News: Construction in doldrums; jobs bill on hold in Olympia

Mar 21 2012

From The Seattle Times:

The line snaked outside Local 440 in Seattle's Central District, plumes of cigarette smoke rising among the silhouettes.

The union represents laborers, including many workers in the heavy highway industry: tunnel builders, pavers, flaggers.

Of its 1,300 nonretired members, about 600 are currently unemployed, and in the dark drizzle of a recent morning, dozens waited to sign a list at the union's roll call, a chance to stay eligible for any job dispatch that might come in.

Though there are signs that the economy is slowly starting to improve, the upswing has not yet come to the local construction industry, which is still struggling after a devastating recession. In the Puget Sound region, construction suffered the largest employment losses of any industry, and since then job growth has flat-lined.

In Olympia, a bipartisan jobs bill intended to aid the industry has been delayed by the Legislature's budget battle, and a national effort that would fund more projects has been held up, hamstrung by a partisan gulf between House and Senate versions of a transportation and infrastructure bill. The U.S. Senate passed the bill Wednesday.

By 2015, the Puget Sound area can expect to get back fewer than half of the 45,600 construction jobs it lost industrywide over the course of the recession, according to projections from the Puget Sound Economic Forecaster.

That's bad news for unemployed construction workers, who have seen little improvement since the state's recession-era low in January 2011. One year later, just 700 of the total jobs lost in construction had been recovered statewide, according to data from the state Employment Security Department.

Those slight gains mean little when tens of thousands remain without work.

Dick Conway, a Seattle economist who copublishes the Forecaster, tracks the economy in King, Kitsap, Snohomish and Pierce counties.

The best thing that can be said about the industry here, he said, is that it looks like it has bottomed out.

Uneven rebound

Even Conway calls the region's overall economic outlook relatively rosy. By 2015, manufacturing should see 85 percent of jobs return. The wholesale and retail trade, as well as professional and business services, is expected to rebound by more than 100 percent.

But only 41 percent of the region's unemployed construction workers can expect to get their jobs back by then, according to Conway's prediction. He believes the industry will gain momentum slowly, but by 2022 it's still not projected to regain its pre-recession peak.

Still, Conway stressed projections can change and are dependent on a number of variables.

Meanwhile, stories about contractors who have pared down their staffs and their own pay have become commonplace, as have accounts of workers with mounting bills and no job prospects in sight.

Many unemployed or underemployed workers have spent weeks taking courses that might make themselves more qualified to be long-term hires: They learn how to deal with hazardous materials, how to guard against erosion, how to keep job sites and their fellow workers safe.

Mark Samuelsen, 46, an electrician with 22 years of experience, just got another certification to improve his job prospects.

"I'm still debating taking off for another state," said the Snohomish County electrician, who in late 2009 took a voluntary layoff from his job as a union rep for the International Brotherhood of Electrical Workers Local 46. Samuelsen said he did that in part so someone with a family to support wouldn't have to.

With technical skills to offer, he figured he'd quickly find another way to earn a paycheck. Instead, he wound up unemployed for nine months, all the while running up debt and inching his way just halfway up an 800-person job wait list at his union.

Now, even with an unemployment payment, he said he's $500 in the red each month after taking care of his most pressing obligations, including a mortgage, a second mortgage and credit-card payments.

"I'm looking to survive another year," said Samuelsen, a self-described perennial optimist. "I'll land on my feet, whatever happens."

Contractors pare down

Field workers, while often the first to be cut from payrolls, aren't the only ones who have suffered.

Longtime contractor Steve Klimek, of the Seattle-based Redhawk Group, said the number of cranes he's seen dotting the Seattle skyline has been an indicator of the industry's success — and, more recently, its painful slump.

In 2006, he remembers looking out from his deck on Queen Anne and counting some 40 cranes. By 2008, there were five or fewer.

That same year, he watched $35 million in pending construction projects drop off his books in less than a month as developers backed away.

His company hunkered down, slashing to 15 a staff that once numbered 40, and Klimek and his partner cut their own salaries. The company, founded with a focus on retail projects, faced a hard truth: Nobody wanted to develop retail anymore.

"We had basically taken the company down to survival mode," he said.

He's not the only one. The well-documented problem of vacant homes, followed quickly by vacant commercial space, has left many developers with little reason to build.

Some segments of construction are picking up — apartments in Seattle in particular — and several upcoming projects also offer promise: a $600 million Amazon.com office-tower complex; the Highway 99 tunnel; the new 520 floating bridge.

Chris McClain, a business agent for the Ironworkers' Local 86 in Tukwila, said preliminary work on the 520 project has been helping his union's workers, but he still summed up the outlook in a single word: bleak.

He and John Kearns, a business manager for a cement masons and plasterers union in Tukwila, said that about 30 to 35 percent of their members are unemployed.

A legislative answer

In an attempt to jump-start the industry, some state legislators hope to pass a bill that would move up the schedule for construction projects already slated to start in the next few years.

The state should be taking advantage of increased competition for contracts, said Sen. Derek Kilmer, D-Gig Harbor, and Sen. Linda Evans Parlette, R-Wenatchee, who are working on a version of the bill.

Both say the plan makes sense, but Parlette said the Legislature must first reach an agreement on the operating budget.

Construction jobs have a multiplier effect on the economy: For each job loss in construction, roughly one more is lost elsewhere in the economy as projects are halted and workers have less to spend. It's a point driven home by industry lobbyists and backed up, too, by Conway.

When a construction worker's paycheck is replaced with a comparatively paltry unemployment payment, "there's a loss of consumer spending in the economy that hits a variety of industries," he said.

Both the Associated General Contractors (AGC) of Washington and the Washington State Labor Council back the legislation, which exists in a few different forms in the House and Senate.

Jeff Johnson, the head of the labor council, said he's been told some version of it will probably pass but that it's not currently a priority.

A debate over using revenue bonds to finance the bill — which would bypass debt limits — has divided Republicans and Democrats. Parlette, the Senate Republican Caucus chair, said Republicans want the bill financed with a general-obligation bond instead.

Rep. Hans Dunshee, D-Snohomish, also working on the bill, said Republicans have recently pulled their support for the revenue bonds.

"I'm a little mystified," Dunshee said, adding that the amount of work financed by the bill will be smaller if revenue bonds aren't used to finance it. "At this point, I'm a little frustrated with the lack of serious negotiation."

Without some kind of legislative action, the industry's outlook won't improve, said David D'Hondt, the executive vice president of the AGC of Washington.

"I'd put it pretty simply," he said. "If you want to fix the economy, fix construction."

Waiting for a chance

Early one morning at Local 440, the usual crowd of about 30 awaited calls for a job. Dispatcher James Watson looked out at the workers and inhaled sharply.

"Job call!"

His shout was met by a quiet cheer. "This is an ASAP call for bridge work on Spokane Street," Watson said. "If you know about bridge work, you know it's tough work."

That was no deterrent for these workers, who sat up in their chairs as Watson started calling out numbers, starting with what's called the A list, composed of the union's highest-ranking members. The room stayed quiet until someone raised a hand to claim the job. He'll be employed for two weeks.

Another hopeful worker muttered a four-letter word under his breath. Another job just out of reach.

Lark Turner: 206-464-2761 or lturner@seattletimes.com