They’ve Lost Touch With Reality Already? - Washington Insider
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They’ve Lost Touch With Reality Already?

By Christian Klein

Article Date: 02-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.

Rookie senators introduced health care amendment that explicitly discriminates against the construction industry.

You’d think that two of the most recently-elected U.S. senators would be more in touch with what’s happening in the real world than their longer-serving peers. You’d be wrong.
That was the lesson we learned in late December when Senators Jeff Merkley (D-OR) and Al Franken (D-MN), both of whom took office in 2009, got a last-minute amendment added to the Senate health care reform bill that singled out the construction industry for unprecedented discrimination.
Both the House and Senate health care bills require employers to provide a basic level of health insurance coverage to employees, but both bills exempt very small companies from the mandate. The House bill exempts businesses with a payroll of less than $500,000 annually and the Senate bill exempts companies with less than 50 employees from the mandate. The language included in the Senate bill at the behest of Merkley and Franken, however, would lower the Senate’s small business carveout’s threshold from 50 employees to five for companies whose “substantial annual gross receipts … are attributable to the construction industry.”
Proponents of the language argue that the construction industry insurance mandate will somehow level the playing field between open shop and union contractors in the bidding process. Unfortunately, this ignores the reality that open shop contractors, who employ 84 percent of the construction workforce, according to the Bureau of Labor Statistics (BLS), are unable to enter into preferential, multiemployer health plans that are available to union contractors. These plans exempt union contractors from the cumbersome web of state mandates that directly contribute to the skyrocketing costs of health insurance. (Ironically, AED and other construction trade associations have been begging Congress for years to pass association health plan legislation that would allow us to form multiemployer plans that offer the same benefits as the plans currently enjoyed only by labor unions and large corporations.)
Supporters of the provision have also suggested that the construction mandate is warranted because our industry has a higher rate of workplace illnesses and injuries. Wrong. Not only has there been a significant decline in workplace injuries over the past decade, but BLS data also shows the construction industry reporting fewer accidents and illnesses than the manufacturing, retail and health care sectors. The same BLS data even shows that employers with fewer than 50 employees have a lower rate of injury and illness than larger employers.
It’s still not clear whether Merkley and Franken intended to declare war on construction industry employers or whether they were duped. The construction mandate provision was apparently supported by a coalition called the “Campaign for Quality Construction,” which represents contractors in heavily unionized specialty trades. But according to reliable sources, the labor union members represent less than 16 percent of the industry workforce and the employer organizations supporting the provision have a total membership that accounts for less than 4 percent of the more than 800,000 employers in the construction industry. Whether the coalition misrepresented the breadth of support for the provision or whether the senators simply didn’t ask the right questions remains to be seen.
It’s also stunning that Senate Democrats would single out the construction industry for discrimination given what’s happening on the ground economically “back home.” Nationally, the construction industry employment rate exceeds 18 percent and the industry has lost more than $200 billion in economic activity in the past year. Of course, things are even worse for the construction equipment industry, which has lost 37 percent of its workforce since 2006. The last thing any construction industry employer needs right now is another mandate that will drive the bottom line further into the red.
The health care legislation is not a done deal. House and Senate Democrats are meeting to reconcile substantial differences between the two chambers’ bills. Meanwhile, AED and a broad coalition of construction industry groups are working to remove this unfair provision. President Obama has said he wants to sign a health care reform bill into law early this year, so it’s possible that by the time you read this column the issue will be resolved and AED and our allies will have been successful in preventing the Merkley-Franken language from becoming law. If the bill isn’t yet law, be sure to visit and let your congressional delegation know that you think it’s a dumb idea.

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