Jim Kollaer's blog

According to the BLS (Bureau of Labor Standards) the March job numbers showed a positive growth of 162,000 jobs.  There is “joy in Mudville,” to coin an old baseball term, if those numbers hold true as it just might be the first positive indicator of the economy since we dropped from the peak of the last cycle in December of 2007.

There are those who believe that the recent numbers, while positive, are not conclusive. The National Bureau of Economic Research (NBER) Business Cycle Dating Committee (no, it is not an online dating service) met recently to determine whether the economy was at its lowest point and they concluded that while some of the indicators have turned positive, not enough have shown positive results to determine whether or when the bottom of the trough has occurred.  There is no question in the minds of most [node:read-more:link]

April 13 was the first day that the new Obama styled contracting guidelines requiring that all Federal projects with budgets of over $25 million have negotiated Project Labor Agreements or PLAs. The guidelines further suggest that those agreements can only be negotiated with Union contractors and subcontractors according to Fox News . The Presidential Executive Order was quietly signed a few days after Obama took office last year. According to the news article, “Those agreements require contractors to negotiate with union officials, recognize union wages and benefits and generally abide by collective-bargaining agreements” effectively shutting all “Merit Shop” or “Open Shop” contractors and subs out of this work.

Opponents to the policy including the Associated Builders & Contractors and the Associated General Contractors have claimed that this policy will add as much as 20% to the cost of those projects; stifle competition and block out the 85% of contractors and subs who are not unionized but who might wish to compete for Federal contracts.

According to the article, “Proponents of the new policies (actually the reinstatement of Clinton era policies under an Obama banner) such as Mark Ayers, president of the AFL-CIO Building and Construction Trades Department praised the policy.

Most of us in the construction industry will agree that the industry has an image problem, that being “the industry is not the most attractive alternative for job seekers when compared to other jobs.”

There is another “image” out there that we need to pay attention to now. The Immigration and Customs Enforcement  Agency (more commonly known as ICE) has a program called by the acronym IMAGE.  That stands for ICE Mutual Agreement between Government and Employers or IMAGE, just one of the many programs that ICE has instituted in its efforts to control the employment of undocumented workers in the workforce.

ICE also applies to the illegal workers who are using falsified documents to go to work in the construction Industry.

According to the latest statistics listed on the  USCIS  website E Verify is currently used by over 192,000 employers on more than 705,000 jobsites across the US.  

In the last 5 months they have received over 6 million requests, that is 1.2 million per month. According to a study recently completed by Westat Inc. and quoted in the April 2010 issue of HR Magazine, 94% of the workers submitted were [node:read-more:link]

There is a bill, LB 563, moving through the Nebraska Legislature that creates penalties for “Employers” who misclassify workers as “Independent Contractors” in order to avoid paying employment and income taxes. The bill applies to all employers, but specifically to contractors and some delivery services.

The Governor was lobbying to have the delivery services removed from the bill, but the Senators voted against that move. The bill is the result of the difficulty that contractors who are meeting the measure of the law and paying benefits and taxes for their workers made the case that they were at a major disadvantage in bidding on projects in this economy.

In a recent article in the Omaha World Herald, the Senator who introduced the bill said [node:read-more:link]

According to statistics from the Houston Independent School District in Texas, the third largest school district in the country,  for every 100 students entering grade school this year, only 25 will complete high school and consider college.

The other 75% of those students will "drop out" due to bad academics, family problems or pressure from the family to [node:read-more:link]

One key part of the health care bill passed by the House and signed into law this week by President Obama is that everyone in the US must have health care or be taxed by the Government.  On it’s face it appears that the playing field in the construction industry has  just been graded if not totally leveled.  Both legal citizens and illegal citizens must be offered healthcare by their “employers” under the new law.

The impact on the construction industry of the newly passed healthcare law is significant and almost immediate. According to SHRM, the Society for Human Resource Management,

"Large employers" —those with 50 or more employees—that don’t offer insurance will have to pay an annual tax of $2,000 per full-time worker. [node:read-more:link]

...we couldn't find the skilled workforce to do it if we were to win the bid! 

This might sound ludicrous today in the middle of the recession, but in the not too distant future it might become a reality if the Construction User’s Rountable (CURT) is right.

According to a study currently underway for the Industry at the Construction Workforce Development Center,

It has always been there. You perform some work for me and I will pay you in cash. That way I don’t have to file taxes, you don’t have to pay taxes and we can go on our merry way. Many construction day laborers, housekeepers, landscapers, movers, waiters, bartenders, painters, fixer uppers and dishwashers get paid that way.

It will probably always be there in some form or another whether direct pay or barter.  In today’s construction industry there is a tension building around the cash economy where contractors are being forced to low bid work in order to keep their teams together and to do so means in some cases that they have to go to subs who

in turn go to labor brokers who then go to the street for day laborers in order to meet the demand for workers on the jobsite.

When they make that move they are directly contributing to the cash economy may be creating safety problems on many jobsites in a time where safety and the quality of construction is a critical issue for the industry.

The results of this approach, one that is becoming more prevalent during tough economic times, is that taxes are not getting paid, no medical benefits are being paid, social services are being overburdened, no retirement is being set aside, [node:read-more:link]