Labor pacts stir fight in San Jose
Quietly but steadily, the San Jose City Council is approaching a major decision this fall that touches an age-old fault line in city politics — whether the city should require that big public works projects be built with union labor.
When the council votes on the issue — tentatively scheduled to be debated on Oct. 3 — it will be one of its most significant choices this year, involving millions of dollars of public contracts.
“This is a classic three-sides story,” says Councilman Chappie Jones, who sat on the committee that considered the issue. “Your side, my side, and the truth. The council is confronted with the task of figuring out the truth.”
When you dig into the details — and believe me, the details matter — you may need a bottle of aspirin nearby. But the big picture might be described as the chasm between the views of electrical worker Will Smith and contractor Jim Salata.
Smith, a tall, angular man who bears a faint resemblance to his namesake in the movies, is an 18-year member of the International Brotherhood of Electrical Workers. He’s a product of east San Jose, a father of five, and a new homeowner. And he is proud of what union membership has brought him.
He showed up at a City Council meeting last May to plead with the lawmakers to require union labor on a big apartment
project planned for the Greyhound site in downtown San Jose. “I’m here to ask you to keep the American dream alive in San Jose,” he began.
As it happened, the council disappointed Smith and several dozen union members in yellow shirts that night. The Greyhound project wasn’t funded by the city. And the council, hungry for new projects, had little leverage to make demands on the developer.
Over the summer, however, the unions have been pushing the council to require something called “project labor agreements,” or PLAs, for city public works projects. Essentially, it’s an agreement to hire union laborers like Will Smith. It requires contractors to sign an agreement with organized labor and hire from the union hall.
And that’s where the initiative runs into the hackles of people like Jim Salata, the president of Garden City Construction, an engaging man with a quick sense for the absurd.
Over the last 30 years, Salata has achieved a reputation for sensitive restoration of historic buildings, working on public projects like the Jose Theater and private restorations like the old Faber’s bicycle shop on South First Street.
Salata runs a non-union shop but pays the prevailing wage and sometimes hires union subcontractors. Because he’s a good boss, he has employees who stay a long time. And he’s deeply skeptical about requiring the labor pacts, saying it will mean less competition for city projects.
“The language on the PLA agreements I’ve seen requires non-union people to join the union,” he told me. “In my view, it ‘s meant to discourage them from bidding the job.”
So what’s the geeky stuff? Well, one of the core issues is why the city would require a project labor agreement. In the local construction industry, almost all non-union contractors already pay the prevailing wage.
Josue Garcia, the head of the local Construction Trades Council, argues that requiring a labor pact is a check against contractors who cheat their employees on wages or benefits. “It’s like a CHP car on the freeway,” he said. “Everybody follows the rules.”
But the city already has an office that pursues wage violations. And recent labor problems in San Jose have occurred with private projects, not with city public works.
Two unanswered questions are the threshold the city puts in place, and what exceptions it allows. The unions have tried to apply the labor pacts to all projects above $2 million, while others, worried about the impact on small business, have suggested the threshold be set at $6 million.
A number of well-connected builders believe the idea of labor pacts should be scrapped completely, and they quietly have been organizing an effort to stop the idea.
Me? I come down on the side of Jim Salata. To me, it stands to reason that if you require contractors to sign a labor agreement — and hire from the union hall — some of them will decide to bid elsewhere. That means less competition for public jobs.
In the end, it will cost the city more money, likely millions of dollars more. One study in Ohio showed that requiring labor agreements cost 13 percent more. Union leaders dispute those numbers. But that CHP vehicle doesn’t come free for taxpayers. I’m not persuaded it’s worth it.
Jim Salata, president of Garden City Construction, runs a nonunion shop but pays the prevailing wage and sometimes hires union subcontractors.