Independent electrical contractors enjoy an increase in prominence on job sites, but their union counterparts continue to be the standard by which alternatives must be judged.
The history of conflict between union and nonunion electrical contractors seems to have settled down, to the point that you seldom hear anything about it. The reason for calm may be an increase in professionalism, a softening of self-righteous attitudes, or the simple fact that they're too busy these days to spend time and energy sabotaging each other. Whatever the reason, today they enjoy a more-or-less peaceful coexistence animated by healthy competition for work.
The gaps between union and nonunion contractors may have closed somewhat, but important differences remain. The main points of distinction appear in the areas of training, compensation and workforce flexibility. At the same time, they face a common foe in the poor image the construction trades have among young people choosing a career.
Union membership has indeed fallen over the past three decades. Nationwide union membership in 2004 was 15.8 million people, 12.5 percent of the total labor force, which is down from over 20 percent in 1984, according to the U.S. Department of Labor's (DOL) Bureau of Labor Statistics. In the electrical world, membership in the International Brotherhood of Electrical Workers (IBEW) is down to about 750,000 from a high of more than 1 million in 1971. But while their numbers may have dropped off, the unions continue to play a significant role in the economy, particularly in the skilled trades.
In the electrical industry, the number of projects on which a contractor must be unionized has dwindled. The unions still enjoy a dominant position in many of the nation's largest cities, but the days when union contractors were the only ones large enough and experienced enough to handle a large-scale construction job appear to be drawing to a close.
The change came from a combination of factors, including a shift in the population's general attitude toward unions and some success on the part of organizations representing independent contractors in boosting the visibility and reputations of their members.
Independent Electrical Contractors (IEC), Alexandria, Va., has been working since its founding in 1957 to give a unified voice to the disparate interests of merit-shop electrical contractors. “Merit” shop contractors believe construction contracts should be awarded to the lowest qualified bidder based on merit, regardless of the company's union or nonunion affiliation, according to Associated Builders and Contractors, Arlington, Va. Among its other efforts, the IEC has made strides in establishing an alternative training program for apprentice and journeyman electricians and helping independent contractors expand into new areas of work such as voice-data-video (VDV) installation, as well as being a public advocate for independent contractors' flexibility, responsiveness and other strengths.
On the pro-union side, the National Electrical Contractors Association (NECA), Bethesda, Md., works closely with the IBEW in advocating for union contractors, acting as a conduit between the IBEW and its members' employers, offering management training to union contractors and cosponsoring with IBEW the National Joint Apprenticeship and Training Committee (NJATC), the organization responsible for training union electricians.
One realm in which union and independent contractors and their organizations are unlikely ever to find common ground is in their political activities, where they line up on opposite sides of the aisle. The IBEW, an affiliate of the AFL-CIO, is heavily involved in lobbying and promoting the interests of organized labor in legislative and regulatory issues at all levels of government. The IEC, on the other hand, is an advocate for small business issues.
Although their political activities are central to each group's identity and reason for being, these efforts don't have the same direct impact on the ground — in the competition for workers and jobs — that their training programs and compensation models have, so we'll leave politics aside.
Wherever the question of union versus nonunion electrical workers is raised, the subject quickly turns to training. Union electricians have long laid claim to being the most thoroughly trained workers in the business. The NJATC, established in 1941, has set the standard for turning out qualified electrical workers since its inception. Its intensive training program combines classroom work with on-the-job training under the supervision of a journeyman electrician or lineman, and offers various apprenticeship courses for residential and commercial/industrial electricians, utility linemen and voice-data-video installer technicians, as well as continuing education for journeymen. It trains the vast majority of electrical workers in the United States and continues to be the standard by which any alternative is judged.
The IEC's apprenticeship and journeyman training programs have gained stature over the years since they began in 1972. The five-year apprenticeship curriculum has qualified under the DOL's Bureau of Apprenticeship and Training standards, and combines 144 hours of classroom training with 2,000 hours of on-the-job training. The apprenticeship program hosts 10,000 apprentices a year, according to IEC.
The IEC also offers members training in business management through its IEC University program in the belief that workers with exposure to business fundamentals will make better decisions and will be better equipped to advance their careers into management or establishing their own contracting firms.
“The electrician of today has to have a business purpose about him or her to be successful,” says Larry Mullins, executive vice president and chief executive of IEC. “When a person goes through the apprenticeship program, and then spends years in the field working his or her way up to foreman and then project manager, that's where the entrepreneurial spirit enters. We provide them with resources and management education to branch out and start their own company.”
NECA also educates contractors on business, technical and project management issues through its Management Education Institute. The association also has recently launched initiatives to further emphasize its members' focus on quality workmanship. Among these is a new standards program called the National Electrical Installation Standards (NEIS). NEIS seeks to pick up where the National Electrical Code (NEC) leaves off. Where the NEC is fundamentally a set of safety standards, the NEIS seeks to establish enforceable standards for the quality of electrical work by sharing and codifying the latest best-practices in the field.
Union contractors are generally perceived to be more expensive than independent contractors. As a general rule, this may be true, but if they didn't do something to justify that higher rate, one would expect union contractors to have disappeared long ago. (Except in some of the larger cities, there's no longer enough widespread solidarity among workers from various unions that would force general contractors to hire union contractors over independents based strictly on their union status.)
Union electrical workers are bound by the union wage scale set in collective bargaining agreements. They also get a competitive benefits package from the union.
Independents see a downside for the workers in the way union wages are determined, and seek to offer an alternative. Union scale locks in a certain wage that differentiates based on job level but not on initiative. One union journeyman electrician may be 30 percent more productive than his peer working next to him, but both make the same wage because it's set by contract. Some independents suggest this lack of incentive for performance can encourage coasting and slow work on the job site.
The impression that the unions' negotiated wage scale invites abuse may well be exaggerated, but NECA and IBEW last month took an interesting step to eliminate the perception that sandbagging and other performance problems are tolerated on union job sites. They introduced a “two-strike” rule for dealing with workers who have been fired for cause.
In announcing the program, IBEW International President Ed Hill estimated that productivity within the union workforce breaks out this way: “Fifteen percent are top-notch producers, 70 percent are solid contributors, and the remaining 15 percent are on cruise control, looking for the path of least resistance, content to let others carry their load.” The poor work habits of the bottom 15 percent “infect” the rest of the group and “drag down” the union's overall reputation, Hill said in the announcement. “When a few workers don't produce, it gets noticed, and we all pay the price.”
Under the two-strike rule, any worker fired from two job sites within a twelve-month period is referred to a neutral member of the union's Appeals Committee for a determination on the worker's continued eligibility for referral by the union. Based on the committee member's findings in the case, the worker can be required to get additional training from the NJATC; dropped from the referral list for a period of time (four weeks or longer, depending on the seriousness or repetitive nature of the cause for dismissal); referred to an employee assistance program; or restored to the referral list.
NECA and IBEW said in the announcement that the two-strike rule is part of a larger effort to improve workplace productivity and increase market share.
Independents have the flexibility to compensate workers based on performance, giving bonuses to the most productive workers and added incentives for innovations that raise productivity.
“The biggest difference is that in a merit shop, people are compensated in accordance with how much they want to do,” says George Roberts, president of Denier Electric, a nonunion contractor in Ross, Ohio. His company takes a percentage of the difference between estimated cost and actual cost on each job and puts it in a pot. This pot becomes an annual bonus for the workers, divided up based on a point system. Points are earned for continuing education and job performance on safety, quality and productivity efforts. Roberts says the average electrician walks out with a bonus that's 20 percent of his annual salary, and credits the bonus program with a dramatic improvement in the firm's safety ratings. “We emphasize entrepreneurial spirit and embracing change. Whatever you incentivize will happen.”
Union contractors counter that on a typical independent contractor's job site, a handful of key people will be compensated very well, but the typical electrician pulling wire is paid quite a bit less than union scale. They see the requirement of a standard wage for all workers who've demonstrated equivalent skills as an important measure to ensure fairness and discourage favoritism.
In a response to market conditions, the unions are taking a new look at their labor agreements with employers' needs in mind, especially in areas such as the South, where the unions have lost influence.
“We're looking at how (the contractors) operate and are trying to find ways to accommodate their need for flexibility,” says Geary Higgins, NECA's vice president of labor relations. “The labor agreement lays out a set of rules that you operate under, and if that set of rules isn't consistent with the way work is done, we need to rethink it.”
For many contractors, one of the most valuable aspects of hiring union workers is being able to go to the union hall and hire from a pool of trained and qualified workers to supplement their workforce.
Selecting workers through the union ensures a base level of capability and eliminates the need to take out a classified ad in a local newspaper or otherwise solicit applicants whose skills must then be evaluated based on their work history.
“The biggest advantage of the union is the flexible pool of qualified manpower. When you need people, you can get them, and you can send them back when you're done,” says Al Church, president of Church & Murdock, a union contractor in Erie, Pa. “If you have to run an ad in the paper, and a guy shows up, how do you know if he's really qualified?”
Union and nonunion electrical contractors face a common foe in the stigma attached to the construction trades in the minds of young people choosing careers. For many graduating high-school students, a job in construction looks like a dead end, suitable only for those who have no college prospects and choose not to join the military. It beats bagging groceries and flipping burgers in terms of peer esteem, but most graduating seniors have what they consider to be higher aspirations.
Countering that impression by showing students that it's possible to pursue a rewarding and challenging career in electrical work is a constant crusade for both sides of the union divide. Both are active in high schools throughout the country, providing literature to guidance counselors and promoting the skilled trades at job fairs.
On the question of whether those who do choose to enter the electrical industry are pro- or anti-union, both sides claim the advantage. Union promoters say new entrants understand that the union gives them top-quality training, the security and benefits of collective bargaining and an advocate in disputes with employers. The independents point to an entrepreneurial spirit among young people that inspires them to look for flexibility to pursue new opportunities rather than following a preset progression of tightly defined job descriptions. Given the diversity of youth, it's possible to believe both sides are right.
The dynamics in the electrical contracting business as a result of the increasing parity between union shops and merit shops are causing both sides to become more creative and responsive to the current and future needs of electrical contractors. It's possible that competition between the two sides pushes them both to be better than they would otherwise be, to the ultimate benefit of the electrical industry as a whole and its customers.