Prevailing Wage, NLRB, and the Skilled Trades Shortage

 

Musing time here at The Wealthy Ironworker

 

Prevailing Wage adjustments, NLRB changes, and a skilled trades shortage (or, if you prefer, a tight labor market) – a recipe for greater cooperation for all involved.

The Infrastructure Investment and Jobs Act has 1.3 Trillion earmarked and with so many experienced people retiring, some project that 85 million jobs – or a staggering 8.5 trillion dollars worth – could go unfilled.

Census.gov talks about a 2.1 million job projection shortage in Manufacturing ALONE.

This paints a rather dire picture of the labor market – and this platform knows the construction industry needs a wake-up call and some fresh ideas.

 

Changes in Prevailing Wage for Contractors

These new changes in the rules are welcome for those who do things right

 

What’s more, Construction Dive – sponsoring an article from Merchants Bonding Company – has an interesting article that discusses the recent changes to the Davis-Bacon and Related Acts Regulations. The verification process has been stiffened, contract officers are able to enforce prevailing wage standards, and consequences for non-compliance will make false claims easier to levy.

While not as comprehensive as some like, it IS a step in the right direction. According to Construction Dive, which references a study by the Century Foundation, some 2.1 million workers are misclassified.

Misclassification is rampant in the industry, and while the infrastructure money can’t address them all, it can do something about those contractors who will be receiving federal dollars – which IS a step in the right direction, however small it may be.

 

Changes in Organizing With the NLRB

These changes have been a long time coming

 

Last year (2023) also saw a change in the way unfair labor practices during a union election drive are perceived. JD Supra highlights “Cemex Constr. Materials Pac., LLC, 372 NLRB No. 130 (Aug. 25, 2023), which implemented two changes for union organization and the employer’s obligation to bargain with a union about the terms and conditions of employment.”

In the past, once employees signaled their desire to be represented by a union (typically by representation cards), the union would petition the contractor/employer to bargain in good faith. If that didn’t work (the employer didn’t recognize the employee’s representation), the union would then file a petition.

The changes do not permit a contractor/employee to simply ignore the petition, and – even more importantly – IF the contractor/employer is found to have committed one unfair labor practice. This is HUGE, because companies/employers have spent enormous amounts of money, paid anti-labor consultants, and in general, committed numerous unfair labor practices during a unionizing campaign – coupling this with stalling, and you have a table heavily tilted toward management.

The Cemex case, however, is tilting the table a bit back to fairness – and it’s been a long time coming.

 

What Both of the Changes Mean

What will the results be?

 

The skilled labor shortage – projected to increase significantly over the next 10 years as the latter half of baby boomers retire – will create a crunch like we haven’t felt in decades. Indeed, the construction industry is ill-equipped for all the changes coming its way, some of which aren’t even acknowledged.

However, with the above in mind and coupled with the two changes discussed – prevailing wage and organizing efforts – contractors who do not treat their employees well will be fighting for their survival. And I believe that quite literally.

Given the prevailing wage and NLRB changes  – and their broad effects, the time is ripe to reevaluate your business model, acknowledge where you are deficient, and begin to plan structural changes in your organization. Because of the stigma the industry faces, the increased competition from other fields (Internet, YouTube, etc.), and a general lack of situational awareness many possess, The Wealthy Ironworker advocates for contractors to partner up with a local union – especially if you are in the building trades (ironworkers, pipefitters, electricians, etc.).

I’M WILLING TO BET YOU DON’T KNOW ALL THE BENEFITS YOU GET BY BEING A UNION CONTRACTOR. Yes, you read that right: there are numerous benefits you get by signing a collective bargaining agreement with a union. Interested contractors can read 10 Benefits of Being a Union Contractor for more information.

And if you are unsure who to reach out to, I can help with that, too. Feel free to contact me and drop me a line. I can get you connected wherever you need to be.