 Aloha, and welcome to the ThinkTech Hawaii Broadcasting Network. This is Hawaii Together. I'm Joe Kent, Executive Vice President of the Grassroot Institute of Hawaii, filling in for Dr. Kay Lee Akina, who's the President of the Grassroot Institute. And today we're talking about a new proposal that passed at the Honolulu City Council that would prevent non-union contractors from getting government projects over two million dollars. We're here to talk with Jonathan Young, he's the President of Associated Builders and Contractors. Welcome. How are you? Well, we have this new proposal, this new policy plan to basically ice out non-union contractors. Now you're a non-union contractor, is that correct? I'm the President of the Association that handles the majority of the contractors in the state of Hawaii that are non-union, we also call them merit shop. And it's basically the proposal, can you tell us what the proposal would do, exactly? The proposal would cut out anyone that's not in the union or does not become signatory to the union for two million dollars and above for government contracts, for city projects. For city projects. That's the big issue, the city projects. Correct. And how many people are we talking about? Well there are roughly 6,700 licensed contractors in the state of Hawaii of which 4,500, two-thirds of them according to surveys and this independent surveys, 66.2% of the contractors in the state are non-union. So this... That equates out to 4,500 contractors. This ices out more than half of the contractors in Honolulu then. So while you were kind of in the middle of the battle and the fights, what are people saying about this? Number one, it's not a good bill. It's a... I hate to bring up the Obamacare but it's a shell bill that was passed. Let's pass it so we can see what we can put in it. One of the highly irregular things that happened at city council that day was they passed a floor bill. It was done, changed the day before to amend some of the concerns that corporate council had. And then literally an hour before the council met, they did another change. We did not get a chance to see it. It's called a floor draft. Sure. So there was some complications in drafting the bill and getting it to the floor and transparency questions. And while there's a lot of shuffling around with this policy, but at the end of the day it did pass at the Honolulu council. And but what were some of the testifiers saying about it? A lot of testifiers were saying the same thing. They are breaking state law. That's our main big concern. What law specifically? So now we're talking, this is a council, a Honolulu council bill, but you're saying it's breaking state law somehow. Is that right? Correct. As we discussed earlier, when Hawaii turned over, we're going to do a history lesson here is Kamehameha ran all the island. So the state runs all the islands. They wanted to govern the same way that Kamehameha did. So the state controls the cities. The state has total jurisdiction over the cities. They can pass whatever they want for their local people, but they still need to be fallen in line with Kamehameha or the state rules. So one of the violations that they did, and this is outright, and even the council members brought it up, is we're concerned that this violates House Resolution 103D, which is the state procurement law. The procurement law, which governs how you can bid and get contracts and all of that. The council law, or excuse me, the proposal, is you're saying out of step with that state procurement code? Correct. And we tried to tell the council, and so did everyone else, that LAW, follow the law. You want this to pass, you need to get it done through the state. Get it done through the state, and then revisit it to the city and council, by the city and county of Honolulu. Let's talk about the bill's intent or the proposal's intent. On the surface, you know, we want good quality work. If we have a government contract, if we're building a government project, we want high quality workers to do the job. So doesn't that, doesn't this proposal accomplish that then, or? No. No. If you put a non-union, this is what we brought up in the very beginning, when you work for a non-union contractor, you work at the pace of the best worker. When you work at a union company, you work at the pace of the slowest worker, because if you don't do that, you become a goalbuster. I used to work for a union company, a resource for Hore and Tel. And I was told, hey, slow down, you're working too fast. Excuse me? You're working too fast. I just work. I've always worked. I work at my pace as best as I can, as fast as I can, and the best job I can. When I get told to slow down, you're working too fast, you're making Vince look bad. It's like, why? I don't understand. Well, see, now I was a public government worker. I was a public school teacher, and I was in the union. And there are a lot of union members and unions who do very good work, though, as well. I mean, wouldn't she say that as well? Yeah. We're not putting them all down, but I'm just saying that there are processes that non-union companies do to get the job done efficiently at a lower cost and at a quicker pace. So what is the problem then with cutting off some of the bidders then? If you cut off, we'll do a simple analogy. You want to run this show, or you want to go ahead and put out feelers to 10 people, right? OK, I want to run this Hawaii Together show. You're saying, OK. So you want to run this show, and you want to get 10 companies to bid for doing the distribution of this show. If you eliminate two-thirds of those, so we'll just round it off to seven of them. You have three people bidding on it. What happens to your prices? They might be higher, or they might be lower, but I have less options to choose from. Now of those three, they're all from the same company. Oh, OK. One's an offshoot, like let's use spectrum, internet spectrum, wireless and spectrum business. They're all from spectrum, as per se. But you only have those three bidding now, all from one house. What happens to your price? The fewer options equals fewer choices. And your choices might equal higher prices or different types of work there. So, well, let me talk about the taxpayer, though, because again, we're talking about only government, excuse me, council, city council projects. How does this affect the taxpayer? Taxpayer in the long run eventually gets the short stick. A very good example, and this is what they keep citing is how great the rail is. And we all know how great that's doing on budget and on time. Sure, right. I don't know what the budget is, and we don't know what their timeline is. So that's just the example we use, and they like to say that as their glowing example. And it's the city council. It's the city doing procurement, which they shouldn't have. And we'll bring that up later. So the rail is a PLA, a project labor agreement, meaning that we can only use certain types of labor. We can only use signatory labor unions. Signatory labor unions. So do you think then that if the rail had been open to more bidders on the project that the cost might have been lower? Costs would definitely be lower. A little history lesson. You know he vented PLAs? PLAs, Project Labor Agreement. Who invented them? No, I don't know. Our great former senator, Daniel Enoy. It was invented by him to prevent strike. There'll be no work stoppage. Let me ask you this question. When's the last time you heard of a non-union contractor striking? Well, so, but that seems to make sense, though, if we have some policy, you know, you've got union striking and, you know, that slows things down. So wouldn't you think then that these community workforce agreements or project labor agreements, whatever you want to call them, don't you think that that would help the government be more efficient in this matter? Again, when's the last time a non-union contractor went on strike? They are fired. You're fired from the project and a new person takes over. The only people that strike are unions. Right. And the only people that don't cross lines because we go through a second gate, which is under federal law, we walk through the second gate. They won't even honor the second gate. They will not cross the second gate. For a non-union contractor, if you're mad at the employer, though, and you feel the employer is treating you unfairly or something, then isn't there no recourse, though? Because, you know, if you're with a union, then there's some kind of recourse you can strike. And but with a non-union, you're kind of, you don't have that option. So, you know, just playing devil's advocate, doesn't that help the case for this policy? Every single worker protection is covered by federal law. We say that W word, which is going on right now, and the presidency is whistleblower. You got an issue, you bring it to OSHA, you bring it to your boss, you bring it to the procurement officer, you bring it to the state. They're all covered. If your employer, or any employer, is treating you improperly, doesn't matter union or non-union, you have those protections or layers of protection there for you. Right. So, the protections are there whether you have a union or not. And well, with project labor agreements or community workforce agreements, many states have tried them and some states are actually getting rid of them. We have, this past March, Kentucky became the 25th state to welcome all qualified bidders to these types of projects. And since then, studies have shown that these policies actually tend to increase the cost of government projects. Is that right? That's correct. We've actually had, and I've given you some independent studies. This is not done by ABC. This is independent studies, not paid for. These are just done by think tanks that want to figure out what's going on with dollars, with the taxpayer dollars. It's shown to increase costs by anywhere from 12% to 15% on every project. Again, you lower the pool. Now, why is that? Because, yes, you lower your pool, but don't we have prevailing wages? I mean, the Horlulu City Council, Horlulu has to pay prevailing wages. In other words, they have a wage schedule for their contracted workers, whether they're a union or not union. So doesn't that mean that the price would be the same? Again, it's the work processes that are done. When you do, when you work for a company, you become part of the family. Your family teaches you a certain way to cook beef stew. Sure, yeah. If I came in and tried to cook beef stew with my own recipe, totally against your recipe, what would end up be more cost? Because I use nothing but fine wine, instead of just cheap $2 chuck, right? And there, and I use specific potatoes versus yours. I use what I use versus what you use. So the processes to get to the end result are different. But just because you're paid the same doesn't mean you do things the same way. And sometimes, actually, sometimes the higher bid could, from the taxpayer standpoint, the higher bid could actually be the better bid because it's perhaps a higher quality. So then, so then to your case, it's not always that the lower the project, the better. Sometimes a higher project works. There are instances where contractors have been disqualified. And one of the great benefits of being an ABC member and working with our training program is our education is multi-pronged. If you're a carpenter, you're also a mason. Our carpenter apprenticeship program teaches you masonry, teaches you light equipment handling. And light equipment goes all the way up to mini-class. Right. So we teach you all of that. We teach you how to put down steel. Well, doesn't the union do that, too? They teach you all kind of different trades. Correct. But when you do through the union, you must become signatory to the union for steel workers. You must become signatory to the mason's union or mason. You must become signatory to the operator's engineers. A great example is solar. Well, say, why don't I get back to that example in a minute. We're talking with Jonathan Young about a policy that ices out a certain group of workers in Honolulu. We'll be right back. Hi, guys. I'm your host, Lillian Cumick, from Lillian's Vegan World. I come to you live every second Friday from 3 p.m. And this is the show where I talk about the plant-based lifestyle and veganism. So we go through recipes, some upcoming events, information about health, regarding your health, and just some ideas on how you can have a better lifestyle, eat healthier, and have fun at the same time. So do join me. I look forward to seeing you. And aloha. Hey, aloha, everyone, and welcome to the Think Tech Hawaii studio. My name is Andrew Lanning. I'm the host of Pretty Matters Hawaii. We air here every Tuesday at 10 a.m. Hawaii time, trying to bring you issues about security that you may not know, issues that can protect your family, protect yourself, protect our community, protect our companies, the folks we work with. Please join us. And I hope you can maybe get a little different perspective on how to live a little safer. Aloha. Welcome back to Hawaii Together on the Think Tech Hawaii Broadcasting Network. I'm Joe Kent, filling in for Kaili Iakina with the Grassroot Institute of Hawaii. And we're talking about a policy that cuts out a certain group of workers from bidding and working on government projects. That policy is called Project Labor Agreements. And Jonathan Young is a non-union contractor, and you were just talking about education, the role of education in contracting. And you started to tell a story, an example about solar. So we'll use solar. That's actually a byproduct of the separate trades. So we'll trade the solar for your ceiling fan. You bought a ceiling fan from Home Depot, Lowe's, whatever. You've installed it, a carpenter installs that. Sure. You know the little clips that go together? Uh-huh, yeah. That's from the hot and all that, that you can do yourself. Under in the solar industry, you must bring in, the plumbers can install that because it runs through the hot water here. Oh, there's certain rules that you have to bring certain contractors for certain jobs and only a certain contractor can put that together. Okay. You've heard the phrase, not my job. Not my job. That's the one. So I cannot put that clip together until the licensed electrician comes. I see. And plug that in. So that's why it's good as a worker, from a worker standpoint, to learn as much as you can and get licensed in as much as you can so you can be as versatile as possible. That's our training. Our training provides you multi-pronged. I see. And the big issue that was brought up was misclassification. There's no misclassification. Our work processes under our training cover what they're bringing up. Right. So we don't have plumbers doing carpentry work. But it also helps with the efficiency of the project because you might be able to get a project done better, faster, cheaper if you have that versatility. That one hour that you say, waiting for the guy to come in is the money you say. So education matters. And well, I want to talk a little bit about some of the people this affects. Now we're talking non-union contractors in Hawaii. Some of them are big, but a lot of them are small business owners. Is that right? Majority of our contractors that are, we call them members, are paying members that actually belong to the training programs. I would say in a rough number, 50% of them make under a million dollars. Total. That's profit. I mean, that's total gross sales. 25% of them fall in the under $5 million range. There are very few that fall above $10 million. I can name them off in that many fingers. Sure, sure. I see. It's the mom and pops that get hurt because you crush them. You put them out of business because they may not bid on a city project. And it'll affect them because the people that would bid on the city project are now coming after their job. Oh, I see. So, well, see, someone might say that according to the policy that passed at the Honolulu Council, it's only two projects, government projects, over $2 million. So for those small mom and pop shops, they wouldn't be affected by that $2 million, some might say, right? That's what they're saying. So again, like I said, if you pass that policy at $2 million, the people that do the $2 million to $3 million city project, and there's a lot of them, they're going to push their way down. Aha. And the mom and pops, the one-man, two-man shops, are going to get pushed out of business because they cannot compete with the more efficient companies that have 10 people working for them. Sure. Okay. But we're supposed to be for competition. I mean, the whole issue is competition. So we want more competition and may the best company or may the best person win here. So, but also for the state, the state has a level at about a high level. They already have this policy, don't they? I mean, can you talk about that? 2011, Abercrombie administration passed a PLA law. It was a gentleman's agreement between ABC, GC, and BIA. It's the alphabet soup of contractors. It's a $25 million threshold. So the first question we asked the city council is, what's broken? You want to set a PLA? Knock yourself out? Do it the same as the state? We got no issues. Set it at $25 million? We have no issues at $25 million. Okay. Because that wouldn't affect the small mom and pops. We don't do that. We don't, majority, 99% of our contractors don't do that. Sure. We know that we can't. It's not our forte. Right. We do great on the smaller projects. We do great on the two-month projects. We do great on the three-month projects. We don't do very well on the two, three years or the 20 years now on the rail. We don't do great on those big projects. We do great on the smaller projects. Can you describe some of the smaller projects that we're talking about here that the contractors might do for the state? I mean, are we talking about roads or are we talking about buildings or what kind of things are we talking about? Well, we don't, we still don't have a floor copy from the bill 37 that was, like I said, passed out that morning, which again was highly regular because we had no, no previous. So you're not sure exactly what the bill applies to? We're not even sure what's in it. They're not even sure what's in it. Okay. We passed, they passed the bill without knowing the guts of it. We're going to fill it in later. There's a lot of shuffling around towards the end there. So our last understanding was non-emergency contract. Aha. I see. So who designates the non-emergency contract? Right. And then they went through an entire list of fire stations, police stations, when the last time you built a police station, when the last time you built a fire station. Right. They went through an entire list and we're like, we haven't even seen these and yet you're trying to pass this bill. What is this bill, how does this bill or policy affect the economy? That's a very good question. What is it going to do with the economy? It's going to cause stagnation and because of lack of competition. It's the bottom line. It's going to push the taxpayers' money up. You're going to have to pay more for your projects and it's going to push smaller businesses out of business. Every large business here started as a small business and they took the risk and expanded. No big business just went, boom, I'm here overnight. You always started from the bottom, work your way up. When you crush the bottom, you crush your foundation of competition, you get top heavy in the top of that way. Sure. What if though you had the opportunity to have some kind of rule to keep competitors out? I mean, wouldn't you before that? That's already in, they mentioned that 80% rule. Back when 2009, when the big issue, local jobs for local people, that was passed the Senate Bill SB 2840 SD2 HD1, which became law, also known as Act 68, where the law requires the contractor's workforce to be comprised of 80% or more of Hawaii residents. So there's already a state law that says that you have to have some Hawaii residents then. So they already have that. Yeah, we have that. So they brought up, like I said, we talked about it earlier, they brought up that, oh, you brought in people from Kentucky and Mississippi to do the Alloa Stadium. Do you know the reason, and people don't know this reason, and I'll give you the exact reason. The state required a certain type of coding to be applied. In order for the coding to be applied and to have warranty, it had to be done by a licensed and trained person from the factory. In the state of Hawaii, in California, there were nobody. It was specific type of coding that was only done in Kentucky and I believe Wisconsin where the guy came from. Okay, now you're talking about the stadium. The stadium. The stadium had to have a very specific type of work done. Yes. And then what? The coding required that to be put on by a trained factory person. So the contractor flew in, the two people, housed them, paid for their airfare, paid for their services, paid for their contracting, paid for their per diem, paid for everything, and still got the jobs on cheaper. This is a non-union contractor. Okay, so they flew in some from the mainland, they did it better, faster, cheaper, and so there's nothing wrong with sometimes flying people in and getting the help and expertise that we need. Sometimes, when you make a big issue about it, and it fits your agenda at that very time, when 90% of your workforce is out of business, it's not working, it's sitting on the bench. Because of the slowdown, you pick an issue that you think you're going to rally the troops around. We ended up passing a law to do that. But the law only applies when it fits you because if we go to Cacaaco and you go, I'm going to just say it right now, you go to Hawaii Project and you pull up the certified payroll that was done for that project, you'll see Italians, you'll see people from, not from Hawaii. You'll see a lot of people, foreigners, that were brought in to finish the towel work. Which is fine, we want all types of people working on all types of projects. But restricting that, what's the problem with restricting that then? Restricting that restricts the proper people from coming in that are certified to do the work. So at the end of the day, this is going to affect government projects like perhaps roads, ridges, buildings, and it's going to mean that, it's going to mean what? It's going to mean more cost. It's going to mean slower projects. It's going to mean, let's go back to the concerns about the bill. We've even had union contractors who don't want this bill because they're going to be taking workers from the bench that are earmarked for other union projects to go work on those projects. You're saying that some union contractors are actually against this policy? Yes. A quick, easy example is union companies do not want to work on a three-week project. It's too much of a pain. Oh, it's too manini. Yes, manini. They want to do a two-three-year project where I can get crews in, big people in, do it all, you know? There's a gap in a ways that isn't being met if we have these types of agreements that... So again, you push down the small contractors and the mom and pops, the under two million dollars, you push down this project down to here. People that are here are taking from the people up here. Again, the question, what was broken with the way the city was doing business? Nothing was broken. Well, after this, though, things might be broken. We're not sure that the bill is still kind of waiting on the governor, excuse me, the mayor's desk right now. So we're not sure what's going to happen. And if it does go through, then what will Hawaii look like and how will it look different? Hawaii will be forever changed. We don't see that happening immediately. One of the issues we have is, again, the city does not have jurisdiction over procurement. That's the state law. They have to take it to the state. So there's legal challenges and questions. The mayor's chief of staff stated that at the council. In a roundabout way, we knew exactly what the mayor's chief of staff was saying. Corporate council and the mayor have legal, severe legal concerns regarding the passing of this bill. Because the bill or policy is out of step with state law. Yes. So they were hinting at deferred, which we thought was going to deferred. And then Mr. Anderson called for a vote. And it went through. It passed 7 to 2, or in other words, 5 to 4 with two reservations. Well, we'll keep on watching this. And so thankful for your concerns and your questions about this. And you're listening to or watching the Grass Street Institute of Hawaii together. I'm Joe Kent. We were talking with Jonathan Young, president of Associated Builders and Contractors. And thank you so much for watching. We'll see you next time.