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The Business Roundtable and American Labor –

By

J. C. Turner, General President

International Union of

Operating Engineers, AFL-CIO

 May 1979

Today I would like to try to do some plain talking about what’s happening to labor unions in this country.  And particularly I want to look at what is happening to construction unions and our members.

The building trades unions are experiencing a multi-faceted attack which is coming from at least four directions:  first, we are seeing the erosion of local bargaining patterns and practices which have existed and worked well for years; second, we are seeing a wedge being driven between union contractors and the building trades unions by the burgeoning open shop movement; third, we are seeing business financing for court cases which are stripping construction workers of their traditional legal protections; and finally, we are seeing in 1979 a massive assault on the wage protective statutes including the Davis-Bacon Act and the state “little” Davis-Bacon acts which for fifty years have protected construction workers from wage busting by unscrupulous contractors.

Where is this attack coming from?  In my view, it is no coincidence or accident that we are under assault from every side.  Rather it has become apparent to me from the events of 1979 that a systematic and well planned campaign is being conducted to totally destroy the building trades.  Following extensive research and analysis of the groups which are orchestrating this assault, I have concluded that the current attack is the result of a decade of planning and groundwork by the Business Roundtable acting in concert with regional and local construction user associations, the contractor associations, the U.S. Chamber of Commerce, pro-business acad xxxxxxxxxxxxxxxxxx could not read the last part of this sentence.

Let me start by reviewing a little history.

In the late 60’s business in this country was booming.  Profits were rising and that meant physical plants were expanding.  Millions of union members made this boom possible and that means strength at the bargaining table.  In short, it meant that our families received their fair share of the business prosperity of the 60’s.  So the experience of the 60’s demonstrated a principle which has operated consistently over the history of labor-management pulled in our belts together; in good times, we have shared the wealth.

In 1979, like the late 60’s, we are in the midst of another economic expansion yet there is no sharing of the wealth this time.  Indeed, the corporate before-tax profits for 1978 were the highest since 1950, and in 1978 alone, corporate profits rose by 26.4 percent.  But where is the American worker, particular the construction worker, in the midst of these record profits?  I will tell you.  We are experiencing massive unemployment in the construction industry with some crafts in certain areas of the northeast suffering a ninety percent unemployment rate.  Those construction workers lucky enough to have a job are being forced to give up wage increases instead of receiving their fair share of these rising corporate profits.  We see non-union contractors underbidding union wages by two, three, four and more dollars.  Ten years ago the hiring hall was respected.  Today a huge non-union workforce is being created and there is no stability in labor relations.  Ten years ago we worked closely with most contractors.  Today we see a new breed of double-breasted contractors.  They try to take away all our traditional rights at the bargaining table and then go out and underbid themselves with the non-union company.

We see a series of court decisions limiting our right to picket, and giving union contractors the right to set up non-union companies and the right to repudiate their collective bargaining agreements.

We see Davis-Bacon and know what repeal of that statute would mean to millions of construction workers and their families.  We see that ten years ago we were able to negotiate long term agreements for our people.  Today, employers threaten to ignore the contracts they have signed covering individual projects if we don’t give them what they want.

Today, we see the skyrocketing expansion of the open shop contractors who are undermining long established bargaining practices and are acting as a wedge to take away rights we won years ago.  We see it in both local and national negotiations where management rights clauses deprive us of control over work practices, over hiring halls, over overtime and all types of hard-won working conditions.  And all the time non-union contractors continue to undercut union wages.

In my view, all of the changes we have seen occurring have been consciously planned for and then carried out by the Business Roundtable, which is an organization of the largest industrial construction users in this country, which came into existence, not surprisingly, ten years ago.  At first, you might have believed that the attack upon the building trades is coming from the contractors themselves, especially the non-union contractors.  But it appears to me that this is not the case.  Our real enemy is clearly these large industrial concerns, organized as the Business Roundtable who are using the contractors and their associations as soldiers in the battle.  The reason for this is simple:  the cost of construction is ultimately passed onto the construction users by the contractors.  The economic expansion of the 60’s also brought with it inflation and rapidly increasing construction costs.  In order to put a lid on these costs, the construction users determine that they would band together in what they then called the Construction Users Anti-Inflation Roundtable.  Not only were the large industrial users suffering from the direct effect of higher construction costs but they also greatly feared the “ripple” effect which high construction wage settlements were having on the wage settlements which their own industrial workers would seek.  So they wanted to cut construction wages to cap both their direct construction costs and to prevent the upward push on industrial wages from high construction wages.  Their purpose was to put the lid on costs by pressuring their construction contractors to slash wages.  I will lay out all of the ways in which the Roundtable determined that it could gain control over labor-relations in the construction industry, but let me first set forth a little of the history of this very important corporate organization, known then as the Construction Users Anti-Inflation Roundtable, now known simple as the Business Roundtable.

In the late 60’s, the big corporations decided to go after what I call the back-bone industries like construction.  The reasoned that the labor relations policy of these industries could be controlled by centralizing the economic clout of the prime industrial consumers of construction.  They intended to gradually establish non-union contractors to undercut the economic position of unionized employers and through the strategic use of their purchase orders, the large consumers would insure their control over the contractors, both union and non-union.

And let me point out one more economic phenomenon that we occurring in the 60’s, because it is crucial to understanding the origins of the Business Roundtable.  The steel industry, more than any other industrial concern, wanted to weaken the construction unions back in the 60’s.  U.S. Steel and other large steel manufacturers knew that putting in new technology meant a giant construction bill.  So in 1967, the President of U.S. Steel observed that:

Steel companies are in desperate need of modern facilities to compete with lower priced imports but can’t afford to build them if the costs of construction becomes so high that it defeats the advantages of new facilities.

 

There is another reason for steel’s interest in our industry.  It is the producer of the single most costly building material.  The higher wage of our members, reasoned U.S. Steel and its Chairman, Roger Blough, the few construction projects there would be, thus cutting into new orders of steel.

So, what happened?  The original Roundtable was organized in 1969 and, as I have said, was then called the Construction Users Anti-Inflation Roundtable.  The driving force behind the creation of this group of construction users was, not surprisingly, Roger Blough, the retired chairman of U.S. Steel.  It was Blough’s intention to forge an alliance of the chief executive officers of about 100 of the nation’s top corporations which were also the largest corporate spenders on construction.  The goal was simple:  reorganize and centralize the construction industry.  The seeds of the Construction Users Anti-Inflation Roundtable are to be found in an earlier group, founded in 1965, called the Labor Law Study Group.  This small group of executives started promoting the idea that labor was too powerful and that if the business community stuck together it could chip away at that strength.  Its members included labor relations executives and attorneys from G.E., ASARCO, R.H. Macy, Ford, G.M., just to name a few.

The Study Group decided to examine all of the legal aspects of union strength and so they created task forces to look at labor relations problems in specific areas.  There were at least five areas of major concern to this group:  (1) strikes in vital industries and services; (2) so-called restrictive work practices; (3) resistance to automation and prefabrication; (4) hiring halls and (5) wage standards legislation.

The group also set out to quietly make new friends on the Hill and the Washington Post observed of the efforts of the Labor Law Reform Study Group:

To combat [union strength] in this area, their behind-the-scenes work has led them into many fields.  They have been instrumental in introducing 24 “labor law reform bills” now pending before Congress.  They have met privately with Senators and Congressmen, cabinet officers and key White House officials.

 

While the group focused some of their energies in Washington they saw themselves as “organizers,” not lobbyists.  So they set out to organize the diverse elements of the business community around common anti-labor strategy.  Because of the total secrecy which surrounded these early meetings, no one may ever know exactly what took place between 1965 and 1968, but it is clear that a group of large industrial construction clients were organized by key corporate leaders including Roger Blough of U.S. Steel.  Ten principal members of the Labor Law Study Group, including A.T.&T., Union Carbide, Exxon, General Motors, ALCOA, U.S. Steel, General Electric, General Dynamics, International Harvester and B. F. Goodrich were determined that they would bring about the reorganization of labor-management relations in construction.

So between 1965 and 1968 Blough and a few other top industry leaders spoke privately with various contractor groups.  Together they concluded that the problem in construction was competition between various contractor groups over a limited and highly skilled labor market.  Their solution was simple:  eliminate competition between contractors and introduce competition among workers by promoting the open shop.

On September 25, 1968, a top officer of U.S. Steel became Chairman of a National Association of Manufacturers’ group to study the construction industry.  The proposed topics of investigation were restrictive work practices, hiring halls, wage settlements and unity in the industry.  Needless to say, NAM’s members included most of the large industrial firms I’ve mentioned and with this move, they publicly declared their intentions to intervene in the construction industry.

On October 17, 1968, two hundred industrial owners and contractors converged on Houston.  They came to attend a conference sponsored by the Employer’s Council of the Gulf Coast Area of Texas whose motto was “Stabilize Labor Management in Construction.”  The Texas group seems to have been a local pilot project for the Roundtable.  Here is how one reporter described how local users and local contractors would attempt to slash construction wages using the Employer’s Council of the Gulf Coast Area as the vehicle:

. . . [P]roject owners are given a participatory role in the Houston area through membership, as “owner-subscribers”, in the Employer’s Council, which includes all of the major contractor associations.  As bargaining approaches, the owner-subscribers meet with the contractor negotiators to discuss the situation, and as bargaining proceeds the owner-clients receive progress reports and the contractors in turn learn how the owners feel about certain issues and how much client’s support they may receive in event a strike comes.

 

At the Houston Conference, the local users and contractors heard the new plan for restructuring the construction industry.  They were told of the national owners’ intention to unite the industry and they were told what role they would have to play.  Local contractors were urged to form regional bargaining units and the users were urged to form Local User Roundtables.  The role of the financial community was also discussed.  Our speaker said:

I call upon you [the national’s insurance companies] to stipulate with their loans that contractors and owners seeking these funds be not allowed to use them in their contractual relationships with contractors in any way detrimental to the collective bargaining procedure of the construction industry . . . I call upon the banks of the United States to follow a similar course in the use and application of money . . . It is as simple as the bankers right to grant or reject a loan based on no other reason than that he doesn’t like which side of your head you parted your hair.

 

On November 20, 1968, the U. S. Chamber of Commerce itself called a two-day conference on construction and every element of the industry represented.  One speaker called for the repeal of Davis-Bacon and urged a “massive” effort to reform the labor laws particularly calling Davis-Bacon an inflationary anachronism.  Another speaker, representing Ebasco, called on the group to undercut the union labor market by creating a national hall, “non-union if necessary.”  He suggested that this workforce be “computerized, inventoried, recruited, trained, referred and managed by professionals as a personnel office for industrial contractors” and advised that this new “work force” be given new job classifications and a new national labor agreement, negotiated and tailored to the needs of industrial constructors.

Shortly thereafter, NAM issued its report called “Chaos in Construction.”  It called for (1) restructuring inter-industry relations, (2) eliminating scheduled overtime, (3) repeal of Davis-Bacon, and (4) the restoration of management rights at the workplace.

Almost simultaneously, the Chamber of Commerce released its study approving an identical program and recommending two national councils, one of owners and once of contractors, be created.

Two weeks later two full-grown business organizations emerged from these seeds.  The first was called the Construction Users Anti-Inflation Roundtable, and was headed by Roger Blough.  The membership list was strikingly similar to both the Labor Law Reform Study Group and the Gulf Coast Employers’ Council including G.M., G.E., Dow Chemical, U.S. Steel, Union Carbide, Exxon, and ALCOA.  By now there were more than one hundred construction owners involved in the group.

Eleven national contractors, including Atkinson, Bechtel, Dravo, Fluor, Morrison-Knudsen, and Austin became the “contractor advisory group” to the Construction Users Anti-Inflation League.

The second group which sprang up was an association of local contractors centered around Ohio and drawn from Pennsylvania, New York, Ohio, and Kentucky who announced that they had formed a regional bargaining association of two hundred contractors.

A large contractor from Pittsburgh headed up the group and said that he had received pledges of support and financial contributions from other contractors.  In turn, U.S. Steel, A.T.&T., Shell, and Westinghouse became “associate” members of this regional contractors group.

In 1972, the Construction Users Anti-Inflation Roundtable officially closed ranks with its friends in the Labor Law Reform Study Group.  In 1973, these two groups merged with the March Group, an alliance of chief executive offers who thought business’s image needed improving.  Together they formed what is now known as Business Roundtable, with one subcommittee concentrating on construction and another subcommittee focusing on labor law.  But most importantly, by 1978, this new federation boasted of almost two hundred corporate members and let me tell you there’s only one membership qualification:  you’ve got to be big.

In fact, a professor up at Rutgers University, Dr. Phillip Burch, has just completed a report on the Roundtable membership. He found that Roundtable members were almost all members of the Fortune 500 and that almost all of them are drawn from the top ranks of this elite group.  IN fact, the total sales of Business Roundtable members last year was over ¾ of a trillion dollars.  That’s more than the total GNP of every man, woman and child in Germany, Belgium, The Netherlands, and Switzerland.

Burch came up with another interesting discovery.  Ninety-one percent of Roundtable members are drawn from heavy industrials and utilities.  He also established that there are overwhelming ties between the governing body of the Roundtable and the large financial institutions of this country with nearly 70 percent of the Roundtable’s governing board tied to these institutions.

And how is the Roundtable governed?  Burch established that the Roundtable as a whole meets only once a year.  Its governing power rests in the Policy Committee which meets every two weeks and believe me you don’t see any small businessmen on that committee.  In fact, only the chief executive officer of a company can be represented on the Policy Committee.

The Policy Committee members include A.T.&T., ALCOA, Chrysler, du Pont, G.E., Union Carbide, U.S. Steel, Sears and Roebuck, Exxon, Goodyear, Hewlett-Packard, Continental Corporation, B.F. Goodrich, Bethlehem Steel, National Steel, Milliken and Company, Kennecott Copper, and IBM – to name a prominent few.

Since 1975, the Roundtable has started 17 national task forces on virtually every aspect of the American economy including those dealing with anti-trust, energy, the environment, foreign investment, international trade, government regulation, taxation, wage price controls, labor legislation, and corporate organization.  The Roundtable also has a standing Economic Research Committee of top flight economists.  This committee commissioned the widely publicized study produce by the Wharton School on why Davis-Bacon should be repealed.  It has also placed several articles about economics and inflation in the Reader’s Digest, a magazine that goes into homes of one out of every four American families.

Finally, the Roundtable has a Government Relations Committee which maintains close ties with every major government official through the chief executive officers.  It’s been involved in fighting every major piece of labor and progressive legislation in the last ten years including Equal Treatment for Construction Workers, Consumer Protection, and Labor Law Reform.  They are now leading the fight for the repeal of the Davis-Bacon Act.

I would now like to turn away from the history and structure of the Business Roundtable and focus on the present.  When I began this speech, I mentioned to you the four strategic areas where the Roundtable is focusing its enormous economic resources to literally attempt the total annihilation of the organized construction industry.  These four areas are (1) the sabotage of established local bargaining patterns through intervention in the collective bargaining processes by the local construction user groups, (2) the establishment of the open shop sector and in particular, the ABC, to use it as a wedge between the building trade and union contractors, (3) the funding and support of litigation aimed at destroying the legal protections afforded construction workers, and (4) the repeal of the Davis-Bacon Act.  Let me now turn to a closer examination of each of these areas.

First, what has been the role of the national and local user groups in local bargaining?  They have brought extensive pressure to bear on local contractors to form local or regional bargaining units.  This was a necessary concession in particular to the specialty contractors who had been seeking the strength of numbers of years.  Regional or area multi-craft bargaining was the only answer.

Also, the large industrial users were to be admitted to membership in these regional groups as “associate” members. Here they would direct or “coordinate”, as the Roundtable puts it, the labor relations policy of the local user groups as well as the local contractors.  In effect, the individual local contractor chapters traded control over their long-range policy for a stronger hand at the bargaining table.

Moreover, the National Roundtable through the local user groups worked hard to enhance the position of local and regional contractors at the bargaining table by introducing to them contract clauses drafted at Roundtable Headquarters.  In 1974 the Roundtable published the first in a series of pamphlets called Coming to Grips with Some Major Problems in the Construction Industry which contained sample contract clauses to be used to eliminate scheduled overtime for example.

As to hiring halls, contractors were told that the union hiring hall gives unions too much power over the personnel function and, therefore, recommended creation of management operated data banks or referral systems, possibly with the help of federal funds, to establish a national hiring hall.

Indeed, through the two volumes of Coming to Grips with Some Major Problems in the Construction Industry, the Roundtable provided local contractors with advice and contract clauses in the areas of scheduled overtime, hiring halls, jurisdictional disputes, restoration of the management role, wage settlements, restrictive work practices, prefabrication and strikes.  Just to give one example of how the relationship between users and contractors work – The National Roundtable was active in designing bid specifications to be utilized by the construction users which would require greater use of prefabrication.  In turn, the National Roundtable and the local users pressured the contractors and their bargaining associations to push for collective bargaining language during negotiations favorable to greater use of prefabricated materials.  Needless to say, the contractors were provided with the appropriate contract clauses on prefabrication by the Roundtable.  And the Roundtable went down the line in all of the areas I just enumerated to cajole, pressurize and indeed coerce contractors to tow the Roundtable line during bargaining – a line which has led to the steady erosion of many bargaining patterns and practices which we had long fought for and naively believed to be sacrosanct.  And the enforcement mechanism used by the Roundtable was the threat of its enormous purchasing power which it held continually, though usually silently, over the heads of the contractors.

The Roundtable has established a presence in collective bargaining in every major municipality in America.  Go to St. Louis, Detroit, Los Angeles, or anywhere eels you like and the major industrial clients have formed a local user’s group.  For example, in 1976 there was an Illinois-based group called the Illowa Construction Users Council.  Their membership included ALCOA, J.I. Case, Caterpillar Tractor, Commonwealth Edison, Deer & Co., DuPont, Interstate Power, Iowa-Illinois Gas and Electric, Monsanto and Ralston-Purina.  The Council has a policy committee and it speaks as a single voice for users in the area.  And one of the prime groups it speaks to are the local contractors.  The contractors themselves form an advisory committee as part of the local Roundtable which is an action oriented coordinating committee which oversees a group of local task forces.  The task forces include those on work practices, legislation, research and statistics, project agreements, labor relations, manpower, overtime, industry funds and public relations,.

But I should make it clear that the National Roundtable leaves nothing to chance with these local groups.  They have commissioned in-depth studies on all construction industry problems and they’ve given local groups a very clear message about how and when different parts of the industry are going to change.  And let me assure you we have only started to see the results of these studies.  The Director of the Roundtable’s Construction Committee tours the country talking to local groups instructing them on how to adhere to the latest phase of the Roundtable’s program.  So this is precisely where the erosion of many of our local bargaining practices and patterns has been coming from.

Now let me turn to the second area where the Roundtable has concentrated its enormous economic clout – it is the support, and its sometime even the creation, of the open shop sector.  Why?  The answer is simple.  Faced with the growth of the open shop industry, union contractors and the building trades have been figuratively if not literally blackmailed into lower wage settlements and the giving up of many protections which have long appeared in our collective bargaining agreements.

What has been the role of the Roundtable in the open shop sector?  In the mid-60’s the ABC was still a local trade association operating around Baltimore, and Brown and Root was the largest non-union national contractor.  The Roundtable realized that the growth of these two groups would seriously hurt organized labor and so through its members, it began funneling to Brown and Root and the ABC contractors more business.  The Roundtable even urged Brown and Root to join the ABC giving it an enormous credibility boost and financial shot in the arm.

I say to you that the Business Roundtable has been the prime force in the open shop construction movement in this country.  But don’t take my word for it.  Listen to the words of an AGC attorney at its first conference on open shop construction:

Then there was the Roger Blough Construction Roundtable.  It was established for the purpose of doing away with these inflationary pressures . . . The Roger Blough Roundtables today are talking about open shop construction.  They are talking open shop construction to the biggest owners and users of construction in the United States today . . .

 

But why was the AGC sponsoring an open shop conference?  Because the Business Roundtable urged it to do so and made the AGC realize that non-union contractors would not suddenly fall from the sky.  And again at the urging of the Roundtable, the AGC lawyers were sent across the country showing AGC contractors how to go double-breasted.

FRIENDS, THERE CAN BE NO DOUBT THAT THE LARGE INDUSTRIAL CONCERNS THROUGH THEIR CONTROL OVER NEW CONSTRUCTION BUSINESS SPAWNED THE OPEN SHOP MOVEMENT AND MADE THE ABC INTO THE NATIONAL ORGANIZATION IT IS TODAY.

Recent examples of the manner in which Roundtable members are using their purchasing power to steer business to the open shop sector can be found in Maine and Ohio.  In Ohio, Dayton Power and Light has awarded a major power plant contract to Daniels over Ebasco and many of you might have noticed that Boise Cascade also recently awarded a major contract to Daniels in Maine.  Now these are two unusual events in our industry, but I think they are of great interest considering that Boise Cascade and Dayton Power and Light have been members in good standing of the Business Roundtable for several years and this is typical of the way the Roundtable has fostered non-union construction.

The third area where the Roundtable has hit us very hard is in the courts.  The Roundtable has a litigation committee of top lawyers and those lawyers have made themselves part of every piece of major construction and labor litigation in the last t years including Boys Market, Burns, Scott Hudgens, South Prairie, Higdon and Connell.  The Roundtable’s support of these cases has been indirectly, and directly in the form of Roundtable financial support for the litigation.  The Business Roundtable is, in fact, quite proud of its litigation efforts.  In petitioning for tax-exempt status in 1972, the Business Roundtable cited its litigation efforts as one of its primary projects and listed over forty cases in which it had been involved.  Included in this listing were the Boys Market case, in which the Supreme Court reversed prior law and held that labor unions could be enjoined from strikes which were in violation of no-strike clauses; the Burns case in which the Supreme Court held that a successor employer is no obligated to abide by his predecessor’s labor union contract; and Scott Hudgens, in which the Supreme Court overruled prior law and held that labor unions did not have a First Amendment right to picket an employer in a private shopping mall.

Coordinated litigation efforts by large employer groups including the Business Roundtable have resulted in legal decisions specifically undermining the rights of construction workers.  In the South Prairie case, the Supreme Court held that it was permissible for a union contractor to go double-breasted under certain conditions.

In the Higdon case, the Supreme Court held that although prehire agreements were lawful in the construction industry, the employer was at liberty to repudiate them at any moment.

Finally, the Supreme Court’s decision in the Coopell case also probably familiar to many of you.  There, the Supreme Court held that a specialty craft union could not lawfully sign a subcontracting clause with a general contractor which did not employ members of its craft.  The Supreme Court’s reasoning was that such clauses were unlawful where the parties did not have, or intend to create, a collective bargaining relationship – one where the employer employed members of the particular craft seeking the subcontracting clause.  Traditionally, of course, subcontracting clauses between unions and contractors employing their members have been the fundamental mechanism for preserving craft work.  The National Labor Relations Board has upheld the continuing validity of our normal subcontracting agreements but cases are, however, now before the appellate courts where the Business Roundtable’s attempt to destroy unionism in the construction industry continues in full force.

Last but not least, I want to tell you how the Business Roundtable has over the last decade systematically set out to strike at our very heart – in the area of wage protections.  The record that I have set forth earlier shows that at the very first meeting of the Business Roundtable, even back in the days when it was known as the Construction Users Anti-Inflation Roundtable, its large corporate members called for the repeal of the Davis-Bacon Act.  Davis Bacon was pinpointed early on as a source of increased wage costs in construction which in turn created a ripple into the private nonconstruction wage structure of the construction users.  The Business Roundtable believed at its inception in 1969 that it could not eliminate Davis-Bacon until it had accomplished two goals.

First, would be the commissioning of academic studies not publicly associated with the Roundtable establishing the inflationary impact of Davis-Bacon and, second would be the influencing of public and political opinion through the media to believe that Davis-Bacon is a leading cause of inflation.  Once these two goals had been accomplished, the Roundtable intended to, and did, go after Davis-Bacon administratively and legislatively.  The following is a sketch of the Roundtable’s ten year campaign which is culminating in the anti-Davis-Bacon attacks occurring in 1979:

The Business Roundtable’s 1972 application for tax exempt status reveals it had commissioned several academic studies through the Economic Research Committee, one of which was on the economic affects of the Davis-Bacon Act.

  1. In January 1975, the Business Roundtable-sponsored study of Davis-Bacon, authored by Dr. Armand Thieblot, was released by the Wharton School of Business.  This study formed the basis of every subsequent journalistic and government call for repeal of Davis-Bacon and Thieblot testified on May 2, 1979, before the Senate Banking Committee in support of the GAO’s demand for Davis-Bacon repeal.
  2. In 1975, the Business Roundtable sponsored a series of articles in the Readers Digest calling for Davis-Bacon repeal.  The Readers Digest series and the Thieblot study were disseminated to the media all over the country through the regional and local user councils and the contractor associations.
  3. In 1976, 1977, and 1978, the Business Roundtable in alliance with the contractor associations attempted, through the administrative processes, to take the authority to administer Davis-Bacon from the Secretary of Labor and give it to the Office of Federal Procurement Policy.

Finally, in 1978, the Business Roundtable announced in Coming to Grips with Some Major Problems in the Construction Industry its strategy to end Davis-Bacon at both the state and national levels once and for all.  While calling ultimately for the repeal of Davis-Bacon, it recommended a number of legislative and administrative changes to chip away at the effectiveness of the Act.

The last thing I want to give you is an outline of the 1979 assault on the wage protective statutes and tell you that down to the last detail, the 1979 war on wages has been lifted right out of the Business Roundtable’s Coming to Grips pamphlet.  What are we facing in 1979?  Here is the list.

1.         Three bills are pending before the Congress to outright repeal Davis-Bacon (introduced by Hatch, Hagedorn and Erlenbor

2.         One bill is pending to eliminate Davis-Bacon protections in twelve related housing statutes (introduced by Tower).

3.         Tower has promised to systematically introduce legislation to eliminate the Davis-Bacon protections in all of the eighty related federal statutes, with his next target being in the area of federal assisted transportation.

4.         The “little” Davis-Bacon Act in Florida has been repealed.  Repeal measures or measures to seriously cripple the prevailing wage acts are pending in at least eleven other states.  The ABC is circulating a master plan to all state chapters, telling them how to repeal the state laws.

5.         The Office of Federal Procurement Policy (OFPP) is continuing to attempt to wrest authority for the administration of Davis-Bacon away from the Secretary of Labor.  A bill (§ 5) is pending in the Congress which would fortify the OFPP’s authority to do so.

6.         The GAO issued a report on April 27, 1979, which called for the repeal of Davis-Bacon and concluded that the entire concept of a prevailing wage statute is unsupportable and inflationary.

7.         An Inter-Agency Task Force composed of the OMB, OFPP, Defense, NASA and other large contracting agencies is reviewing the administration of all of the prevailing wage statutes including the Davis-Bacon Act and the Service Contract Act.  It has recommended among other things, the elimination of the “30 percent rule,” raising the $2000 coverage threshold, and the transfer of reviewing authority over the prevailing wage statutes to the OMB.

8.         There is a widespread campaign in the media to paint the Davis-Bacon Act as an inflationary antique left over from the New Deal.  The Chicago Tribune and the New York Times have called for the repeal of Davis-Bacon.

9.         A number of allegedly “objective” academic studies have been released by universities, which are widely publicized and which purport to establish that Davis-Bacon is inflationary and should be repealed.

It is clear, therefore, that the Business Roundtable intends to bring its total resources to bear in a multi-faceted attack on Davis-Bacon and, indeed, upon all of the wage protective statutes, in 1979.  The combined assets of the Roundtable members, as I have told you, approaches ¾ of a trillion dollars and it seems fair to say that no greater concentration of economic power has ever been placed in the hands of one centralized group in this nation’s political history.  It is the ability of the Business Roundtable to bring this enormous power to bear upon the political and legislative processes, along with its ability to influence and control local users of construction as well as the contractors and contractor associations that now poses such an urgent threat to Davis-Bacon and the other prevailing wage statutes.

In closing, I would like to reiterate to you my profound concern that the Business Roundtable represents a threat not just to the building trades unions but to the trade union movement as a whole.  After all, history teaches us that the building trades founded the American labor movement and is still its foundation today.  If corporate America can undo the hard-won gains of this country’s constructions, I deeply fear that the ultimate target will be the entire trade union movement and the working men and women it has protected for so long.

J. C. Turner, Former General President

International Union of

Operating Engineers, AFL-CIO

 

 

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