Our elected bureaucrats in Washington DC are aiming directly at the construction industry with the current Senate version of the health care bill. The bill passed by the Senate today singles out the construction industry when it comes to providing health insurance. The bill doesn’t put any health insurance requirement on small businesses with less than 50 employees UNLESS they are in the construction industry. Construction industry firms that employ more than five workers will be mandated to provide health insurance to all employees. This is the same mandate required for big businesses. (Read this or this or google Construction Industry Health Care Bill).
Why? Jeff Merkley, first-term senator from Oregon who added the amendment, says it is to even the playing field when it comes to bids – to make sure small construction firms who don’t provide health insurance don’t have an unfair cost advantage when it comes to bidding jobs against firms that do provide health insurance.
The real reason? Union contractors want to penalize non-union contractors. This is the same thinking that keeps the Davis-Bacon Act (prevailing wage) on the books, costing the American taxpayers up to 2.5 times more per project than jobs built using normal competitive bidding procedures.
What Jeff Merkley and his colleagues aren’t smart enough to know is that a small percent of construction firms are bidding jobs against union contractors. A majority (a vast majority) of contractors are small businesses providing a service in the residential market, building homes, adding bathrooms, decks, landscaping, installing new electrical panels, repairing plumbing disasters, building new fireplaces, redesigning kitchens, finishing basements . . . the list goes on. Those contractors will have higher overhead costs, which means a higher price to their clients.
Homeowners across the country will pay more for every project, and, in many cases, that means the project won’t get built. Which means the construction industry (the REAL construction industry, the one a majority of contractors across the country work in) will continue to limp along.
And that helps our economy how?
I know (don’t tell me) that this doesn’t go into effect until 2014 – another stupidity of the entire bill – but when it goes into effect we need to make sure this provision isn’t in place. Or make sure the American people realize how they will pay for it.
It sounds like your beef is with the unions, not the healthcare bill. There is a lot to beef about concerning both. The one point I have in defense of unions is that without them we would all still be slave labor working 14 hours a day seven days a week. Wouldn’t corporate America just love that? Imagine if all the employees in this country were members of strong unions. We wouldn’t be talking about a healthcare bill because everyone would have a viable health plan. So many people would not have lost their retirement savings in 401K plans because they would have had solid pension plans. I recently blogged about the plight of the American worker at http://www.easychairentrepeneur.com/blog.
I do believe that unions breed mediocrity. And I believe the entrepreneurial spirit thrives better in a non-union environment. I also believe that most average day working folks would benefit more from what unions have to offer.
There is a reason the government has been anti-labor for along time. If workers in good wages and have good benefits they pose a threat to the power brokers in Washington D.C.
The healthiest our nation has been was at the height of union memberships. Higher wages mean more taxes being paid. The average home had one wage earner and still had rising incomes.
When was the last time that occurred in this country?
Put simply we have a real mess on our hands and I feel sorry for all of us. We are all going to pay a price, and the lobbyists who have brought us the best government money can buy
will smile all the way to the bank.
Joe –
I agree that, without unions, we would be in much worse shape. They served a valuable purpose in the past, successfully breaking the power of business to ruin the little guy and take advantage of people.
My beef with unions is that they are now doing what big business did in the past. They are too powerful and too mighty, and their ability to influence the healthcare bill like this shows their power is too strong. They are using their power to take out the little guy – smaller construction firms operating in the local market.
I can’t imagine if all employees of this country were members of strong unions – God help us all. They have too much strength and power already. In the construction industry, unions represent less than 10% of the workforce in the construction industry, primarily working on publicly funding projects.
There is a time and place for everything. Unions had their place and served an outstanding purpose. Now we live in a global economy that didn’t exist when unions began. Since unions can’t control jobs being sent overseas (yet), they are focusing on jobs that can’t be outsourced, the local residential market. The local residential market won’t pay it! And where will that leave smaller construction firms?
Michael
The Debate is Not About Unions – It is About Companies Not Providing Health Care and Shifting Costs
Construction industry firms and too many other companies refuse to provide healthcare to their workers while sending them to the emergency rooms, hospitals, Medicaid and welfare offices for subsidies. This cost shifting drives up the insurance premiums of union and nonunion firms that do buy insurance for their employees. I reject the argument that nonunion means no insurance… The ABC and AGC claim most all of their firms provide comprehensive healthcare to the workers and they speak for the nonunion in construction…
Global economic factors and unions? We see most companies moving into the U.S. construction from abroad from countries where healthcare for workers was in place decades ago and unions are far stronger than in our nation. Note the Canadian and European general contractors earning hundreds of billions outbidding our firms – nonunion and union – in latest ENR report on the world construction market. Also note that union firms have a far larger share and the majority share in some construction sectors and regional markets on private work and have for some time. With most construction in the last fifty years private market work, the hundreds of thousands of unionized firms, many very large enterprises, could not have survived on public building work alone.
What about the tough economy today as an excuse for not providing employee health insurance? The Merkley small business amendment would not take effect until after 2014 and most firms not providing health insurance today did not do so in the construction boom times no matter if in residential, commercial or industrial markets. Even public builders had high rates of uncovered employees as profits soared in the industry. To plead poverty now only masks the refusal to do the right think when record profits were the rule of the day. There is no correlation between company profits in the construction industry and the provision of employee benefits or level of wages. Go figure…
The Senate ( Merkley ) Amendment would exempt 65% of the construction industry firms, take effect sometime in 2014 and would NOT require firms to provide healthcare to their workers if they paid a small fee to offset their employee uncompensated healthcare bills for each employee over the 5th full-time employee working 50 weeks the previous year.
Uncompensated care bills are in the billions and are added to the healthcare premiums every business that provides insurance must pay as well as individuals purchasing healthcare for their families. The General Accounting Office claims this number is around 30% of health premium costs and is the reason thousands of firms – union and nonunion – have had enough. To ask a firm to subsidize their own workforce health care costs and those of their competitors is asking too much.
Businesses who preach lower government deficits and health care cost reform while pushing and shifting the health costs for their employees onto Medicaid rolls, public assistance and the local/state/federal debt are pretty pathetic in their speechifying. The construction industry is one of the most hazardous with five times the death rate of average work place occupations and yet too many firms race to the bottom by passing their worker medical bills to the rest of us. Even if Merkley Amendment passes into law and takes effect in mid 2014 most of the industry will rely on the rest of the insured to pick up the bill for their employees when they or their family need healthcare. Without a solution to this uncompensated, “free care” issue the health care system will go broke and everyone will suffer. That construction employees have been forced to be the most frequent visitor at the free clinics, emergency rooms and Medicaid office is an industry disgrace we need to remedy one day soon for the sake of our health care system and tarnished industry image.
Again, union and nonunion employees work in a very dangerous industry and want health insurance for themselves and their families. As long as irresponsible firms refuse to pay a fraction of the costs of their frequently injured workers’ healthcare, health insurance will be far more expensive for the rest of us regardless of how we receive our health insurance coverage.
It seems amazing to hear certain businesses arguing for the same worker benefits (none) common a century ago but some long for that time and it shows. I am a business person but I have a tough time watching businesses shifting their costs to others and expressing outrage when asked to pay a fraction of their costs so gladly left unpaid. Instead of arguing for the firms shifting health costs to the rest of us why not try to encourage them to do the right thing and pay their company healthcare bills. The Senate bill, while far from first rate, does have billions in subsidies and incentives for small businesses wanting to purchase healthcare coverage for their workers… but that part has missed the attention of those having no intention to do so.
Thanks for covering an important issue to all businesses purchasing health insurance with real health insurance bills on their desks while watching competitors shifting their bills to their inbox month after month. Who is killing health care providers, hospitals and public assistance programs? Construction industry firms without covered employees only need to look in the mirror for a large part of the answer.
The view from outside, what a business columnist in Canada’s largest newspaper sees when he looks at America’s struggle with caring for its citizens:
The home stretch toward a more caring U.S. – http://www.healthzone.ca/healt.....int/745190