Monday, May 2, 2011

Union leaders' tough choices

Must choose between competing with nonunion labor or maintaining wage levels for a shrinking number of workers.
I was being given a tour of a renovated midtown office building the other day when a group of construction workers piled into the elevator. “The roofing crew must have just quit for the day,” said the owner. “So you use nonunion labor,” I said—an obvious conclusion, since none of the workers were speaking English.
“I just don't understand the construction unions,” the owner replied. “The cost differential is so great, unless something changes, the unions will be left with only a few sectors of the industry.”
New York state appears to be a labor stronghold, with one in every four workers belonging to a union. The figure is misleading, however. The state ranks so high because an astounding 71% of public-sector workers are unionized. Private-sector unions are in crisis, and union leaders appear to be having great difficulty figuring out what to do about it.
Construction unions know that unless they reduce the cost differential between union and nonunion labor, the percentage of projects being built nonunion will continue to rise. Yet it has been reported that Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, an umbrella labor group, won't even sit in the same room with Lou Coletti, who represents the contractors. It seems absurd to allow such passions to get in the way. The builders can always go nonunion. What will the union members do if there are no jobs for them?

Hotel union chief Peter Ward seems to be obsessed with restaurateur Dean Poll, who refused to meet the union's demands for a contract at Tavern on the Green. He's focused on making Mr. Poll's life as miserable as possible by trying to organize his Boathouse restaurant in Central Park. Meanwhile, limited-service hotels, most of them nonunion, are opening throughout the city, undermining the union's position in the marketplace. What does the Boathouse tell those hotel owners about doing business with the union?
The retail workers union is engaged in the equivalent of Custer's last stand in its effort to keep New York City Walmart-free. So far, there are no signs that the effort has created momentum for legislation to bar the company from the city, or intimidated landlords into refusing to lease space to the nation's largest retailer. In fact, the louder the union shouts, the more landlords enlist in the Walmart camp, sure that a union success will make New York more inhospitable to potential tenants. What do the union leaders think they will be left with if Walmart opens stores in the city?
The first of the questions will be answered in the next two months, when the construction contracts are decided. Union leaders will be choosing between defending their place in the city by competing with nonunion labor, or maintaining wage and benefits levels for an ever-shrinking number of workers.

by Greg David / Crain's New York Business
May 2, 2011