Jim Kollaer's blog

If we are in the bottom of the recession river, it is much wider than most folks thought it might be.  The recovery is taking longer that the economists thought and the unemployed hoped for.

We have shown you info from this report several times in the past year.  It comes from the Bureau of Labor Statistics and tracks the recovery from the current recession compared to the last 4 downturns.  Already they have stated that this is the worst recession since WWII in the 1940s and that it seems to be going on longer that the previous ones.  We like the comparisons since this gives us and you an overview of the trends, this might also give us an indication as to when we will be out of recovery mode and into the growth mode.  

As much as the construction industry wanted to see 2010 come to an end, we are now faced with 2011 as a year of accelerating change.  Based on the latest figures from November of 2010, the nonresidential sector volume is continuing to slip by 16.5% year over year through November and the indicators do not point to a solid bottom yet.  Publically financed nonresidential construction led the way, while the private sector continued to slip.  Despite the volume numbers, some larger contractors told us that they had strong years in 2010 and are well positioned for 2011.

Many of the commercial contractors and craft contractors are working on a backlog of projects that were awarded in the 2007-2008 period.  They still have work that they hope will take them through this next year until the volume returns to previous levels.  To meet the need for business, several of them have diversified geographically or into the public sector.  

The Pittsburgh Tribune-Review reported yesterday:

“Eight illegal aliens in a minivan stopped by state police at the turnpike interchange in New Stanton Monday were headed to work on a publicly financed housing project in Jeannette, according to state police and housing officials.”

They were traveling in a van with a broken windshield.  When stopped by the police, several ran away.  They were subsequently apprehended and discovered to be in the country illegally.  They were traveling Maryland to Jeannette to work as framers on a $3.2 million public housing project.  

The illegal workers were hired by the framing subcontractor, O. C. Cluss Lumber of Uniontown, PA who was supposed to show documentation of the workers’ identifications and addresses to the general contractor,  Steve Catranel Construction of Pittsburgh.   [node:read-more:link]

There are many stories in the big city about wage theft from construction laborers, independent contractors and free lancers.  An article on the opinion page of the New York Times does a great job of showing the differences and the possible outcomes from the legal actions being undertaken by three individuals who have suffered from wage theft.  Coming from three entirely different vocations, a construction worker, a computer consultant and a freelance writer all share the common experience of dealing with employers who routinely fail to pay their wages as promised.

The article expressed doubt that New York’s newest Wage Theft Prevention law would be of much help to these three particular individuals, but mentions   [node:read-more:link]

Reed Construction Data (RCD) chief economist Jim Haughey has given us a glimpse at the next few years of potential construction volume in the top 50 markets around the country.

New York leads the way with $76.6 billion in planned projects.  (I suspect that it is not just one large project either.)  Next in line are San Francisco at $30.8 billion, Los Angeles at $23.6 billion, Washington at $15.8 billion and rounding out the top 5 is Boston at $11.9 billion.

Even though up to 50% of the projects in planning might not go under construction next year, that is still a sizeable chink of commercial work.  By the way, the numbers do not include single family but do include multifamily buildings, a market that is beginning to heat up for 2011.   [node:read-more:link]

According to Buffalo Business First, Governor David Paterson signed the New York Wage Theft Prevention Act into law on December 13.  The passage of this law will make New York employers pay both attention and reasonable wages and taxes on those wages.  Up to now, employers caught breaking the law were only required to pay 25% of back wages, causing some to under-pay employees on the chance that they may not be found out since the penalty if caught was so low.  Now they must pay all wages owed plus a penalty matching the owed-wage amount.

Interesting that Governor Paterson thought that the problem needed to be addressed in New York but Governor Schwarzenegger in California vetoed a similar bill when it was presented to him a couple of months ago, [node:read-more:link]

New content guidelines for San Francisco were passed by the city’s supervisors by a vote of 8-3 Tuesday.  According to the CBS News the new guidelines would require that every city – funded project would have a requirement for participation by city residents.  The initial percentage would be 20% hiring of San Francisco residents and the guidelines would increase 5% each year until the total participation reaches 50%.

Mayor Gavin Newsom will have the opportunity to veto the action if he wants to, but he has expressed support for Buy San Francisco moves in the past.  The mayor will review the details closely since there are several billion dollars in construction projects planned for San Francisco in the next decade.  Supporters claim that the 8-3 vote in favor of the legislation will ensure a veto-proof majority.   [node:read-more:link]

The New York Assembly did pass the Wage Theft Prevention Act (WTPA) that we wrote about last week.  They have now sent it to the desk of Governor David Paterson for his signature.  The governor sent a signal to the Assembly before the hearings last week that he was in favor of the bill and that he would sign it once the Assembly approved it.

An article in the NY Daily News quotes NY State Senator Diane Savino, one of the sponsors of the act, as saying:

“Stealing from employees not only hurts families, it hurts communities. It also makes honest employers less competitive. Businesses that are good citizens and pay their employees what is owed them and on time, as is required by law, should not be at a disadvantage to companies that are illegally withholding wages from their workers.”  [node:read-more:link]

According to Capitol Confidential, a blog by the (Albany, NY) Times Union, the chances for passage of the Wage Theft Prevention Act to the governor’s desk requires prompt action if the Senate and the Assembly are to reach resolution before a possible GOP takeover of the Senate.

Based on the current situation, the New York Assembly and the Senate have three paths to take in order to complete the work on the bill on time.  Blogger Casey Seiler writes:

“Both the Senate and Assembly passed versions of the measure near the end of this year’s session.  Getting it to Governor David Paterson’s desk – where, backers believe, it would be signed – requires the Legislature taking one of three paths.  In declining order of likelihood:  [node:read-more:link]

According to an article in the Albany Times Union last week, the returning New York legislature is close to passing a state-wide law against wage theft.  If they pass it and the governor signs it, New York could start 2011 with a strong Wage Theft law similar to the other 25 states who have already passed their laws.

We reported earlier this fall that New York State passed the Construction Industry Fair Play Act, which deals with the problem of worker misclassification.  Now both state houses have passed drafts of this new Wage Theft Prevention Act and all that is left is for the Assembly to agree to and pass the Senate version and then for the governor to sign it.  [node:read-more:link]