U.S. workers can expect wage gains this year
With payroll job growth back on track after being negatively affected by the 2017 hurricane season, stronger wage gains are expected for U.S. workers this year, according to Bloomberg Law's Wage Trend Indicator™ (WTI).
"The tighter the labor market gets, the more wages have to go up for employers to attract and keep workers," says Kathryn Kobe, an economic consultant who maintains Bloomberg Law's wage trend index database.
U.S. payrolls bounced back in October 2017, expanding by 261,000 after an increase of only 18,000 jobs in September 2017 when the numbers were affected by hurricanes Harvey and Irma, the Department of Labor (DOL) reported in November 2017. The jobless rate decreased to 4.1 percent—the lowest since 2000. Labor markets reportedly are returning to normal or even benefiting from a surge in construction jobs in the affected states, Kobe says.
The WTI increased from 100.26 in the third quarter to 100.27 in the fourth quarter; an increase in the WTI figure typically signals wage growth during the next six to nine months.
According to DOL, four of the WTI's seven components contributed to the fourth-quarter gain—civilian unemployment rate; job losers; expected inflation; and industrial production. Negative factors were average hourly earnings and production/service workers expansion. The neutral factor was the scarcity of professional/technical workers.
Businesses challenge Minneapolis' $15 minimum wage
Minneapolis is set to fight a lawsuit brought by businesses challenging its $15 minimum wage ordinance. In the lawsuit, businesses are asserting the city doesn't have the authority to create a base wage higher than Minnesota's minimum wage, which increased to $9.65 per hour Jan. 1.
Enacted in Minneapolis June 30, 2017, the ordinance raised the city's minimum wage for employers with more than 100 workers to $10 per hour as of Jan. 1. The city's minimum wage will increase to $15 per hour by July 1, 2022; small businesses would have until July 1, 2024, to begin paying the $15 minimum wage.
The Minnesota Chamber of Commerce filed a lawsuit Nov. 10, 2017, in a state district court asking for temporary and permanent injunctions, arguing the Minneapolis ordinance is pre-empted by state law.
"Never before in the history of our state has a city attempted to mandate the minimum wages that private employers must pay their employees," says the chamber in its complaint. "Rather, the power to mandate minimum wages has always resided exclusively with the State of Minnesota."
Minnesota Chamber of Commerce President Doug Loon says the minimum wage law creates an "administrative nightmare," especially for employers with multiple facilities throughout the state. He says conflicting operational rules are burdensome and negatively affect businesses' ability to create jobs. The chamber was joined in the lawsuit by other business associations.
Minneapolis City Attorney Susan Segal is confident Minneapolis can defend itself and move the wage law forward. She said the chamber raised many of the same arguments in 2016 in a lawsuit challenging the city's mandatory paid sick leave ordinance, which took effect July 1, 2017. That ordinance mandates city workers accrue one hour of "sick and safe time" for every 30 hours worked; workers can accrue up to 48 hours per year and carry over unused hours. Although the paid sick leave lawsuit still is being litigated, the city was successful in earlier court proceedings.
Loon says business groups need to keep challenging municipal "overreach."
"This and other wage and benefit mandates passed by Minneapolis—and passed and contemplated by other cities—threaten to open the floodgates to a whole new area of legislating for local governments," he says. "This overreach ought to be stopped, and municipal authorities should not stray in their authority."
Construction apprenticeship plan tested in Columbus, Ohio
The city of Columbus, Ohio, is testing a new construction apprenticeship and local hiring plan for public projects with the hope it will boost the local construction workforce.
The project labor agreement (PLA) between the city and the Columbus Building & Construction Trades Council, AFL-CIO, requires the organization to host apprenticeship fairs; use 20 percent Columbus residents and 25 percent regional residents on a project; and collect 5 cents for every hour each member works to help fund an apprentice scholarship fund. Open-shop contractors also will be able to bid on the project.
The first project to operate under the program is the construction of an $8 million firehouse. The local chapter of the Associated General Contractors of America has expressed concern the new workforce requirements could make it more difficult for contractors to bid on projects competitively.
It is not uncommon for state and local governments to specify hiring requirements for publicly funded projects. However, the details of initiatives promoting local hiring can be complicated. In some markets, contractors have difficulty finding enough workers to meet local mandates. For example, contractors working on the new Little Caesars Arena in Detroit were fined almost $3 million through March 2017 for not meeting the city's local hiring requirements. Although the contractors did their best to recruit local workers, skilled workers were scarce.
Because PLAs often are made with local trade unions, the private sector is displeased PLAs require nonunion members working on a project to pay into union benefit programs—such workers likely will never be able to collect benefits without joining the union.
A May 2017 study conducted by Beacon Hill Institute, a conservative Boston-based think tank, determined PLAs increased Ohio school construction costs 13 percent, reporting such projects cost an additional $23.12 per square foot to build. Although Beacon Hill Institute's research was narrow in its scope, the Associated Builders and Contractors said its research also has shown PLAs drive up costs, sometimes 12 to 18 percent.
Workplace injury and illness rates decline for fifth year
The injury and illness rate for employees in private industry declined for the fifth consecutive year.
The private industry rate was 2.9 cases for every 100 full-time worker equivalents in 2016 compared with three cases for every 100 full-time worker equivalents in 2015; the rate continually has improved since 2003 when it was five cases for every 100 full-time worker equivalents—except for when it remained unchanged in 2012.
The rate for state and local government workers also decreased, falling from 5.1 cases in 2015 to 4.7 cases in 2016.
The combined 2016 rate for all private and government workers decreased from 3.3 cases in 2015 to 3.2 cases in 2016. The estimated total number of work-related injuries and illnesses decreased from 3.66 million cases in 2015 to 3.53 million in 2016.
However, David Michaels, Occupational Safety and Health Administration administrator under the Obama administration, says the most recent numbers still are too high, citing studies that find the injury and illness data submitted undercounted the actual number of cases compared with workers' compensation claims and emergency room visit reports.
A panel organized by the National Academies of Sciences is expected to release a report this year regarding how to improve work-related injury and illness data collection.
The improvement in rates mainly stemmed from a lower rate for minor injuries—which dropped from 1.4 cases in 2015 to 1.3 cases in 2016—and from injuries in which an employee missed one day from work at most.
The construction industry's injury and illness rate decreased from 3.5 cases in 2015 to 3.2 cases in 2016; contractors with above-average rates include framing (seven cases), structural steel (6.3 cases), roofing (5.6 cases) and water and sewer (4.1 cases). Manufacturers had a rate of 3.6 cases in 2016 compared with 3.8 cases in 2015.
GCP Applied Technologies contributes to hurricane recovery efforts
GCP Applied Technologies Inc., Cambridge, Mass., donated roofing and flooring materials to Habitat for Humanity to support the repair, rebuilding and new construction of homes for families affected by hurricanes Harvey, Irma and Maria.
Habitat for Humanity has a goal to help more than 6,000 families in Texas, Florida and Puerto Rico repair and rebuild their homes. In southern Florida and the Florida Keys, Hurricane Irma's strong winds caused extensive roof damage. GCP Applied Technologies donated its Grace Ice & Water Shield® self-adhering roof underlayment and Tri-Flex® synthetic roof underlayment to help protect rebuilt houses from future damage. After Hurricane Harvey caused record-breaking flooding in parts of Texas, GCP Applied Technologies donated flooring tools to help Habitat for Humanity replace flood-damaged floors. The company also raised more than $60,000 through employee and company donations to assist GCP Applied Technologies employees living in hurricane-affected regions.
"We are fortunate all our employees in the affected areas are safe, and we are committed to supporting them during this difficult time," says Kevin Holland, vice president and chief human resources officer at GCP Applied Technologies. "Recovering from these disasters is going to take a long time, and we will continue to help where we can." (To read more about NRCA member hurricane relief efforts, see "Bigger than anything.")
NRCA's One Voice initiative continues to grow
NRCA is pleased to announce Firestone Building Products, Nashville, Tenn.; OMG® Roofing Products, Agawam, Mass.; and Valspar Coil Coatings, now a part of Sherwin-Williams Coil Coatings, Minneapolis, have joined NRCA's One Voice initiative and upgraded their associate memberships to "partner member."
The One Voice initiative is a transformational approach to addressing the roofing industry's most critical issues and concerns—with one voice—to secure its future. The campaign aims to collectively recognize threats to the industry and the opportunities they may present. The One Voice initiative initially will focus on developing a national worker training and certification program, affecting change in Washington, D.C., and increasing professionalism in all industry sectors.
For more information about NRCA's One Voice initiative, including a list of the 16 current One Voice member partners, visit www.nrca.net/onevoice.
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