Should We Consider a Cost of Living Contract?

Because of the poor economic times, contractors in Las Vegas are asking that workers take a $2 pay cut and give up negotiated pay raises. This, is in response to the article below from the Las Vegas Sun.

Can we expect this to be a trend that might possibly affect our wages? At a union meeting - roughly 8 months ago, it was reported that contract negotiations successfully resulted in our having a new contract for San Diego. While I congratulated our staff, I also said that in many ways we are bound by a contract for three years that has us continually trying to play catch up with inflation. Whatever we gained financially in the previous contract - was already lost due to inflation (especially with gas cost, then at $4 per gallon). I then informed one of our Administrators about how Matt Gonzales of the San Francisco County Board of Supervisors successfully created a minimum wage in San Francisco that is considered the highest in the country - but also includes a mechanism for yearly cost of living adjustments. Adjusting for the cost of living in our contract would be a way of keeping the situation in check - without having to take it in the shorts. I asked, if investigating the contract language might be worth doing? The Administrator responded that whatever we came up with - might sound good to us, but that the contractors would still need to agree with it. Well, that sounds like a fair enough response; however, I still believe that this might be something worth pursuing.... Especially when considering - the very real possibility - that we will soon experience a great devaluation of our dollar followed by hyperinflation.

Many of the leading economists (who are NOT featured by the corporate news) correctly predicted and tried to give warning of the financial crisis to come. Ralph Nader warned Congress months prior to this happening and this and he was ridiculed. Ron Paul has also been sounding the alarm for quite some time. McCain said our economy was and is fundamentally strong - and he along with, Obama raced to save the bankers with a financial bailout. Six months prior to it happening, many experts said (and I relayed this information to many of you) that the economy was going to "crack" in September of 08 - and it did. Linsey Williams correctly predicted that the price of oil - which was at $140 per barrel - was going to plunge to $50 a barrel. None of the so-called experts saw this coming. Warren Buffett lost a fortune, but Linsey was right. The reason for this plunge in the oil market was to bankrupt Saudi Arabia - and that is indeed happening. This is turn, has and will lead to the further destruction of our economy. So, what's next? - Many of the "real experts" are calling for hyperinflation.

Anyways - getting back to matters at hand - having a union contract with a mechanism for cost of living adjustments just makes good sense. A contractor might bid on a multi-year project, but what control does he have over the cost of concrete or a sheet of drywall two or three years later? Especially in consideration of - or at least the possibility of hyperinflation - wouldn't it be in our best interest to at least explore this contract language towards safeguarding our wages against inflation?

- Alan Wasdahl, Member of Carpenters Union Local #547, San Diego, CA

from the LAS VEGAS SUN:

Without owners at table, unions unwilling to talk

By Alexandra Berzon

Thu, Mar 12, 2009 (2 a.m.)

After meeting Monday to discuss a request that CityCenter and Cosmopolitan workers accept pay cuts and other concessions, building trades union officials were prepared to reject the proposal made by general contractor Perini Building Co.

A source close to the building trades, who said he was not authorized to speak about confidential negotiations, said that at a regularly scheduled building trades meeting Monday the unions decided they are no longer willing to negotiate with the general contractor as a proxy for the projects’ owners. Any further talks must be conducted directly with the owners — MGM Mirage for CityCenter and Deutsche Bank for Cosmopolitan.

“The council would rather have MGM Mirage at the table,” said Steve Ross, executive secretary-treasurer of Southern Nevada Building and Construction Trades.

Perini executives approached union leaders last week to discuss the financially troubled projects, asking for a $2-an-hour wage cut from about 11,000 trades members at CityCenter and Cosmopolitan. Perini also asked that workers surrender raises of about $1.75 to $3 an hour scheduled to take effect over the summer for many trades and stop taking 15-minute morning breaks.

The requests come as the contractor struggles to finish the $9 billion CityCenter project and the Cosmopolitan, with a price tag of more than $3 billion, by the end of the year and mid-2010, as planned.

People present at the meetings between the general contractor and union said Perini officials told them the project owners, who are working to find financing to complete the projects, had asked that the general contractor request the concessions. Perini officials did not say during the meetings whether there would be consequences if the unions reject the requests.

Union officials are waiting to be contacted again by Perini, Ross said Wednesday.

“It’s highly unlikely” the unions would accept the deal, he said. “We want to be part of a solution, but rolling back wages and benefits is not it.” Officials with Perini, Deutsche Bank and MGM Mirage could not be reached for comment.