July 2005
From the desk of Hugh Kelleher, Executive Director
Comments or suggestions for future items:
hughkelleher@aol.com
Overspending?
The Wall Street Journal reports that since 1990, income for median
American households rose 11%, while spending jumped 30%. Spending has
been propelled by borrowing--often through home refinancing and second
mortgages. Household debt has increased 80% since 1990--even with
adjustment for inflation.
Wage Increases?
National average wage increase so far in 2005: 3.5%.
New
Negotiations: A major round of local union negotiations will occur
over the next year. Sheet Metal Workers Local 17’s collective bargaining
agreement expires this July. Current union agreements with plumbers,
pipefitters, and electrical workers will all expire August 31, 2006.
Tough
Bargaining: Earlier this year, Wal-Mart decided to close a Canadian
store rather than reach an agreement with workers who had voted to
unionize. The workers subsequently decided to delay unionization. No
Wal-Mart stores in North America have union representation.
Changing Labor
Force: The national PHCC recently reported on a Washington Post
article describing “an historic shift” in DC from a white to a Hispanic
construction work force. In New England, jobs in lesser skilled trades
such as painting and landscaping now employ many Hispanics. Unskilled
construction jobs are often first step up American economic ladder.
More Jobs:
In April, the construction industry in Massachusetts hit its highest
level of employment since the late 1980s. Particularly strong growth in
the housing. Union construction, which depends heavily on large projects
and commercial work, had declined, but it too is showing signs of
growth.
Drug Testing:
In New Bedford, the owner of a power plant has demanded--and will
get--random drug testing of all construction workers. On other projects,
management groups are considering hiring only workers who consent to
random drug testing.
Lower Home
Prices? Economists question whether home prices can keep climbing.
Key point: in areas such as Massachusetts and California, far fewer
people can afford today’s prices. Massachusetts home prices are now 6.8
times higher than per capita income. Lenders deal with this out-of-whack
ratio by coming up with ways to allow people to afford properties that,
in earlier times, would have been out of reach.
A Solution…or A
Danger? How do people finance homes that would once have been
considered “out of their price range?” Lenders are promoting “interest
only” mortgages. These are typically adjustable rate mortgages, -- often
with 0% down payment. Borrowers keep initial costs low by paying only
interest on the loan. An astounding two-thirds of the California’s
mortgages in the first quarter were “interest only.”
The
Interest-Only Problem: Owners do not build up equity, unless home
values continue to increase. If prices drop, or interest rates rise,
millions of borrowers could be in trouble. Fed’s Greenspan has noted
these dangers.
Ban on Reverse
Auctions? Reverse auctions occur on the internet, when contractors
are asked to bid on a job. At a set time, bids are accepted. All bidders
can see the prices as they are posted. As the deadline approaches, bid
prices drop. A bill before congress would ban the practice.
Congressional
Testimony: Last month I had the honor of representing plumbing
contractors from around the country as the PHCC’s representative to the
US House Committee on Small Business. The topic: How regulated utility
companies use income from ratepayers to compete against small
businesses. For a full copy of my testimony, see
www.phccweb.org .
Health
Costs…Costly: In announcing layoffs of 25,000 workers, the
president of General Motors said that health costs account for $1,500 of
the price of each GM vehicle.
Bankruptcy:
A new Harvard Study reports that medical bills are responsible for half
of all personal bankruptcies. The finding points out need for some sort
of coverage for catastrophic medical events. Even minor medical
procedures can be disastrous, if you are not insured.
Health Premiums:
Expected to rise about 12% this year, and 9% in 2006. Effective
management of the Plumbers Union Local 12 Health Plan may actually
result in a decrease in premium costs for that fund.
Next Year’s
Superbowl: Will the Pats be back at the Superbowl in 2006? The
other important question is: Which Local 12 Journeyman and his/her guest
will be at Ford Field in Detroit next February 5? A Local 12 Journeyman
who completes 20 hours of continuing education qualifies to have his
name in the PHCC of Greater Boston’s New Year’s raffle for this
once-in-a-lifetime trip. Those who complete OSHA 10-Hour training become
eligible for a trip for two to the Caribbean.
New Law:
Contractors and workers are reminded that as of August 1, 2006, every
worker on a Massachusetts public construction project over $10,000 must
have completed the OSHA 10-Hour training program.
Shredders:
As of June 1, federal law requires all employers to properly dispose of
sensitive personal and financial information when ready to discard it.
Shredding, pulverizing, and burning are acceptable methods. Penalties:
$2,500 per violation and victims can sue.
Room
Temperature: The ideal temperature at which to hold a meeting: 67
degrees. People are most alert at this temperature.
Big Boys:
The nation’s largest mechanical contractor (by a long shot) is EMCOR
Group, Inc. 2004 annual revenue: $1.85 billion. This is more than a
billion dollars ahead of the second largest company. EMCOR is
represented locally by J.C. Higgins Co. of Stoughton.
New Code Books:
The PHCC of Massachusetts is packaging copies of the new Mass Plumbing &
Gas Code. Each PHCC member will receive a free copy. Non-member cost:
$119. Call 800-542-7422.
Future Plumbing
Licenses: Will include photographs.
Updated Meters:
The Wall Street Journal reports that California utilities are looking
into special gas and electric meters which will monitor the precise time
energy is used. Result: higher rates depending on time of day.
Workers Comp:
Plumbing, gas and electrical inspectors have been informed by the
state’s Industrial Accident Board that they must check to see that a
contractor has worker comp insurance, before a permit may be issued.
Boston Water &
Sewer: The Boston Water & Sewer Commission has put together an
excellent web site detailing information on water and sewer tie-ins in
the city. See
www.bwsc.org.
Florida Water &
Sewer: Ever wonder how they can keep building all those condos in
Florida, and how they afford the water and sewer infrastructure? One
proposal at the Florida state house: 2 cent tax on each roll of toilet
paper.
©PHCC of Greater
Boston, 5 Elm St., Danvers, MA 01923 • 978-777-8764
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