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Unemployment: The Scourge of Our Industry!
The second week in November the U.S. Department of Labor released the most disturbing unemployment statistics for Americans since the Reagan Recession of 1982. The DOL announced an unemployment rate of 10.2% and an underemployment rate of 17.5%!
Unemployment is defined as the number of workers actively seeking employment and unable to find work. Underemployment includes the unemployed plus part-time workers and those who have given up finding work and are no longer eligible for unemployment benefits.
Congress and President Obama have extended unemployment benefits an additional 14 weeks, states such as New York, where unemployment is over 8%, benefits are extended up to 20 weeks. Unfortunately this extension was delayed due to Republicans in Congress holding up passage for no apparent reason. Thousands of Americans needlessly lost their unemployment benefits during this delay and therefore were not eligible for the additional weeks.
Unemployment in the electrical construction industry is severe. Currently over 2,800 construction electricians are unemployed, some waiting over 39 weeks for employment. Local 3 Business Manager Christopher Erikson in recent remarks to members stated, “We must not let unemployment divide this membership.” Erikson reminded those who heard him speak that, “Members, up until recently, have not lost medical coverage for themselves or their families because our Welfare Plan allows coverage for up to 26 weeks when unemployed and the Trustees have extended coverage an additional 13 weeks to a total of 39 weeks before benefits are suspended. In addition the local union Pension Plan permits members to accumulate an additional pension credit. Both Plans have such policies providing the member is ready and available for work.”
Prior to the economic downturn of September 2008, the electrical industry was near full employment, a first since the terrorists attacks of September 2001 after which, economically, the industry never fully recovered.
In August of 2008 the Employment Department of the Joint Industry Board reported that approximately 350 members were unemployed. Within eight weeks of the “economic crisis” the number had risen to nearly 2,000. The effect of the credit crunch within the banking industry has resulted in many jobs being stopped and more that were anticipated to start—were abandoned. The trend has continued and although economists claim the economy is presently on the rebound, the effects of the rebound is only in the price of stocks, unemployment is at a 25 year high.
Over the last quarter century many advances in the method of electrical construction has resulted in less demand for labor. Jobs and installations that were formally multi-faceted in their installation have been made simpler.
One example of such an effect is the installation of fire alarm systems. Twenty-five years ago the installation of such systems required all wiring to be encased in galvanized electrical conduit. To do such installations racks had to be built to support the conduits, the conduits had to be bent, cut, threaded and installed. Upon completion of the piping, wires had to be pulled, devices installed and wired and the system tested. Today conduit is no longer required and with the use of Teflon fire alarm wire, the job can be installed in many cases in one quarter of the time it used to take. Similar changes in the use of time-saving materials has affected nearly every type of electrical installation and results in fewer man-hours needed to perform the work.
Some would argue that if less man-hours were needed then we need fewer members in the union. This is a simple statement that sounds on its face reasonable. Unfortunately it is not. Strictly from an economic and competitive perspective apprentices are needed. They are needed to bring down the cost of installations. By creating a “composite” rate, contractors signatory to Local 3 are competitive against their non-signatory competition that pay whatever they choose to their employees when performing private work. Therefore, in order to not out-price ourselves from the market we must initiate apprentices into the Union at a rate agreed to through collective bargaining. Every apprentice becomes a journeyman. Since 1992 over 5,800 apprentices have become journeymen.
Some would say, ok and then if we must have apprentices, let’s not organize as aggressively as we have in the past. This doesn’t work either. Organized electricians generally enter the Union as secondary rate men. If they enter as 1st year “M” helpers they work eleven years before they receive the “A” rate of wages. If they come in as “M” journeymen they work four years at the “M” rate prior to receiving the “A” rate. These members are in many cases a front line of defense against the non-union electrical contractor. They perform work in the secondary rate sector and by doing so deny opportunities for non-union electrical contractors to gain experience and success. In the case where they were performing prevailing rate work on behalf of their non-union employer, they were making a success of that employer who was competing with employers signatory to Local 3 who perform “A” rated work.
From 1990 through 2007 a total of 2,640 non-union electricians have been initiated into the Union – approximately 155 per year. Not an extraordinary amount. So it is important for the membership to understand that the unemployment they are experiencing is not due to any one reason.
Primarily it is due to the economy. Changing work methods and to some degree apprenticeship, organizing and the loss of certain work opportunities within the low-voltage installation segment of the industry also contributed to unemployment. However, if members reflect on the fact that in August 2008 the industry was 350 members short of full-employment — it seems as though the greatest cause of unemployment is not the number of members but the economy. The other issues regarding the number of members become convenient to state because it seems to be an area where perhaps we could have some control over our circumstances when in reality it is of less importance then the real cause of the present state of affairs.
In addition to the benefit protections provided to Local 3 members discussed above, the “Work-Sharing Plan of the Electrical Industry” attempts to insure that every member has an opportunity to share in the available work. Although not perfect, the Plan does provide a limited amount of rotation of the unemployed list; assists in ensuring members are eligible for unemployment benefits; that members retain medical benefit coverage for themselves and their families for 39 weeks and that every member experiences some level of unemployment throughout the year when unemployment is being experienced in the industry. In addition, it attempts to share the economic burden among all segments of the industry.
Besides the membership, the employers experience additional costs to doing business due to increased unemployment insurance premiums caused by the mandated furloughs in the Employment Plan.
“Local 3 is unique throughout the IBEW and indeed the construction industry because it has the Work Sharing Plan. In many jurisdictions of the IBEW members are unemployed for literally years in some cases because no such plan exists,” stated Business Manager Erikson. “Hopefully, through the leadership of President Obama and his economic policies, the economic turn-around will prove to be one that creates jobs and brings a new generation of prosperity for members of Local 3 and all Americans.
More importantly though, we must work hard as a membership not to permit the unemployment being experienced now to act as a wedge within our membership. We must remain strong, united and committed to assist one another in these difficult times of need.”