As the construction industry begins to slowly recover from major shutdowns earlier this year due to the COVID-19 pandemic, residential construction appears to be a major contributor to this recovery. This should not necessarily come as a surprise, however, considering the high demand for single-family homes, low interest rates, and the increasing need for affordable housing. In fact, according to a 2019 report from the Minnesota Housing Finance Agency, there is a shortage of affordable housing for about 65,000 extremely low-income households in Minnesota. This number is now likely higher due to the economic impact of the pandemic. While the construction of affordable housing certainly creates jobs, the use of the Low Income Housing Tax Credit Program (LIHTC) as the primary tool for financing this needed development may actually depress construction standards and wages.

The LIHTC program is the largest federal housing program and is run by the Internal Revenue Service (IRS). Under the program developers who agree to develop or preserve affordable housing are allocated tax credits from the IRS, which are then essentially sold to investors who get a tax credit for ten years. There are two tax credit levels: a 9% tax credit program for investment projects that are generally extremely low income and supportive housing, and a 4% tax credit for all other affordable housing projects. The LIHTC program, therefore, works as a tool to induce private financing in the development of affordable housing.

As a tool for encouraging private investment, the LIHTC program serves as a backstop for private investors by providing security for their investments. Furthermore, while there are generally requirements for the length of time in which an affordable housing development must remain affordable – usually between 15 and 30 years – there is not a requirement of permanent affordability, unlike publicly financed and publicly owned housing that is generally permanently affordable. The LIHTC program therefore serves to offset near term capital inputs for the development of affordable housing, while still allowing for profits down the road after the affordability term expires.

The LIHTC program allows for private developers to take advantage of, and eventually profit off of a public need for housing, by keeping affordable housing construction within the private real estate market. This inherent problem has trickle down harms and consequences for construction standards and wages. Housing projects that are publicly owned and that receive direct public sector funding oftentimes carry numerous requirements that benefit the construction industry. These requirements may include workforce development initiatives, the purchase of American steel and materials, and prevailing wages. Privately financed housing projects, however, generally do not incorporate these requirements or have compliance structures in place to enforce them. Therefore, despite being the largest federal affordable housing program, the LIHTC program has few, if any, regulatory mechanisms that promote high standards and good wages in residential construction.

As the need for affordable housing continues to grow, residential construction is likely to increase as new projects emerge. While the LIHTC program certainly encourages near-term development, its lack of permanency and industry supportive requirements may have long-term negative effects for both tenants and workers. In order to meet both the demand for affordable housing and the need for high standards in residential construction, greater public sector financing and ownership is needed.

Gleaming amidst the piles of rubble that were once retail establishments and the boarded up facades of stores still standing on Lake Street in Minneapolis stood the Laborers Local 563 semi tractor trailer. More than a symbolic gesture, it brought the food and grilling equipment that the Minnesota Building Trades used to give relief to residents of that neighborhood. 

For seven days following the protests and destruction after the George Floyd tragedy, members of the trades served a hot dog lunch to anyone who wanted it. From Monday June 8 through Sunday June 14, 11 a.m. – 2 p.m., members of the trades worked the grill and handed out a meal complete with chips and a bottle of water. They served in two different locations during the seven days on Lake Street. The first was in the parking lot of Target across from the Autozone car parts retailer across the street, a locale shown on CNN during the melee Friday night, May 29. The second was just down the street at the Salvation Army. 

While the Laborers supplied the fancy truck, all the trades supplied representatives to work and serve. “There hasn’t been a trade that hasn’t had someone working here,” remarked Carrie Robles of Laborers 563. “The people who’ve stopped through have been very appreciative. It’s given them a sense that we are in this together, that somebody cares. That they haven’t been forgotten about. And happy we are doing this. It’s a great feeling.”

Change and rebuilding often begin with kind gestures. Thanks, Building Trades.

The Minnesota Department of Labor and Industry recently announced nearly $320,000 in total back wages paid to 70 workers for Millennium Concrete on the massive Digi-Key expansion project in Thief River Falls, Mn. Millennium is from Coralville, Iowa, and substantially underbid several local contractors in order to win the contract. We now know that they tried to gain an unfair advantage at the expense of their employees by misclassifying the work they performed in order to pay the lowest possible wages. Through a coordinated investigation by FCF and the Building Trades, these violations were brought to light under strong legal enforcement. Prevailing wage requirements help ensure a strong public construction industry by leveling the playing field for all contractors and preventing the erosion of healthy wage and labor standards by unscrupulous contractors.

Keep Minnesota contractors competitive and preserve good careers in construction.  Notify FCF if you suspect unlawful bidding practices or wage theft.

As the weather begins to warm up and the snow begins to melt, another rite of spring begins in Minnesota — the shipping season starts on the Great Lakes. The giant ships locked in Duluth-Superior Harbor during the winter months return to the lake, passing under one of the most iconic landmarks in the state: the Aerial Lift Bridge. 

Most of the ships are not new to those dedicated to tracking the ships that come and go. Known as “lakers,” the average ship is 40-50 years old with some older than that. And they are massive, ranging from two football fields in length (600-700 feet) to three football fields (1000 feet). In spite of their age, they are very efficient. A ship can move a ton of freight (whether its mining products like taconite from Northern Minnesota to agricultural ones such as corn and soybeans) over 600 miles on one gallon of fuel.

So how does a ship that’s so old with such heavy cargo keep working? They are well-maintained. The ships that come in Duluth-Superior Harbor are worked on by the boilermakers of Local 647 throughout the winter. They brave the cold conditions that occur even inside the ship (sometimes the temperature dips to minus 20) to make needed repairs. They do a wide variety of things, from replacing floors to repairing cargo holds and conveyor belts and even replacing engines. The boilermakers’ involvement doesn’t stop at the water’s edge. They often travel with a ship to its destination port, repairing and keeping its parts functioning. 

Rarely does a laker sink on the Great Lakes. (The last one was the SS Edmund Fitzgerald in 1975.) The reason is the professionalism of the crews and the trades people who keep the ship running: the boilermakers. Thanks to Local 647 for keeping freight flowing and for keeping these vessels in ship shape.

Construct Tomorrow finished its 2019-20 schedule after scheduling nine events across Minnesota, but doing just eight. “We had to cancel our Moorhead even in late March,” said Tim Bussse, Executive Director of Construct Tomorrow. “It was really disappointing because they did a lot of work. Given the situation with the governor’s restrictions on public gatherings due to COVID-19, there’s nothing we could do. We promised them we’d be back next year though!”

Construct Tomorrow will continue the career fairs into the future. Before the global pandemic interrupted everyday commerce, the events were on track to attract approximately 8,000 Minnesota high school students. When it comes to feedback from the events, Busse says students actions speak louder than words. With activities from all the different trades on hand (from pounding nails to working with wet cement), it’s easy to witness their curiosity from their involvement. The most direct feedback comes from teachers and school counselors, however. “More often than not they are pleasantly surprised at how engaged their students were at the event,” he said.

Construct Tomorrow measures success directly by the number of students who enroll in the trades after high school. “We don’t have specific numbers — which is something we have to work on — between Construct Tomorrow and the other events that recruit students into construction trades apprenticeship programs,” Busse said. “The numbers are going up, but we need to put it all together so there is that bright line between the two.”

Going forward, one change that may be coming to select events will be the addition of an evening session geared toward adults. In some markets, the demand for workers is so pronounced that finding people who can move into apprentice training programs right away is a priority. “High school students are playing for the long game, expanding their career horizons. The evening session would be to the general public. Ideally we’d like kids to come back at night with their parents, but it would mainly be geared for adults who want to do more. People who are underemployed, who want to switch careers,” Busse said.

For example, one market that’s a candidate for the evening session is Duluth. The city is amidst a $300(m) hospital building project along with highway construction projects in the works. Northern Minnesota is bustling with construction activity and needs workers who don’t merely tolerate winter weather, but embrace it. As Busse put it, “We are looking forward to next year, recruiting the next generation who want to work in the trades — and enjoy the benefits of being in the trades.”

Here are some reactions from four guidance counselors who attended Construct Tomorrow events with their students:

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During the first week in March the National Association of Women in Construction (NAWIC) mobilized its 118 U.S. chapters to recognize and laud the achievements of women in the building construction trades. The focus of Women in Construction Week is to highlight women as a visible component of the construction industry. Viable they are. The need for skilled construction workers is great and women are just as capable as men to do the job.  While women comprise just 2.6%, their numbers are growing.

The local NAWIC in the Twin Cities, NAWIC, had events all week beginning on Monday with a panel of Girl Scouts interested in construction careers hosted by Dunwoody College. On Friday there were closing ceremonies hosted by Ryan Companies and, on Saturday, another event at Dunwoody, YWCA Girlpower 2020, which introduces girls in grades 6-10 to the construction trades by working on home projects. 

For more information, check out the chapter’s website.

The country’s late night TV entertainment has its Jimmys (Fallon and Kimmel) and a Conan (O’Brien). But, he Minnesota Building Trades has its Larry. Larry Gilbertson, the president of the Apprenticeship Coordinators Association, once again emceed the 14^th Annual Injured Apprentice Dinner at Mancini’s Restaurant Monday night, Feb. 3. The annual affair raises money for the injured apprentices fund. While the mission is serious, the accompanying program always has some humor injected into it when the Gilbertson slips into stand up comedy mode: “That reminds me of a joke I heard….”

“We like to think of ourselves as a family, maybe a big, dysfunctional family, but a family nonetheless’” Gilbertson joked afterwards. “And so we need to take care of our younger brothers and sisters, especially if they are just starting out in the trades. If they are apprentices in their first couple of years, they don’t have a nest egg built up yet like some of the journeyworkers would.”

If an apprentice gets h

urt and they are off the job for more than 30 days, he or she can get a check to be used for wherever they need it. The money can be used to help pay the bills, pay the rent; it’s something to get them over the hump until they are back to work again.

Last year the fund paid out 19-20 checks to members of 12 different trades most of whom were injured off the job and thus ineligible for worker’s comp, according to Gilbertson. “Especially when you are coming into the Holiday Season and any other time when you need to have that extra cash flow, a check for $595 can really help those young folks out.”

“Off the job we are all outdoors people/folks. We’re out on snowmobilers, four wheelers, motorcycles. Sometimes those checks are going to someone who was injured in a vehicle accident,” Gilbertson explained.

“We get a great commitment from all the trades. All day long the people who are here tonight – the coordinators, the instructors, the business agents, the business managers – they work all day long helping out our apprentices yet still make time on a Monday night to help them out even more.”

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When it was announced the Trades Women Build Nations Conference was coming to the Twin Cities, Minneapolis Building Trades Director of Marketing & Public Relations Jenny Winklaaar suggested one speaker she thought they should get — the only octogenarian in the United States so renown she has her own hip-hop nickname, the Notorious RBG, Supreme Court Justice Ruth Bader Ginsburg.

After submitting a formal request through a national association of lawyers (which went nowhere), Winklaar did her own research and called the United States Supreme Court. She selected the “Clerk of Court” option from the menu. The phone was accidentally answered by someone trying to dial out who hadn’t listened for the dial tone first. Winklaar said, “Hello.” A voice on the other end answered her back: “Hello… Who is this?” Winklaar introduced herself and told The Voice on the other end of the phone she wondered how one could request a Supreme Court justice to speak at an event. “… What?!” The Voice replied.

Winklaar explained a women’s conference was coming to Minneapolis, Minnesota, and they’d like Justice Ginsburg to speak at the event. The Voice put her on hold, but returned two minutes later with another person conferenced into the call. That led to another round on hold with yet a third person joining the conference call who said, “I’d like you to say your name; I’d like you to spell your name, and I’d like to give me the address from which you’re calling.” About that time Winklaar wondered if the FBI wasn’t on their way to detain her.

Eventually she was put through to the assistant to Justice Ginsburg who listened to her request and invited her to submit it via a special email address. Within 48 hours after sending the email, she got a personal response from RBG. With the Supreme Court starting their session, she wrote, she wouldn’t be able to attend in person. In lieu of that, she offered to do a special video address for the opening of the conference.

Looking back, Winklaar thought the women at the event “were really encouraged that RBG took time out of her schedule to encourage them.”

Vicki O’Leary, Chairwoman of North America’s Building Trades Unions (NABTU) Tradeswomen’s Committee, was standing in the back of the room waiting to be introduced as the next speaker when Ginburg’s video played for the crowd. “The young apprentices had tears in their eyes,” O’Leary recalls. “It was incredible to see how young women were made to feel like they had that sort of support.”

On Saturday September 21st Insulators Local 34 held their annual RibFest.  Young and old alike attended.  The food was exceptional.  There were several Corn Hole Courts (Corn Hole is a bean bag toss game) , music, and several vendors that encouraged socializing after a great meal.  With the huge tent, even the rain was not a factor. 

I was honored to be a judge and had to suffer through sampling all of the ribs entered into the rib contest.  Click the photo gallery below to see some photos of the event.  Thank you Local 34 for your generosity and exceptional hospitality. 

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Construct Tomorrow took its show to Northern Minnesota, hosting events in Hinckley at Grand Casino and for two days in Duluth at the Duluth Entertainment Convention Center. Construct Tomorrow hosted nine events, starting in Eveleth in October and ending with one at Minneapolis Cooper High School in early March. The Duluth events hosted 1,000 students from 30 schools and the Hinckley had 700 from 18 schools across that region of Minnesota.

Both venues were filled with demonstration stations where students could experiment with the tools of the different trades. Laying brick, mixing concrete, pounding nails, walking a steel beam, pulling wire with electricians — all hands on experiences allowing them to try their hand at a skilled trade. Students could practice hand-eye skills used in welding and running a backhoe via computer simulations, too. Moreover, they were able to speak directly with a union’s apprenticeship coordinator and educate themselves about the opportunities in the trades. “We tell them how much money we make, how much we put into our benefits and retirement and, basically, give them the facts about this career,” said Andrew Richmond, co-chair for Construct Tomorrow and apprenticeship coordinator for Roofers Local 96.

“Our mission with Construct Tomorrow is to get involved with the students and let them know there are other options than just going to college. They can make really good money in the different trades with benefits and the opportunity to retire someday. Schools are pushing the two or four-year programs to students and they don’t realize school isn’t for everybody,” Richmond explained.

“What’s really awesome is I take students to all kinds of college tours all over the state and this one has generated more excitement and more enthusiasm for my students and their parents than any other event that I had planned for them this year’” said Sarah Larson, academic advisor for the Cass Lake-Bena Schools who brought two van loads full of students to the Construct Tomorrow event in Hinckley. “Most of them are not familiar with the apprenticeship programs, with the training and the different job opportunities that are out there for them and this is hands on. A lot of my students that I brought down are hands on learners. They want to dig in; they want to get dirty; they want to look at the work at the end of the day and say, ‘Man, I made that’ and have that sort of pride.”

Tricia Neubarth, a guidance counselor at Harbor City International School, a charter school in Duluth, said, “I’ve got kids doing postsecondary who really aren’t sure what they want to do. Got kids here who never even touched a hammer and they are doing phenomenal or they’ve been able to walk a four-inch steel beam. It’s a great opportunity, I think, for kids to see what is out there and not just the traditional path I think a lot of people think they need to go.”

The goal of Construct Tomorrow is to attract high school students into apprentice programs and then full-fledged trades workers. The early returns are promising. Checking in at the various booths, Neubarth said she noticed the reactions of some of her students: “… and they’re like, ‘Oh, yeah, now I know this is for sure what I want to do!’”

A recent Channel 5 Eyewitness News story highlighted wage theft, employee trafficking, and employee abuse by American Contractors and Associates LLC.  These practices violate the Minnesota Wage Theft Law.  The Wage Theft Law is applicable to publicly funded and privately funded projects.   American Contractors is owned and operated by Ricardo Batres.   

In addition, American Contractors and Associates, LLC has been sighted at least twice in the past with Minnesota Department of Labor violations. Since 2018 Batres has been in violation of the Minnesota Responsible Contractor Law which prohibits his company from working on public projects for a three-year period.  The specific orders from MnDLI can be viewed using the links below.

One has to question why the general contractors and contractors that are hiring subcontractors are not vetting them to see if they are responsible subcontractors?

Click here to see the 1st Channel 5 News Story.

Click here to see the latest Channel 5 Story:  Batres Pleads Guilty of Wage Theft.

Click here to see the Licensing Order.  Click here to see the Administrative Order.