Berkeley in landmark “keep it local” deal with unions

Renovations to the North Berkeley Library may be one of the first projects to be considered with the new "keep it local" trade union agreement.

The Berkeley City Council unanimously voted Tuesday night to enter into a landmark agreement with a number of trade unions that would give Berkeley and Green Corridor workers top priority for most contracted city projects.

The move has garnered the support of many local union workers who see the agreement as a way to help provide local prevailing wage jobs, but it is seen by some as a distortion of the free market, where competition over projects will be less fair and more expensive.

The decision by the council to enter into what is known as a Community Workforce Agreement makes Berkeley the first city in Northern California, and the second in the state, to approve a comprehensive, citywide local labor ordinance. Both San Francisco and Oakland have similar, but less comprehensive, agreements.

Under the three-year agreement, signed by the city, the Alameda Building Trades Council and 22 other trade organizations, projects contracted out by the city worth more than $1 million must have 30% of total labor hours prioritized to Berkeley workers first — union or non-union. If Berkeley workers cannot fill the requirement, workers located within the East Bay Green Corridor gain priority; the Green Corridor was established in 2007 and takes in UC Berkeley, Lawrence Berkeley National Laboratory, and the cities of Berkeley, Oakland, Richmond, Emeryville, Alameda, Albany, El Cerrito and San Leandro. Finally, if no workers can be found at either of those levels, a search throughout all of Alameda County comes next before a contractor can bring in out-of-county help.

The new agreement will not only create jobs in the short term, said Alameda Building Trades Council Secretary-Treasurer Andreas Cluver, but will provide the means for residents to develop long-term careers.

“We can guarantee labor harmony on these projects,” Cluver said, “which I think is very important.”

That harmony comes in the form of several provisions within the agreement that bar workers from engaging in any job actions if there is a grievance with the contractor, including picketing, slowdowns, and striking.

Instead, any conflicts between workers and contractors would be resolved through a mediation process where the city would act as arbiter. And under the agreement, the only legitimate cause for action by the union would be if contractors stop making payments into union trust funds.

At the council meeting Tuesday, the room was filled with union laborers and supporters, many of whom shared their personal tales as a union member.

Dennis Caputo, a 28-year journeyman, said he was able to afford a home in Berkeley thanks to the wage he was able to get through his union. He supported the agreement, mainly because of the growing difficulty of finding work due to siminar agreements in surrounding communities. “It’s getting harder and harder for us to find work,” Caputo said.

Long-time Berkeley resident Judith Gatewood, a 30-year union carpenter, said that the new agreement will add prosperity to the community. “It’s a rough place,” Gatewood said. “Most non-union jobs do not have benefits.”

Mayor Tom Bates said the agreement will be a “living document” while all the kinks are fixed over the years. For example, after the first year, the city will review the agreement to determine the impact to local Berkeley contractors, if there has been an increase in project costs, and whether it would be feasible to drop the project threshold from $1 million to $250,000.

As for enforcement, the city will levy a $0.10 per hour per worker fee on contractors that will go into an account to pay the costs to maintain the program.

Although no one spoke out against the agreement at Tuesday’s meeting, the city received a number of letters in opposition, including from Eric Christen, Executive Director for the Coalition for Fair Employment in Construction, who asked the council in a letter why it was about to discriminate against non-union workers. He accused the council of playing into the interests of the big labor unions and chastised the “enlightened progressives” on the council.

“Do you believe it’s OK to force workers who are union-free to pay benefit monies into union benefit trusts that they will never benefit from?” Christen wrote.

Interested in issues surrounding doing business in Berkeley? Be sure to attend Berkeleyside’s first Local Business Forum on Monday January 24, 7-9pm at the Freight & Salvage. Doors open at 6.30 and it’s free.

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  • Name Withheld

    An anti-competitive labor ordinance that prohibits workers from exercising their rights to picket and strike?

    How on earth did this seem like a good idea to anyone?

  • Andrew

    How on earth is this fair? What happens when the small pool of available Berkeley workers decides to fix their rates knowing the city has no choice? I understand the city can hire outside workers if Berkeley workers “cannot fill the requirement”, but does that set any price limit on what they will be paid? What about the workers outside of Berkeley who are getting screwed out of work, even if they’re willing to do it for a better price? I’m not advocating taking advantage of dire times to pay below a livable wage – but why pay more than a livable wage? If you want a high paying job, work hard, get an education and earn it – don’t pressure others to legislate your paycheck.

  • DC

    This makes it hard for local GCs to get the most competitive subs. Not just on price, but quality too. Many specialty retailers have preferred installers, GCs they work with because these vendors understand their needs and deliver best quality through repeated installations. I think this is a terrible ordinance and will just lead to higher prices for construction, and makes sourcing the best subs at the best cost very difficult.

  • Bruce Love

    I wasn’t sure what a Community Workforce Agreement is so I looked it up on Wikipedia. It doesn’t look as ridiculous as some of the comments make it out to be.

    http://en.wikipedia.org/wiki/Project_Labor_Agreement

    I guess that if you are against collective bargaining in general, then you would have to think this kind of agreement is unfair and anti-capitalist. I don’t see how you could reach that conclusion though. It seems to mostly just level the playing field between employers and labor.

    @GC makes it sound like the bestest workers can’t be hired under this arrangement but when @GC says: “This makes it hard for local GCs to get the most competitive subs. Not just on price, but quality too. Many specialty retailers have preferred installers, GCs they work with because these vendors understand their needs and deliver best quality through repeated installations.” what that really sounds like to me is that @GC wants an unlawful collusion wherein some scab labor helps the GC collect a windfall on one contract that underpays labor and ignores local markets in exchange for the GC throwing the scab some windfall on some other contract where the customer is for whatever reason going to over-pay for labor. The unions here are trying to make a fair game and what @GC is describing sounds like unfair collusion when you look at the big picture.

  • DC

    @Bruce Love: I presume you meant me, not “GC.”

    No, that is not in fact what I meant. I am not anti-union at all. I’ve worked successfully with union and non-union trades all over the country and I respect unions. This is such a micro-deal though that it doesn’t allow the best selection of subs. Not every sub is equal to every other, and local doesn’t always mean the best. For non-public projects, as part of negotiations, an owner can select subs on preference based on previous experience or appropriate qualification, and can tell the GC which ones they think are best for that project. I guess the rules are different for public projects, but it seems to me a shame.

  • Name Withheld

    I agree completely with DC and Andrew. I have no problem at all with Unions or community bargaining at all. Unions are incredibly important and many of the privileges we non-Union workers enjoy are a result of the hard work of Unions. I like the idea of hiring local, too. But by making a decision to always pick Berkeley workers first regardless of price seems almost like they’re begging for price fixing problems.

  • Albert Sukoff

    Berkeley has less than 2% of the Bay Area’s population. Envision a norm where every jurisdiction had preferential hiring favoring their local workers and/or businesses. Keeps the money at home, right? What is really does in make for a series of mini-markets for labor and services using labor. Limited to the tiny local economy, Berkeley workers and businesses would be screwed. What a dumb idea!

  • Name Withheld

    @ Albert — Seems like the easy solution is to vote the bums out of office. Since the City Council voted for this unanimously, the quickest solution is to simply vote out all incumbents at the next election. I’m waiting on the results of one or two more votes, but I’ll probably be actively assisting any campaig against my currently sitting City Council member next time around.

  • Camille

    This mandated agreement of 30% local workers for labor contracts within a “green corridor” sound very much like the requirements contained within Past Presidents G.H.W. Bush and Bill clinton on Sustainable Development.
    The political goal is for all communities to be surrounded by green corridors, encasing the citizens in locally sustainable developments, each community or region required to sustain itself or go without.

  • Bruce Love

    Similar deals are made all over the Bay Area. This isn’t Berkeley workers against SF workers, it’s the unions for the whole region and they are doing what unions do – allocate work.

    Strange that people complain about unions keeping wages higher. Few readers would have anywhere near their current standard of living if unions didn’t work on keeping wages higher. Look at history and other parts of the world.

    @DC (sorry for getting your nickname wrong before): Ok, so, you can’t always higher the subcontractor you want. You say the other one is “best”. You want to import workers and pass over local ones because those other guys are “best” so I guess you say the local subcontractors are no good in comparison?

    I don’t think unions are flawless. They do a lot of good, though. The complaints here sound like old-school industrialist propaganda. I come from a town – one of the most livable in the U.S.. according to the Economist – that has monuments to union victories in battles where workers lost their lives. And I know a lot of people just react against union stuff automatically talking about free markets and such. Well, unions are a free market. They are organizations that broker labor. They do a lot of good for their members and our nation, in spite of the screw-ups of some unions.

  • Albert Sukoff

    Unions don’t allocate labor; markets do. Unions intercede in the marketplace to modify the results of that allocation process based on some criteria other than the supply of and demand for labor. This can be fair and just depending on the situation. It is one thing when you are talking about coal miners refusing to work 80 hours a week in a dangerous mine for a dollar a day. Workers making a handsome wage and wanting more in the way of pay, benefits and retirement is quite another. A business doing well could be expected to share the bounty with its workers but it is foolhardy to make commitments fifty years out, as Detroit did with the UAW. With that time horizon, the deal is certain to turn around and bite you on the ass. (The prudent way to share the wealth would be contemporaniously.) When the deal goes south, everyone suffers but at least everyone — management, shareholders and workers — was in on the deal.

    It is unconscionable for politicians to make such commitments and then not fund them when the ultimate responsibility for payment falls on the taxpayer, or more accurately, their grandchildren. The public employees’ unions support amenable politicians — politically and particularly financially – who in turn support the unions with bigger and better contracts. And all this is made worse because the bill for the benefits awarded doesn’t come due under the politicians watch (and he/she doesn’t give a damn). Notice in this scheme, the bill is paid by third parties and it is paid so far down the road that they don’t pay attention. It reminds me of the old joke about Brazil — It is the country of the future and always will be. Likewise, employee retirement benefits were considered the problem of the future which will always be such. Well, Brazil may actually make it this time and the public employee unions and their political allies may have finally busted the country at every level of government. This can be largely attributable to absence of the bottom-line constraints with which every profit-seeking enterprise must deal. So much for the union-facilitated allocation of labor.

  • Name Withheld

    @Bruce Love

    I like Unions as much as the next moderate, but Unions have nothing to do with my current wages. Not only has my industry never been Unionized, but my pay scale has more to do with my many years of education than with a bunch of blue collar guys working for City Hall who demand ridiculous pensions that are totally out of step with anything that’s ever been offered in the private sector and that are creating a massive drain on our State finances.

    This legislation didn’t address some sort of problem that we were having in Berkeley with labor fairness, it’s just another example of elected officials pandering to local Union groups in exchange for votes.

  • Andy

    This is how politicians get re-elected, taxpayers get fleeced, and city governments go bankrupt.

  • Bruce Love

    Ha! It’s obvious we’re won’t solve all arguments about the theory and practice of collective bargaining in comments! It’s interesting to hear all the points of view, though.

    @albert says “Unions don’t allocate labor; markets do. Unions intercede in the marketplace to modify the results of that allocation process based on some criteria other than the supply of and demand for labor.”

    Unions are just a way for groups of people to negotiate as a group. If my friend and I hire you to negotiate both of our contracts, how is that not free market supply and demand? If a lot of us all negotiate as a group and even threaten to strike, how is that not a free market? You say that some union deals are good and others are bad. True! It’s still all free market. Unions allocate labor because the labor pool hires the union to do that. Trade union halls do that. At Cal, same idea, unions participate in the hiring and promotion process. It’s all free market. It’s just that organized workers are less easily abused by management that is more powerful than any one worker.

    The question in this issue isn’t about unions vs. free markets – its about whether the City made a bad deal. The last Bush administration started promoting deals like this one. The Obama administration promotes deals like this one. Council and the mayor like it. The unions like it. Similar deals are happening all around the bay.

    There are two “odd ones out” who seem to hate the deal. There are those who make sweeping arguments against unions in general. And there are organizations of general contractors who object.

    We won’t settle it here but general contractors have a pretty obvious conflict of interest. That doesn’t mean they’re automatically wrong. It does mean they need more than automatic tired and false anti-union arguments. The arguments against unions in general (except where unions make only meek and unimportant demands, of course) seems pretty anti-capitalist to me. The more you argue that free market workers shouldn’t freely organize their bargaining because they might get too much power, the more it sounds like they oughta. (yeah, sure, lots of non-union people have complaints about being forced to pay union dues or denied a promotion in a union-rules shop. most of those complaints don’t stand much scrutiny. my favorite was the gal who told she voted “no” on a card check because management promised better health insurance than the union plan. just gotta laugh at something like that and think where’d she get health insurance benefits in the first place!)

    Prairie Home Companion had a good one on the joke show: “How many New Yorkers does it take to change a lightbulb? Fitty! Read it! It’s in the contract!”

  • DC

    Just for the record – I am not a GC. I am a Project Manager who manages and represents the interests of the owner in the construction process. I see benefit in being able to qualify the best subs regardless of provenance.

  • Name Withheld

    @Bruce Love – Just because the Obama & Bush administrations both promote something doesn’t make it good. We have two pointless wars & a prison in Guantanamo Bay that prove that.

    I am generally pro-Union and a white-collar worker who has nothing to do with the construction industry, and I object to deals like this for the same reason I object to the outrageous pensions that state workers are getting these days – it isn’t fair, and it isn’t a fiscally responsible use of taxpayer dollars.

  • Bruce Love

    @Name Withheld: You haven’t given any evidence (and the article doesn’t either) that this is going to cost Berkeley any money. The article suggests that the deal will save Berkeley money on the projects AND help economic growth in Berkeley.

    This kind of deal doesn’t force Berkeley to pay more than prevailing wages and benefits. This kind of deal does spare Berkeley some friction with region-wide unions.

    I get the complaints, maybe. Contracting is an industry based on relations. Groups of contractors and subcontractors get used to working with one another. They can trust one another. They know “those guys are good for this; those other guys good for that”. They can cut favors to one another like I’ll give you a break on this job but you better give me a really sweet job next year. They know whose got great skills. They know who can do simple stuff reliably. And that’s all great!

    And deals like this do mess that up. I don’t want to put words in @DC’s mouth but I think that’s what she or he is saying, partly. “Hey, let the good guys work out good deals!”

    Problem is that that all that relationship-based stuff is easily corrupt and easily screws up an entire region. Those are political machine’s, man. Maybe they don’t mean to be but they are. It’s not fair to workers who aren’t in the clique. It’s bad for the health of the labor pool in a region. And when the bosses in those cliques get squeezed, they too often turn around and more than take it out on labor. It’s easy to forget this in boom times and hard to ignore it in economies like we’ve got. We don’t need more feudalism and deals like this help to push feudalism away.

    I’ve met and been friends with a decent number of subcontractors around here and back home over the years. Just about every one of them is grateful for the union. I’ve seen at risk kids rescued, families housed, charity extended, good work done, and projects fairly and well completed on reasonable budgets. And all through that there’s people yammering about how bad unions are in this vague theory or that or how the unions killed detroit with no real idea about how badly management was the real problem there.

    Deals like this aren’t unfair to taxpayers. It’s a good bet they save taxpayers money and grow the local economy. If you want to know where the taxpayers are getting screwed don’t look at the union deal, look at the kind of development The Powers That Be have in mind for the Green Corridor. How’s that Bayer deal working out? Is the city making lots of money off that BP deal? How is Berkeley doing at local job creation with its light industrial zone (measured against city domestic product, tax base, and so on)?

    The unions are not the problem here.

  • Albert Sukoff

    Bruce writes:
    Unions are just a way for groups of people to negotiate as a group. If my friend and I hire you to negotiate both of our contracts, how is that not free market supply and demand? If a lot of us all negotiate as a group and even threaten to strike, how is that not a free market?

    If two grocery clerks want their working conditions negotiated by a third party, that could still be considered a free labor market. However, if ALL the grocery clerks dictate certain conditions unacceptable to management, the business must capitulate or fold. That’s not a free market because the businessperson if not free to hire a non-union member who would be delighted for work for $18/hour because the union has the power to demand $24/hour as the minimum wage. You may see this as a good thing or a bad thing, but it NOT a free labor market.

  • Brian Jacob

    I like how the wikipedia link was used but then just a few results lower we find, http://www.thetruthaboutplas.com/

    And I also am not too sure about the Bush administration promoting PLAs…. http://blog.aflcio.org/2009/02/06/obama-overturns-bush-exec-order-on-project-labor-agreements/

    Union or non. Whatever. I think that both are fine. The market should be open. PLAs and such ordinances should not be allowed.

  • Brian Jacob

    @DC

    I really Like the points you bring also.

  • Mike Flynn

    The State sets the wages thru the Dept of Industrial Relations for all Public Works projects, wages will not change until the date set with the Dept. I have benefits for my employees but do not want to belong to a Union. How can I pay my benefits, pay into the Union trust , meet the wages set by the State and compete? This is discriminating against the Open Shop contractor. I have myself and 2 employees and if I land a job in Berkeley that requires all 3 of us I am going to have to tell 1 of my employees that he cannot work because I need to hire local. I can understand any new hire should fall under this rule.