In our area, labor unions have developed a program called market recovery. To my understanding, the purpose of market recovery is to recover work the unions have lost to nonunion contractors.
The market recovery program has been in existence in our area for several years and has definitely impacted the amount and type of work nonunion drywall contractors can secure. It is my understanding market recovery is funded (in our area) by union workers who voted for and approved the program, as well as the method of funding. The union collects and manages the funds given to the union by the union’s employees.
These funds are then made available to union contractors, who incorporate these funds into their bid thereby lowering their cost—making their bid more competitive with nonunion contractors.
The union provides the union contractor a form, which the contractor fills out, describing the particulars of the project, also including the amount of hours the contractor estimates the framing, hanging or taping, will take. As an example, the union contractor may state that he has estimated 1,000 hours of drywall hanging. The union, after reviewing the overall request, may grant market recovery or reject market recovery. If the union grants market recovery, they will grant a certain dollar amount per hour.
In the example of 1,000 hanging hours, the union may give the union contractor $4 per hour. This would mean that for every qualifying hour the union contractor reports to the union the union will give the union contractor $4 up to a maximum of $4,000. If the union contractor completes the job using 900 qualified hours then the union will pay only $4 per hour on 900 hours or $3,600.
Union workersBecause union workers fund market recovery, I’m concerned that as the funds build up and as reserves begin to appear, the money these hard-working people pay for the program may be lost in accounting. I also don’t believe the union members who fund market recovery intended there be reserves.
Any time an organization collects money for the benefit of its members, it is vitally important that those paying and those collecting have a crystal clear understanding of how the money will be used and accounted for. In my opinion, the union members paying into this fund should receive interest or dividends on any reserves that build up in the fund.
ReservesIn the banking industry, banks set aside money for loan losses called “loan loss reserve.” Most banks set aside a percentage of each loan in a loan loss reserve account and include the exact amount of the reserve on their financial statements. As market recovery reserves build up into millions of dollars, I’m not sure if paying union members understand and agree that the funds should build into reserves.
As union contractors see these reserves build while their companies lose work to nonunion contractors, you can imagine the frustration.
The problem with reserve building is that every dollar that is not spent on market recovery is dollars not benefiting those who funded the program or those employing union workers.
Reserve building also concerns me because reserves might be used in emergency situations. If a serious enough financial situation arises where funds are needed immediately most likely a reserve fund is where the money may come from. In banking, when a loan loss reserve is set aside it can only be used for offsetting a bad loan and is highly regulated. In an emergency situation where union market recovery money is used for something other than market recovery, we may find there are serious legal issues that no one including the union has considered. I believe it would be very helpful and informative for the union to completely address reserve issues formally and completely for both union members and union contractors.
FairnessIt’s my understanding that the union uses it’s own discretion in providing market recovery to its contractor members. As a union contractor bidding against a nonunion contractor, it surprises me that the union will sometimes refuse to grant market recovery. In other words, the union’s decision to provide market recovery to its union contractors is not systematic from the contractors perspective.
What about contractors who are part union and part nonunion? Should they get market recovery for the union portion of their work? If a drywall contractor does his framing and hanging under a union agreement but performs taping nonunion, should he get market recovery for the framing and hanging portion of the work? Most likely the members who approved and funded market recovery didn’t realize or approve funding for partial union contractors.
This practice of funding partial union contractors seems contrary to the union’s goals of recovering nonunion work. I feel that providing market recovery to contractors who are partially union is contrary to the intent of union members, as well as the intent of union organizing efforts.
It really doesn’t matter if one is union or nonunion. I do believe it is important that both the funding members, as well as the union contractors, have clearly defined information regarding market recovery. Funds like this should include a business plan and mission statement, as well as a reserve business plan.
Clarity is critical in any successful plan or program and I think it’s time that the unions provide crystal clarity to its funding members and union contractors. Just to give you an idea of how much money we are talking about, consider the following and do your own math:
Let’s say as an average member pays $0.20 per hour for every hour he works. If a union member works a 40-hour workweek, he or she will contribute $8 for the week or about $35 per month on top of regular dues. If you take $35 per month and multiply that by say 4,000 members, that equals $140,000 per month or $1,680,000 per year. The union working members, who donate this money, do so for the sole purpose of giving it to union contractors who are competing against open shop contractors.
In a matter of a few years, market recovery could have reserves from $3 to $5 million in our area alone. We’re talking serious bucks!
Not knowing what the money can or can’t be used for should be a serious concern for everyone involved. You might be wondering why I care? I care because I want to be a part of something that is openly and properly managed. I care because this money doesn’t belong to me or the union: It belongs to the union members for a specific intended purpose.
If you’re a union worker or union contractor, it’s OK to ask the union for the current financial condition of market recovery in your area. As a union member, it’s OK to ask for financial reports on the money you’ve paid in. What’s not OK is not getting the information or getting it in a way that is difficult to understand.
Remember: Teamwork begins with a fair contract.
SIDEBARQuality Control Responsibilities: Supervisors/Foremen
Quality Control Responsibilities: Supervisors/Foremen
• Assume responsibility for the job’s quality control.
• Be familiar with company QC program.
• Hold QC meetings in conjunction with safety meetings or as required to make all employees aware of QC issues, as well a claims issue.
• Hold pre-job QC meetings with management in order to become familiar with the project overall, as well as specific job related QC issues.
• Gain an understanding of the specifications related to companies work, as well as the information related to other trades and their requirements.
• Upon receiving materials, inspect material to ensure the materials received are the materials ordered and meet the requirements of the job.
• Ensure the materials are not defective or damaged by visual inspection of the product.
• Do not proceed with company work if the work of the trade before has not been properly completed.
• Do not proceed with company work if the work done prior to company work is defective in any way and advise employees of same.
• Do not cover or conceal work, which may be defective and advise employees likewise.
• Document all deficiencies, which are in your opinion or in the opinion of others, to be deficient.
• Advise company management of all deficiencies, as well as customer.
• Inspect the work of other trades and train employees to do the same.
• Establish methods to properly manage paperwork generated by the QC plan.
• Notify management of ideas to better improve QC plans, as well as awareness to QC plan and claims.
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