La­bor pacts stir fight in San Jose

The Mercury News - - Local News - Scott Her­hold Colum­nist

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.

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