AZ's Construction Unions Find "Zero Interest In Doing Business With
Us"
 ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌


View this email in your browser
<[link removed]>

IF YOU ARE ENJOYING THIS NEWSLETTER, OPT IN TO SUBSCRIBE.
Please log in to "My Account <[link removed]>" and
click "Manage Newsletters."

 

 

'Zero Interest in Doing Business': TSMC Snubs Phoenix Construction
Workers

Subhead 22pt Georgia Bold

President Biden and Commerce Secretary Gina Raimondo took a victory lap
through Phoenix in December, when they announced that federal subsidies
in the CHIPS Act had lured one of the largest foreign direct investments
in U.S. history. Taiwan Semiconductor Manufacturing Company (TSMC) plans
to spend $40 billion in Arizona as it builds a new state-of-the-art
"fab," where it will produce leading-edge computer chips.

The Inflation Reduction Act has brought even more business to the desert
city. Soon after the law passed, a startup raised $75 million to build a
new lithium-ion battery factory
<[link removed]>
outside Phoenix. And a bevy of chips- and greentech-linked industries
are breaking ground, creating a cluster of advanced technology jobs in
the metro area. All this has come on top of a massive influx of
residents to Phoenix, the fastest-growing big city in America, that
shows no sign of letting up.

Biden's sales pitch
<[link removed]>
at the fab emphasized the importance of "hiring union folks." Yet local
contractors continue to rely heavily on non-union workers. So far, TSMC
has declined to sign a deal with labor, which union leaders stress would
ensure a supply of skilled workers for the Phoenix plant.

"The parking lot is just full of Louisiana and Texas license plates.
They'd rather import non-union workers who would be paid a subpar wage
than even have a conversation with the unions," said Aaron Butler,
president of Arizona's Building and Construction Trades Council.
Butler managed to secure one meeting, over Zoom, with TSMC Senior Vice
President Peter Cleveland. "It was the iciest meeting I've ever been
in," he said. "There is zero interest in doing business with us."

Arizona has long been a right-to-work state, meaning that even in
unionized shops, workers can choose not to pay dues. That has devastated
union density and drained the coffers of local chapters. The unions that
are able to survive in this arid climate are typically the most
technical crafts, like electricians and sheet metal workers, which
require longer apprenticeships.

Now that the labor market is heating up, some less technical crafts lack
the manpower to immediately staff jobs. Even where they have had
available workers, several labor representatives said they have been met
with hostility from TSMC in particular. LiUNA Local 1184, the
Laborers' Union, does not have a single worker at the site, according
to business manager Mike Dea. Carpenters, cement layers, and brickmasons
have also struggled.

Butler's own Local 469, which represents plumbers, pipe fitters, and
HVAC technicians, has been able to place workers at the TSMC project,
where he estimates that his local provides around 60 percent of the
mechanical work. The sheet metal workers' local has also seen recent
growth, increasing membership from around 500 in 2018 to 850 today,
according to Jeff Holly, Local 359 business manager.

But with less-skilled crafts currently lacking manpower, the building
trades have sought guarantees that work will be available once they have
rebuilt their ranks. That will require investment in training. "It's a
chicken-and-egg game," Butler said, since many of the unions are
"holding out on training investments because they're broke."

[link removed]

UNIONS ARE SEEKING CERTAINTY in the form of a project labor agreement,
which would set wages and work rules while still giving TSMC the right
to hire non-union workers if organized labor is unable to meet staffing
needs. Crucially, a PLA would increase investment in training, both by
giving unions reason to invest and by setting a level for employer
contributions.

But the Commerce Department's guidance for companies seeking CHIPS
subsidies, released last month, only lists project labor agreements as a
nice-to-have
<[link removed]>.
PLAs were cut from the bipartisan CHIPS legislation
<[link removed]>
during negotiations. That has given union leaders far less leverage in
talks.

The chilly standoff between labor and employers in Phoenix might come as
a surprise to national pundits who have criticized CHIPS guidance as
gummed up with costly labor and environmental standards.

Writing in The New York Times this week, Ezra Klein echoed TSMC's
complaint
<[link removed]>
that the company's expenditures in Arizona could be as much as four
times those in Taiwan. There is little serious effort to lower costs of
construction and reshoring, he wrote, with the government instead
"layering on requirements."

Klein pointed to language in the guidance urging companies to use female
construction workers, including by ensuring access to child care. (The
guidance doesn't ask companies to provide child care-just to check
that affordable options are available near the job site.) Likewise, PLAs
are not required, just "strongly encouraged."

In the highly concentrated semiconductor industry, where a few key
players are the overwhelmingly likely recipients of funding, these
nonbinding wish list items in guidance amount to little more than polite
suggestions.

Despite the uncertainty about future demand from TSMC, however, some
unions are forging ahead with big workforce investments. LiUNA is
building a $6.5 million training center outside Phoenix, looking to bulk
up so they can ultimately win jobs.

UNION CONSTRUCTION WORKERS JUST WON a foothold in Phoenix that has
nothing to do with federal funding, when the city council narrowly voted
last month to raise the pay for workers on city construction jobs. That
could increase pay scales in the private sector, which is competing for
construction workers.

Prevailing wage requires contractors on government projects to pay their
workers no less than the typical salary for the trade in that region.
It's basically a sector-specific minimum wage, intended to prevent a
race to the bottom for the cheapest workers.

Phoenix's ordinance takes the prevailing-wage system that the
Department of Labor already uses on federal projects and applies it to
city development. It includes a carve-out for residential construction,
so that it does not directly impact affordable housing.

The most right-wing member of the council joined progressives in
supporting the ordinance, which they passed in a 5-4 vote over the
objections of business-friendly Mayor Kate Gallego. Gallego's former
senior policy adviser is now director of state government relations at
TSMC, and industry groups for contractors bitterly opposed the measure.

A similar ordinance failed in 2021. Vice Mayor Yassamin Ansari, who
voted for the measure, said it had gained bipartisan support this time
because "there's a war on the working class. I think Democrats and
Republicans can often agree on this."

Workers spoke in favor of the ordinance at a heated city council meeting
<[link removed]> in March. "Downtown was
pretty much built by people from out of town," said Jason Sangster,
business manager of Phoenix's Ironworkers Local 75. "It was built by
Texans, it still is being built by Texans."

Sangster noted that his local completed its last project for the city in
2012, more than a decade ago. The prevailing-wage ordinance would allow
his contractors to bid downtown, he said.

A representative of the Arizona Builders Alliance, an affiliate of the
national industry group Associated Builders and Contractors, warned
councilors that the ordinance would be met with legal challenges.

Dea, of the Laborers, said the new prevailing wage for city construction
workers could lift standards for Phoenix-and made the case for
investing in training union workers for the long haul.

"If the rest of the country's economics went down, the city of Phoenix
wouldn't for years," Dea said. He predicts "five or six years of boom
time, in the public sector alone. They've got to do it because of all
the infill, infrastructure, schools, water treatment, streets, just to
handle the people that have moved here."

~ LEE HARRIS, STAFF WRITER

Follow Lee Harris on Twitter <[link removed]>

IF YOU ARE ENJOYING THIS NEWSLETTER, OPT IN TO SUBSCRIBE.
Please log in to "My Account <[link removed]>" and
click "Manage Newsletters."

[link removed]

Click to Share this Newsletter

[link removed]


 

[link removed]


 

[link removed]


 

[link removed]


The American Prospect, Inc., 1225 I Street NW, Suite 600, Washington, DC xxxxxx, United States

Copyright (c) 2023 The American Prospect. All rights reserved.

To opt out of American Prospect membership messaging, click here
<[link removed]>.

To manage your newsletter preferences, click here
<[link removed]>.

To unsubscribe from all American Prospect emails, including newsletters,
click here
<[link removed]>.