How to Find Valuable Sources on the Construction Beat

This is a story published on Coveringbusiness.com referring to my experience mining the beat as a journalism student.

How to Find Valuable Sources on the Construction Beat

By Joshua Peguero
Columbia Journalism School C’12

Covering a construction project in New York City is deceptively difficult. Although there are plenty of people with strong opinions about the new Wal-Mart, Whole Foods or Trump Tower, the voices you want are rarely the ones willing to go on the record.

You can hardly blame them. For developers and investors, there’s a lot at stake. They have a lot riding on public opinion of their project. Laborers are typically tight-lipped out of fear of being fired or crossing their unions.

Yet getting people to open up is a critical skill for any journalist, and like most skills, this one can be learned. It starts with talking to the right people and getting them at the right time.

Here are few sources to reach out to when covering a construction project in a big city like New York.

Get Inside the Hardhat

Construction workers can add color and help humanize a piece. They also know first-hand the hazards involved in their project, such as faulty equipment or safety shortcuts. Construction workers are often reluctant be interviewed on site because of union regulations. Find a place they’re willing to talk. Hang out where they go for lunch or dinner. Because union rules forbid many workers from speaking to media, expect to conduct early interviews anonymously or on background.

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Mitt Romney’s Box of Kryptonite

Here’s a great labor related story written by Bloomberg Businessweek’s Assistant Managing Editor, Paul M. Barrett. It’s on a bed investment Bain Capital made, and the hardships it caused a collective of factory workers. Randy Johnson, a factory worker in Marion, Indiana lost his job after Bain Co., under Romney’s leadership, purchased American Pad & Paper in 1992. The company filed Chapter 11 bankruptcy two years later.

For the Romney campaign, Johnson’s story provides a political throne to his presidential run. Johnson fist appeared in the political arena during the CEO’s initial campaign to contest Senator Edward Kennedy’s Massachusetts seat. Romney operated Bain Co. as a Leverage Buy Out (LBO) firm; what’s now considered a Private Equity Firm. After purchasing the company, he loaded Ampad with 2150 percent more debt in one year. It was done to prepare it for an Initial Public Offering (IPO).

The article adds more questions to Romney’s claim as a job creator. Below is a quote that succinctly summarizes the LBO business:

Marc Wolpow, a former Romney colleague at Bain, defends the buyout business as promoting American competitiveness. The main goal at buyout firms, however, is never maximizing employment, he says. It’s maximizing returns for investors.

Not all of his time at Bain Co. was negative. He invested the seed money to get Staples, a low-cost office supply company, off the ground. The company now employs over 50,000 workers.

To read the article click here

Pomona College Labor Issue With Undocumented Workers

Through my daily Tumblr search, I learned of a labor dispute brewing at Pomona College. According to a New York Times article, seventeen undocumented dining hall workers were let go after failing to provide authorization papers. Education reporter Jennifer Medina, wrote on the issue in a February 1st article. Here’s the lede and nut graf:

 The dining hall workers had been at Pomona College for years, some even decades. For a few, it was the only job they had held since moving to the United States.

Then late last year, administrators at the college delivered letters to dozens of the longtime employees asking them to show proof of legal residency, saying that an internal review had turned up problems in their files.

Further down, it states dining hall workers were prohibited to organize. California is not a right-to-work (RTW) state forcing employees to participate in unions.

For the last two years, many of the dining hall workers had been organizing to form a union, but the efforts stalled amid negotiations with the administration. Many on campus believe that the administration began looking into the employees’ work authorizations as a way to thwart the union effort, an accusation the college president, David W. Oxtoby, has repeatedly denied. But that has done little to quell questions and anger among the fired workers and many who support their efforts to unionize.

The Contra Costa Times wrote earlier this week that Pomona College agreed to settle with the National Labor Review Board. The complaint sent to NLRB characterizes the school as a hostile working environment for dining hall workers (Here’s the complaint). One of the complaint says workers were told not to speak to students, and the other says an employee was not promoted due to a union button he wore around the school. 

The labor conflict at Pomona College is representative of a national political dialogue over immigration. It’s a fervent issue as both Democrats and Republicans fight to get the Hispanic vote. Both parties are making strategic strides to secure the vote. Los Angeles Mayor Antonio Villaraigosa will chair this year’s Democratic National Convention, and a straw poll taken at the Conservative Political Action Committee (CPAC) conference showed 34 percent of attendees picking Florida Senator Marco Rubio as Vice President nominee.

 

Indiana Legislatures Dive into Right-to-Work Law

Indiana became the 23rd state last week to pass right-to-work legislation (RTW). The Economist reported on it for the February 4-10 circulation. The article describes Indiana as the first state under the old manufacturing belt to adopt RTW legislation. According to the report, a RTW state is one that..

"allows employers to decide whether to financially support a union. Without such laws unions can insist that all workers pay dues to help fund the cost of negotiating a contract with a contract with an employer, whether or not they wish to formally join the union." 

The article quotes prominent players in the state, one saying RTW laws make it easier to negotiate flexible work rules and creates unions a merit-based system of employment rather than seniority. Also, highlighted is a broad trend in Midwestern states to curb union power with both Ohio and Wisconsin filling that narrative despite not having success.

For a further analysis on the topic, check out the non-profit, nonpartisan think tank, Economic Policy Institute report.

Construction Coalitions Rebuild Image

The recession hit the construction trade hard. Public money dried up, and the costs to build in New York City rose. Developers started to work with fewer people drilling into the pavement, directing the trucks, and operating the cranes.

To find employment opportunities, some nonunion and union construction workers have turned to construction coalitions. These community-based organizations require weekly dues and use several unorthodox and confrontational tactics to get their members hired at work sites; the most common is a van showing up carrying coalition members willing to protest or disrupt work on the project.

But the illegal tactics a few coalitions practice have led federal and state prosecutors to indict them.

James Haughton, the last original city coalition leader, operates the Economic Employment Council out of his Tribeca loft. Started in 1964, this construction coalition began at a time when racism was prevalent in building trade unions, and, he says, the AFL-CIO failed to respond to the interest of inner city minorities.

"The basic trend was to the old adage; black folk were the last hired first fired, and that was true for most of the general contractors," says the silver-haired Mr. Haughton, 81. A spinal cord disease prevents him from leaving his apartment on 135 Duane Street. Inside the caste-iron façade of the building, books stacked ceiling-high allow him to pass the days reading. “We were fighting racism in the construction industry for African American workers, and now it’s reverberated back to the old way. And blacks are being last hired first hired.”

In his spacious apartment, Carla, a Haitian home attendant, is his only companion visiting him daily.

"He old now. He talk to himself because he got no friends," she says washing dishes in the sink. He looks at her, turning down his reading glasses. She rolls her eyes. "But God bless his soul, everyday he reads his books."


After fighting in the Korean War, Mr. Haughton moved to Chicago and joined the Civil Rights movement that took hold of the nation, meeting A. Philip Randolph, Reverend Martin Luther King Jr. and Malcolm X. In the early sixties he moved back to Harlem to start the Negro American Labor Council, eventually changing its name to Harlem Fight Back. He operated it on the second floor of the now-shuttered Mart 125, which closed its doors in the late 90s and is now owned by the Economic Development Corporation.

Mr. Haughton no longer walks around Harlem to “shape jobs,” a tactic when construction coalition members showed up at a job site and tried to get the foreman to hire their members. 

“Historically, the unions did practice discrimination. Generally, construction unions were one of the most discriminatory sectors in the industry,” says Joshua Freeman, a Labor Professor at Queens College. “It’s changed a lot in the years, a lot more minority, black and Hispanic workers. Certainly, it’s different than 40 years ago.” 

Prosecutors have clamped down on the physical intimidation some coalitions use during the “shaping” process. In September, New York State District Attorney Cyrus Vance Jr. charged David Rodriguez, the president of United Hispanics Construction Workers, and his organization with ten counts including one for intentionally running a criminal enterprise. The DA’s office also accuses the coalition of violation thtththe Hobbs Act; prohibiting the interference of interstate commerce through extortion. The charges carry a sentence of 25 years to life, and the case goes to trial in January.

In a press release, the district attorney alleges United Hispanics extorted tens of thousands of dollars from general contractors and in several instances “as many as 30 members stormed a job site in an attempt to intimidate the builder and force him or her into paying for bogus security costs, labor peace, or protection from other labor coalitions.”

In 1993, Mr. Rodriguez was included in a series of indictments by the federal government that targeted 31 coalition members in New York. Individuals from Positive Workforce, Afro Construction and East Harlem Coalition were also those indicted, although all but one were subsequently acquitted.

"They’re responding to the construction industry and looking to put the squeeze on David," says Murray Richman, Mr. Rodriguez’s lawyer who is based in the Bronx and represents other construction coalitions. "[Contractors] say he makes minorities get constructions jobs. They don’t like that, and being told what to do. If white guys do it, they call it a union, if people of color do it they call it a crime.”

Mr. Rodriguez operates United Hispanic Construction Workers (UHCW) out of a ground floor building in the Morrisania neighborhood of the Bronx. His office has a gym, kitchen, and lounge. Sitting at his desk, David Rodriguez, 55, denies the charges brought up against him, his chief lieutenant Darryl Jennings and UHCW.  “How am I going to be found guilty of a crime I didn’t commit? It took them eleven months before they came up with these trumped up charges. Just because we protest discrimination at these job sites they’re trying to break us up.”

Undeterred, Mr. Rodriguez was preparing two vans to bring thirty protestors to a Tishman Speyer development on 53rd Street and Madison Avenue. He accuses the contractor of employing unions that discriminate against minorities.

The scrutiny of construction coalitions has created a stigma that Mr. Haughton and others want removed. He says his organization never participated in illegal activity, but did view the actions of other groups as a problem. “Many coalitions didn’t understand the politics and were threatening the contractors to get money. They were disparately trying to get money and if they couldn’t do it legal, they would do it illegally.

“They pushed back against us, but we’re only trying to put black folk to work through organizations and a lot of contractors responded to that.” 

Allegations of racial discrimination against minority construction workers are not new, and several labor unions have been sued. “Thousands of these cases since the 1960s civil rights act made it illegal to discriminate and give preference to one person due to race, gender, and sexual preference,” says Professor Freeman. “There are huge cases against this.”

One  case decided in 1986 found several instances in which Local 28 of the Sheet Metal Workers offered apprenticeships to whites, overlooking blacks and Hispanics in the process. The case Equal Employment Opportunity Commission and the City of New York v. Local 638 … Local 28 of the Sheet Metal Workers’ International Association, charged the union with violating Title VII of the Civil Rights Act, and ordered the union to establish a 29 percent nonwhite membership goal. However, the union was found guilty of civil contempt twice for not abiding to the ruling. The court ordered that the fines for violating the verdict go into an Employment, Training, Education, and Recruitment Fund.

Professor Kate Bronfenbrenner is the director of Labor Education Research at Cornell University. She has done research into the affects court decisions have made in unionization, all the way to the 1934 Wagner Act. “There was corruption in the eighties and contracts were benefiting certain members,” she says. “So if you challenged the system, you’re risking your life. Blacks and Hispanics that challenged the system always had to do it in larger groups.”

“A new generation of organizers came to prominence in the eighties.”

 Josh Brown has worked in the construction trades since the eighties when his father ran a prominent coalition. Now, at 39, Mr. Brown is an independent contractor without work and looking to get hired. In a conversation outside his Frederick Douglas Avenue office in Harlem, he described the re al estate boom he saw during his youth, dominated by a few, large developers and their construction partners.

“Back in the 90s, developers told Congresswoman [C. Virginia] Fields, ‘we’re going to start trade apprenticeship programs and we’re going to make sure we get people in the community union books to get people in the union,’” Mr. Brown says. “Where were the trade programs?”

He adds, “The only way those in the community got unionized was to go through coalitions. They did more for the community then our politicians because they were the guys out on the streets,” says Mr. Brown. “It wasn’t the mindset that made coaltions bad; it was a few guys who decided to do stupid things that gave coalitions a negative name.”

United States Postal Service Cutting Saturday Delivery

Last week the Bureau of Labor Statistics reported a decline in the unemployment rate to 8.6 percent. Good news for President Obama’s re-relection campaign since the last president to win a White House bid on high employment was Ronald Reagan. (Here’s a graphic comparing both presidencies.)  But the news hasn’t deterred the United States Postal Service from announcing on December 5th cuts to its operation: eliminating Saturday delivery, cutting 150,000 jobs, and closing over 200 plants. The Atlantic reported that First Class mail, which generates the largest profit, has declined 25 percent in the last century; a main contributor to the USPS’ deteriorating budget. Two graphics are used as statistical evidence. 

The budget will assist in plugging up a $7 billion dollar deficit. USPS has until December 18th to sort out its finances.

Here’s an outline of other businesses affected by these cuts:

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Will the NBA Season Create a Distracted Workforce?

Both players and owners finally agreed to a contract last Friday that will get the NBA season started before the end of the new year. Although details of the collective bargaining agreement haven’t been released publicly, owners maintained throughout the negotiations of a 50-50 revenue sharing plan as oppose to the 57-43 one that have benefited players since 1998. Sixty-six games were saved, and the season will start with on Christmas day in time to unwrap the gifts and share eggnog.

The absurdity and bargaining both came to a screeching halt that day when the National Basketball Players Association dissolved in the face of a labor impasse for the first time in its more than half-century history. The characters — union president Derek Fisher with his earnest attempts at diplomacy; Roger Mason with his infamous “how u” tweet; commissioner David Stern with his ultimatums; and union lawyer Jeffrey Kessler with his fiery rhetoric and conspiracy theories — also changed.

But will the NBA make our workforce less productive? According to research done in 2000 by University of Maryland Professor Dennis Coates and University of Alberta Professor Brad Humphrey, they make the case that sport lockouts increases worker productivity since people won’t be distracted in water cooler sports talk.

 

If workers spend work time discussing the outcome of last night’s game, or organizing an office pool, or other such activities, this could affect the growth rate of total factor productivity. Differences in productivity growth are well-documented sources of variation in real per capita income.

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Trends in Construction drive Union Workers to Non-Union jobs

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It’s six in the morning, and Randolph Thompson, 47, bends over with a shovel in hand, scooping dirt onto a wheel barrel. Two men stand beside him while another takes the pile of dirt and dumps it onto a truck bed. Mr. Thompson works at a construction site in the Bronx, where the steel frame of a residential begins to show. 

An hour into the job, rain starts to pour. The owner of the construction site calls Mr. Thompson over; they won’t need him today. “It’s raining, we can’t do any brick work.” Come back tomorrow, he’s told.

“Are you serious? Gosh man, I work up early this morning and spent a Metrocard swipe.” He takes off his helmet, and wipes the dirt from his face. “See that? The plight of a construction worker.” 

Not long after arriving with his construction helmet, gray sweater and measuring rod, he starts his trip back home to search again for another job, any job. On the walk to the train station, rain pelts hard on his helmet as he tilts his head forward, reaching for his cell phone. He begins to dial his friend to help him with purchasing a Metrocard for tomorrow. 

For Mr. Thompson, the construction job was his first in three weeks. He already had plans for that money. He wanted to take his two children out for dinner and buy his son, Randy Jr., a pair of basketball sneakers.

As a member of Bricklayers and Allied Craftworkers Local 1, he counted 2008 as the last time he has worked a union construction job. Most of the jobs he works now are non-union, the only sector that’s hiring.

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College: Is it Worth it?

This past month, many news reports have focused on higher education’s cost. With college tuition rising and students graduating into a precarious labor market, conversations are taking place around the dinner table about whether college is a wise investment towards economic success. The Wall Street Journal ran a series, “Generation Jobless,” exploring the difficulties this generation faces in finding employment. A recent article, titled “What Hedge Funds Can Teach College Students?” noted that a college degree in 2011 is a bad investment.

By that arithmetic, technical colleges come out on top, Mr. Ades said. “We’re in a skills based economy and what we need is more computer programmers, more [nurses],” he said. “It’s less glamorous but it’s what we need.”

Law school, on the other hand, can end up a sucker’s bet in periods of high unemployment, experts in student loan-backed bonds say.

While college students often enroll in professional programs to wait out economic soft patches, the U.S. has far more law schools than other professional schools, resulting in an excess supply of lawyers, argue investors and analysts.

In recessions, law school graduates have a harder time finding work than other graduates from professional programs and are more likely to default on their student loans.

Law school is considered a bad decision by some. In a piece by Sara Morrison, profiling a freelancer applying to law school, the lead character plans to forgo her current jobs for the a professional degree, hoping for higher returns. According to the data above, it might not be a good investment.

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N.B.A Contract Stall Affect Local Madison Square Gourmet Economy

Both N.B.A. players union and owners have yet to settle on a contract that would end the lockout. The disagreement still stands with players refusing to accept any deal lower than 52.5 percent in profit sharing of ticket, merchandise, and food and beverage sales.  But amid the jockeying, the greater impact is to sports arenas.

Take, for instance, Madison Square Garden. It posted an 11 percent increase in revenue its first fiscal quarter, ending Sept. 30. According to an Associated Press article, the growth is attributed to its media business posting a $19.3 million profit. Revenue fell 6.9 percent compared to last year with the arena closing for renovations and N.B.A lockout. 

For the quarter ended Sept. 30, the New York-based company said its net income rose to $21.3 million, or 28 cents per share, up from $19.3 million, or 25 cents per share, in the same quarter last year.

Revenue fell 6.9 per cent to $177.6 million from $190.8 million, largely as a result of the shutdown of the Madison Square Garden arena and theatre during the quarter for renovations.

The profit beat Wall Street predictions, despite lower-than-expected sales. Analysts, on average, expected a profit of 21 cents per share on $312.4 million in revenue, according to a FactSet poll.

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