union tradespeople.
    Further, these “outsiders” pay a 3.50 percent wage tax on their gross income for the privilege of working in a city whose services are provided first and foremost not for themselves but for many thousands of poor residents whom, through no fault of their own, cannot possibly support their own town.
    Finally, Philadelphia’s city officials and their tax collectors are delighted to get those monies.
    Apparently it is left to you Jon and a few others to go on carping and kvetching over this issue while hardly anyone else gives a rat’s ass.

  2. Jon Geeting says:

    I care, and so should every other Philadelphian. The arguments you are supposed to be making are:

    1. those monopoly wages are spent at city businesses and help support the city economy.
    2. those monopoly wages put upward pressure on the wages of non-union contractors.

    Neither of those arguments are actually true in this case. Most of that money is going to be spent outside the city on housing, or wasted on gas, or spent at businesses in the suburbs. And the fact of the monopoly means there is no upward pressure on non-union wages.

    Even if we suppose there is a tiny bit of truth to both of these arguments, those positive effects on the Philadelphia economy are cancelled out many times over by the higher cost of living that the construction monopoly imposes on city residents.

    If each household could pay about $100-200 less a month on rent because citywide construction costs fell, that stimulus would be many many times greater than whatever is added to city GDP from building trades member purchases and wage taxes.

    Those poor residents would be able to do much more to support the local economy if they weren’t getting sucked dry by needlessly high rents that are substantially out of step with the area median income. If we can get combined housing and transportation costs down to 40% of area median income, there will be a lot more disposable income indeed to support the city economy and revitalize neighborhoods.

  3. Leo Knepper says:

    The other issue is that unin influence in city politics keeps many residents in poverty. All public sector work in Philadelphia falls under Project Labor Agreements (PLA) as does most private construction for universities, etc. PLAs require that ONLY union labor be used in the completion of said projects.

    How is this related to poverty in Philly? As noted most union members actually live outside of the city, roughly 20% of tradespeople are unionized in Philly. Ergo 80% of the tradespeople in the city are actually barred from working on public projects and many private projects? Oh and for the private projects that use non-union labor, the unions make sure to make the conditions miserable (don’t believe me? Google “Post Brothers”)

    The lack of diversity within the unions (particularly the skilled unions) isn’t just anecdotal. According to data compiled by the National Black Chamber of Commerce:

    “Seeing the data Mayor Nutter summarized it as “Economic Apartheid”. His statement is correct and justifiable. This city has a minority population of 55 percent (46 percent is Black alone). Here is the breakdown of Philadelphia construction unions. Remember, “laborer” is the lowest paying level and it is here where they stuff the few minorities they have. The next token level is cement masons and as the pay level raises the minority representation decreases. The Philadelphia story: Laborers-54%, Cement Masons and Finishers-30%, Drywall Finishers and Tapers-26%, Electricians-25%, Painters and Paperhangers-25%, Operators and Operating Engineers-24%, Roofers-20%, Carpenters and Carpet Installers-19%, Floor Layers and Installers-17%, Crane Operators and Oilers-17%, Ironworkers-17%, Sheet Metal Workers-Bricklayers and Caulkers-14%, Plumbers and Plumbing Mechanics-12%, Plasterers-11%, Glaziers-11%, Sprinkler Workers-10%, Mechanics-7%, Seamfitters-5%, Elevator Workers-2%, Insulators-0, Tile Setters and Finishers-0.” (Via http://www.nationalbcc.org/index.php?option=com_content&view=article&id=621:economic..)

    So in a nutshell the unions have managed to keep a large segment of the minority population from earning a living. But hey, they right checks to the Democrats and other Progressive causes so just ignore it.

    • Matt Thomas says:

      I am a white man and was one of 7 kids with a single mom.
      Upon dropping out of school after failing (twice) to pass the out of the 9th grade, my first decent job after working as a “stock boy” in a department store was as a laborer and I am still proud for having held that title.
      The older guys I worked with who taught me the ropes were all African-Americans and this included my boss, Elijah (or “Old Pop Lizza” as we called him) who treated me like my own father who himself was killed when I was 9.
      As a “laborer” I was married at 18 and bought our first home by age 21. When 29, I was hired as a union organizer.
      Enough about me…what’s more important is the fact that those black union laborers in Philadelphia that you seem to lament over possess high working skills that most people are not even aware of. Further, they earn a family and community supporting income as well as being covered by both healthcare and a pension.
      Most important of all, these same hard working men and women are proud of both their practiced skills and of their strong union.
      They need no one’s commiseration.

      • Jon Geeting says:

        They don’t need pity, they need jobs. And the building trades aren’t integrating. They’re still 81% white in a city with a large black working class population.

      • Unions weren’t, and aren’t, always perfect. Some of them, as noted, need to be pushed a lot harder to do a better job. What’s the alternative? Just hoping the boss will pay you more? Good luck with that.

        • Jon Geeting says:

          I want to support unions. I want to support a different version of the building trades that pushes for more total construction in the city, rather than monopoly rents only for themselves. I think many of their protectionist bad habits would get rounded off if they were part of a pro-development coalition alongside developers, real estate agents, and smart growth environmentalists.

  4. Matt Thomas says:

    I noted your earlier reference to the too high rents and wasn’t certain of its correlation to this issue. It is your belief that this initial and one-time cost of building quality housing in the city continues on as a never-ending factor in the setting of monthly rents?
    Whether this construction applies to public (rent-fixed-to-income) housing or private for-profit real estate investors, there is no good reason why construction costs must be passed on into perpetuity. Of course, if the latter breed of greedy corporate landlords is part of this mix then the issue becomes one of the city pursuing strict rent control regulations.
    Whether this is public, for-profit or both, it sounds like work cut out for experienced community activists who might organize a Philadelphia Renters Alliance as a means to force the parties into negotiating more affordable rents.
    Any threat of a mass rent strike would send these guys running to their lawyers whom would quickly advise them of the horrendous imbroglio involved in evicting families…and where it involves small children (which will include many thousands) the near impossibility of the entire shebang.
    Jon, your heart seems to be always in the right place but one fears you occasionally wander a few degrees off your compass heading.

    • Jon Geeting says:

      The correlation is that the high building costs prevent enough total housing from being built. Rents are higher than area median income, so in many cases the cost of the inputs will end up forcing the eventual rents to be too high for Philadelphians to afford. The problem is the apartments that aren’t getting built because the projects don’t pencil out. Reduce the cost of the inputs – labor, land – and rents can be lower, and more projects will get built. The increase in the supply of apartment units will reduce citywide rent levels.

      I think you’re on the wrong track with rent control regulations. Those don’t work. A city like NYC might need to employ something like rent stabilization policies, because the demand curve for NYC housing is relatively flat. That is, if they build a lot of new housing and rents fall, that’ll just induce more people to move to NYC. Because it’s a global city with a global draw.

      Philadelphia isn’t like that. There are a limited number of people who would want to move to Philly if rents fell. The city absolutely can build its way out of its housing affordability problem, and the key is reducing the cost of the inputs.

      • Matt Thomas says:

        The cost of land is dictated by market values and I don’t know how one gets around that…unless you have some ideas.
        Reducing the cost of labor means constructing housing units with materials, technologies and standards that the much less skilled non-union labor can handle. In a nut shell this means cutting corners on quality, long term durability and perhaps even safety.
        Happily, there are ways to at least cut building costs rather significantly and this would involve innovative architectural designing as well as the synergy of factory-built modules with conventional construction practices.
        Should such a cost-cutting scheme allow for an increased pace of construction on a extended timeline this would further enhance employment opportunities.

        • Jon Geeting says:

          Matt, please read my piece over at Axis Philly that I linked to. I spell out my idea for reducing land price inflation in there, namely by taxing land value at 5 times the rate for buildings/improvements. A land value tax would induce many vacant land owners and surface parking lot owners in Center City and the surrounding areas to either build new buildings, or sell their land. Many of the expensive parcels that are being held off the market are being used as speculative assets. Their owners are waiting for rents to go higher before they’ll build on them or sell them. Taxing that land at a higher rate than buildings would push more of them to sell the land at today’s price, rather than next year’s price, and this mass sell-off would push down land prices and rents.

          A lot more projects would get built in a world with less land speculation. The Philadelphia realtors association and the Planning commission are both already on board with this policy, and I think it would obviously benefit the building trades to support it too.

          As for the other inputs, I agree with Pat Gillespie that there is a lot of middle ground between highly skilled union labor and unskilled black market labor, and there are perfectly good reputable contractors doing what he terms “union avoidance” by paying their people well and doing high quality work. I understand why, as the manager of a cartel, he would not want these shops getting more mid-rise housing construction projects in the city, but as someone who cares more about building more total infill housing than I care about sustaining monopoly wages for suburban white non-Philadelphian men, I don’t see the problem.

          I do agree that advances in modular construction technology look very promising, and could potentially bring down the cost of housing. But we have also had elevator technology for a long time, and sadly it is not in wider use because zoning regulations stand in the way of wider deployment. The potential for more total jobs is there, but this is another reason I want to see the trades get involved in pro-density land use politics.

  5. Ed H. says:

    Pimping for scabs now? What’s your solution? Lower wages for everyone and call that a success? Spread the misery?

    I guess after being so strong for scumbags like Brett Mandel, and wanting to dismantle the living an middle classes of the PLCB, this is the progression of turning against liberals for this blog.

    • Jon Geeting says:

      Turning against liberals? Like when the Building Trades endorsed Pat Meehan? Come on Ed. This is not a progressive organization. It’s an organization of suburban white guys who drive up housing prices on poor Philadelphians and then pretend to cry whenever anybody points out that their monopoly does not benefit anybody outside their organization. I’ve outlined a number of policies that would bring down costs without directly taking on the construction monopoly – land value tax, more by-right construction, ending statutory parking minimums, and incentives for deployment of modular construction. But don’t pretend the monopoly wages don’t add to the cost of inputs and help drive up housing prices too. Lowering the cost of living is the more progressive goal here. Far from spreading misery, lower monthly housing payments for every Philadelphian would spread the prosperity. Imagine if everybody had an extra $200-300 bucks a month because their housing costs went down.

  6. Matt Thomas says:

    I’m not into real estate but taxing an unimproved vacant land much higher looks to be a smart strategy. If both the realtors and planning commission are going with this idea it seems like all one needs is some political push…and also on those anachronistic zoning people.
    On my previous comment as to the much less skilled non-union workers, I see little difference in their capacities whether black or white. None of these workers experience apprenticeship training and mentoring that even approaches the high standards of the extensive and demanding union model.
    Further, when one considers the erection of new or refurbishing old city buildings this involves a great number of the skilled trades; heavy equipment operators, foundation pile-drivers, iron workers, welders/fitters, cement, brick and stone masons, carpenters, fire control sprinkler installers, painters, glaziers, dry wall and floor installers, (possibly asbestos/haz/mat technicians) as well as electricians, plumbers/pipe-fitters…and of course, the laborers along with a few trades I probably forgot.
    As for those reputable non-union contractors who pay their people well and get quality work, Ill let you in on a secret Jon: Most of these quality workers are actually union members who are paid their full union scale by that same contractor. Relying on non-union labor, the building project would likely fail. And in some cases, these non-union operators employ union tradesmen almost exclusively.

    • Jon Geeting says:

      I agree with your assessment of the politics of a land value tax. The planning commission and the realtors both support it. What they need is some grassroots backing from the building trades unions to get it over the line.

  7. GDub says:

    I think your goal is right on the money but the policy formulation is somewhat wrongly ordered.

    The real–highest priority– goal you articulate is lowering housing and transportation costs for Philadelphia residents. Succeed in this and you’ll likely also have positive impacts on more trade residents living inside the city and spending more money inside the city. In that sense, the “race” and residence of workers right now aren’t particularly important so long as the primary goal is advanced.

    The issues that impact that goal are:
    1. the ability of construction unions through restricted bid eligibility to defer projects (private and public) to ensure their own cartel/guild members have work in the future. We clearly could have a lot more work going on right now if we had more eligible firms doing the work. That means more bridge repairs, apartments, and everything.
    2. The ability of unions to use sympathetic language to tightly define what American citizens are eligible to work through atrocious terms like “scab” and the ability of unions to justify disgraceful and un-American acts against non-cartel/guild members. If there is a significant racial disparity in construction union membership (particularly at high level classifications) around US cities, we should be asking why, and so should the Department of Justice (good luck with that). Graduation from an accredited tradesman course (particularly at the vo-tech level) should be the only requirement to work on a construction site. Working on a job a person is qualified for isn’t a club, its a right of citizenship.

    Trying to develop a policy that targets particular groups or localities for employment preferences quickly becomes unworkable. Break the cartel, have a reasonable (and higher) minimum wage, and better things will happen.

    • Jon Geeting says:

      Good points. I’m mainly bringing race and location into the discussion to drive home the point that we’re dealing with a very conservative wing of the labor movement, not an especially progressive organization. The public sector unions and service employee union members look like Philadelphia, they mostly live in the city, etc. This is a cartel of primarily non-Philadelphian outsiders, and their monopoly wages come at the expense of Philadelphians by driving up their cost of living.

    • Matt Thomas says:

      “…disgraceful and un-American is it…sounds like something a Joe McCarthy or Roy Cohn would say.
      For your enlightenment, the term ” SCAB” is protected speech and in too many cases it fits.
      Your offered solutions share more in common with a southern state’s “right to work” agenda (right to work for less) than anything one will or should stand for in a northern city.
      The racial disparity issue has been vetted by a number of federal administrations over the years, both Democratic and Republican, going back at least as far as Nixon’s “Philadelphia Plan.” In each of these situations, the unions had either met the mandated goals or, at the very least, were deemed to have made a good faith effort to comply.
      As for your vo-tech schools, the very best of them cannot begin to compare with the union’s in-house programs, while yet others remain dumping grounds for troubled and at-risk kids.
      I am currently instructing classes for such misused minority students as part of a USDOL project. These are good kids who have been screwed over by a flawed education system that has been too long invested in years of systemic failure.
      There are yet other reasons that you choose to ignore, including the fact that many young people (both black and white) who enter federally registered union apprenticeship programs need to be enrolled in remedial courses in math, measurement, writing and communication skills which more than a few fail to pass through. Moreover, in their orientation the prospective apprentices are strictly counseled:
      “You are expected to be present at class or on the work site every day and on time. You will not do drugs. You will respect your supervisors, instructors, mentors and fellow apprentices. Further, you are expected to do your very best at all times both in the classroom and out on the work site.
      Your apprenticeship is a pathway to a full journeyman’s status. This is not simply another job until something better comes along. This is the first day of what is destined to be your entire life’s work and career.
      When fully certified as a journeyman, you will be equal to the very best in the world.
      Good luck…and carry on.”

      • Jon Geeting says:

        If the standards for these federal “efforts” at racial integration were anything like the others, then I am not surprised that they didn’t do anything to integrate the building trades.

        This is nothing like “right to work.” No one is saying that workers who are hired at a union shop shouldn’t have to pay union dues. I am saying that the building trades should not have a monopoly on construction projects in Philadelphia. I think it’s clear this monopoly is preventing the number of housing units from being built that otherwise would be built if labor costs were lower, and if the restricted labor supply didn’t create a check on how many projects could be built at one time. Progressives need to get the trades into a broader political coalition whose goal is maximizing building permits, not restricting the number of projects happening at a given time.

        GDub is right. Graduating from Vo-tech should be a sufficient credential to do construction work in the city. If it’s not, then our Vo-tech schools are not doing their job. That’s a problem to be solved by improving the Vo-tech schools, not protectionism.

  8. GDub says:

    I don’t have a problem with collective bargaining. I do have a problem with using the collective bargaining process to benefit a small group of cartel members, which is what building unions do. The current system is built on restricted membership based on some obscure standard of “readiness.” I think its un-American because it is a system designed for the medieval world.

    40+ years of “good faith efforts” and you still have a racial disparity problem? Sounds like, despite the good faith, you might want to try a different effort. Your comments on the educational system, vo-tech, and general human character are not within a union’s scope of efforts and are essentially none of your business. Might be more useful if employers had a bigger role in training and certification programs to broaden the scope of “qualified” people–maybe even one that meets demand.

    Still comes down to Jon’s bottom line–the current process raises housing prices for those who can least afford it. Nothing in your response indicates anything to address that.

  9. Matt Thomas says:

    So now it is a “cartel?”
    Organized labor’s agenda is anything but medieval… it is rather our educational system that serves best as an anachronistic model that nearly every developed nation has left far behind. Again, do not take my word for this dismal situation but read up on Bill Gates who has both the will and resources to pursue this subject in great detail.
    There are no constraints on becoming a union journeyman (a qualified artisan) other than one having the ability to meet the criteria as well as successfully passing through a federally supervised apprenticeship program. You go on to say that it is not appropriate for labor to be concerned over the present state of our educational system…and of “general human character”…that it is none our business. Forgive me, but just who in hell do you think you are to question the right of anyone to be sincerely troubled – even alarmed over our young being cheated of future employment opportunities by a system that ill prepares them for commonly needed workplace skills to say nothing of the increasingly demanding world of emerging technologies?
    By the above term on “human character” are you suggesting that one should not be concerned with an applicant who is presently using drugs and/or finds it impossible to show up for classroom instruction or on the work site?
    You further suggest that it would be “useful if employers had a bigger role in training and certification.” Employers have always had a meaningful role as these are now and always have been jointly administrated labor-management programs….who do you think manages the work site where the hands-on training of apprentices takes place?
    If your intention was to pursue a productive discussion of this subject you have failed miserably, for in refusing to lay aside your boorish behavior this has done no more than embarrass yourself.
    One is further forced to state that based on the foregoing tripe posted by yourself you really have no idea of what you are talking about and I will not continue to piss into a hot wind apparently driven by a near invincible ignorance.