President’s Corner

As winter weather slows work across our jurisdiction, this is the time that we set and implement our goals for the year ahead. In 2019, we will negotiate new agreements, work to enhance members’ wages and benefits, drive public policies that support workers, and fight back against politicians and special interests that hope to harm us. Each year brings a host of challenges, but we are always eager to meet them, and I am pleased to tell you today that the state of our union is as strong as I’ve ever seen it.

In Illinois, we are starting this year free from the shadow of Bruce Rauner, the failed governor who halted any progress on infrastructure investment in Illinois and plotted attacks on working families. It is a new day in Illinois, and Governor J.B. Pritzker spent his first full day in office living up to the commitments he made to union members during his campaign. He signed a bill we supported that will strengthen Illinois’ prevailing wage law and prevent any rogue governor from ever being able to manipulate prevailing wages in the way that Bruce Rauner did. He also passed an executive order supporting project labor agreements in state agencies, which is helpful to members and signatory contractors across Illinois.

We also come into the new year with renewed hope for state infrastructure funding. For the first time in four years, there is a path to a transportation bill that will invest in state roads and bridges that sat crumbling and neglected across the state. This would be a boon to an existing workload that has already kept our out-of-work lists low throughout the season. In addition, the Illinois Tollway has finally settled its land dispute with the Canadian National Railroad, which will allow major lettings to move forward on construction of Interstate 490, the “ring road” that will bypass O’Hare Airport to the west and connect Interstates 90 and 294 with the Elgin O’Hare Expressway. Add to that the rollout of the full reconstruction of Interstate 294 from Rosemont to Oak Lawn and we may find ourselves with a roadwork outlook that rivals anything we’ve seen in our history.

Indiana’s transportation funding plan is also paying dividends, with everything from Interstates to local roads under construction, and state leaders committing additional funds on top of their transportation revenue to modernize as many miles of road as possible. Members in Indiana are coming off a great year on the roads, in the mills, and on building construction projects, and all indications are that 2019 will be a continuation of that.

The political efforts of Financial Secretary Dave Fagan, Local 150 staff members, and the Indiana-Illinois-Iowa Foundation for Fair Contracting have also brought Responsible Bidder Ordinances (RBOs) to more than 40 municipalities across Indiana. RBOs have proven to be a powerful tool in protecting skilled construction workers and their wages since the repeal of Indiana’s prevailing wage law. Their effectiveness has drawn attention from anti-worker politicians, who are mounting an effort to ban local governments from passing RBOs. This is an affront to local communities’ freedom to make their own decisions, and we will gladly take up this fight on behalf of every union member whose wages have been protected by RBOs.

At the end of 2018, our work hours had surpassed those of 2017 by more than five percent, and have us en route to our most hours since 2008. The importance of this is obvious to everyone who lived through the Great Recession, when the average work hours were approximately 20 percent lower than today. The other reason that strong hours are important is for the health of our various fringe benefit funds. For example, work hours are one of the key actuarial assumptions that determine the health of the Pension Fund, and we are on track to exceed our conservative actuarial projection of work hours by approximately 10 percent this year. Anytime we can exceed our hourly goals, it builds upon investment gains, or offsets investment losses.

There is quite a bit to report regarding the Pension Fund in this edition. You’ll remember that in September 2017, the members at a Special General Membership Meeting in Rosemont voted in support of a plan to infuse the Pension Fund with $290 million of existing benefit dollars to expedite the fund’s return to the “green zone.” Due to strong market returns in 2017 and in the first half of 2018, we were poised to accomplish our goals after only $200 million was transferred, and so we directed the remaining funds into a separate reserve account and invested it in stable return vehicles that are not as volatile as the stock market. The infusion of this $200 million boosted our funding percentage by five percentage points, and at the end of the last fiscal year, our fund was poised to be green as long as we earned more than 0.4 percent on our investments this year.

Based on the reports from our actuaries and fund consultants, our Pension Fund lost three percent on investments through the end of December. The wild swings of the stock market in the second half of 2018, driven by the trade war and almost unexplainable political volatility, wiped out the gains from the earlier part of the year. Our Pension Fund’s year doesn’t end until March 31, so we have time to recover those losses, but the tone of things in Washington to start the year hasn’t inspired a lot of confidence in me.

Again, if a fund’s projections are based on an annual return of seven-and-a-half percent, and our investment returns are negative three percent, we haven’t lost three percent. We’ve lost ten-and-a-half percent. The problem with the current state of defined benefit pension funds is that we have to predict the stock market and guarantee returns instead of responding to it, which puts us on the roller coaster that we’ve all become too familiar with. We are looking into ways to better insulate our fund from the unpredictable whims of the stock market, and we will report on them later this year.

If we don’t hit our projection on investment returns, there is still an actuarial lever that we can pull to reset the value of our assets and go green, but it is nothing more than a gimmick that leaves us more vulnerable to the market in years to come. On the long road that we’ve taken to bring our fund back to green, we’ve never cut corners or played politics with the Pension Fund, and now that we are on the one-yard-line, we are not going to start now. We’ll be watching closely between now and the end of March in the hope that the markets recover toward the end of our fiscal year and deliver us safely into the “green zone.”

The only force with more power to interfere with our pension than the stock market is Congress, as they reminded us last November. When a Congressional committee began to consider so-called reform options last year that would have devastated our Pension Fund overnight, our members quickly went into action and thankfully, the committee was unable to complete its work. Had it adopted one of its most draconian proposals – capping investment return projections at six-and-a-half percent – the result for our Pension Fund would have been an immediate drop to 57 percent funding, deep in the “red zone” where we would be required to cut benefits for both future and current retirees. We dodged this bullet, but fully expect that they will be back at it before long with more half-baked ideas that we will fight with everything we’ve got as a union.

Finally, I want to make sure that every Local 150 member is aware that one of the most beloved parts of our heritage – Scabby the Rat – is under attack from the National Labor Relations Board (NLRB). At the direction of the NLRB General Counsel Peter Robb, appointed by Donald Trump, the board has targeted Scabby for extinction. The goal is to designate Scabby as a coercive element and ban him – along with the banners we use – from pickets and demonstrations entirely. As many of you know, Scabby was born here at Local 150 in 1989. We raised him, perfected him, busted him out of jail on multiple occasions and have defended him in court more than anyone else.

Federal courts and the NLRB itself have previously ruled that Scabby is protected by the First Amendment and is merely a symbol, an exercise of free speech. And now that a former union-busting lawyer atop the NLRB doesn’t like the look of Scabby, he thinks he can exterminate him? Sorry, brother, but it won’t be that easy. We are fighting at the NLRB and in federal court right now, and I believe that the long history of decisions protecting Scabby will carry the day.

The year ahead is full of hope and optimism. It does not come without challenges, but we’ve never shied away from a fight, and we won’t start now.

United We Stand, Divided We Fall.