Impact of COVID-19 on Jobs in Our Jurisdiction
The construction economy in our region is doing ok as we all deal with the economic hit that the COVID-19 crisis has caused. There is no doubt this virus has disrupted what would have been a booming economy in some sectors in our jurisdiction. But there is real hope that this is a temporary setback, and we are seeing most sectors continue to thrive despite the economic downturn. So overall, there is cause for continued optimism. Below are some thoughts on specific industries and areas of our region based on conversations with government officials, contractors, and industry leaders that I am in continuous contact with.
We have received assurances from government officials that this year’s schedule for Minnesota transportation projects will continue as planned with no impact because of budget issues. For this year, the transportation sector will do very well as anticipated. North Dakota DOT projects look solid too, due to an uptick in spending this year.
However, state and local governments are facing budget shortfalls longer term due to lack of tax revenue coming in with large parts of the economy shut down. We will need to fill those holes to ensure that future funding isn’t impacted. There are good options. The Federal Government is potentially going to step in and send direct aid to states and local governments to help them recoup their losses. There is also talk of a major infrastructure bill at the federal level, which would help tremendously.
Additionally, today I was asked to testify virtually in the MN Senate Bonding Committee on the urgent need this legislative session to include significant funding for transportation infrastructure in the bonding bill.
I am very optimistic we will see hundreds of millions of new dollars pumped into Minnesota’s transportation infrastructure system in this bonding bill, and we will keep pushing for that. We will also keep working with our federal delegation to push for direct federal aid to states and local governments to make sure they can continue to spend money on construction projects and maintain their public works employees. And if the federal infrastructure proposal gains momentum, we will push for that too.
There will be a time for you to get involved, and we will alert you when that time is – it is too early in the process right now for most of these items, but stay tuned.
The building construction sector in our entire jurisdiction is going to take a bit of a hit in the short term. I am seeing private projects delayed or cancelled due to the unstable economy. We are also seeing delays in scheduled outages at power plants, refineries, and mines. There is hope this is short term, and work will pick up quickly once the economy starts to open back up.
This industry continues to surge in our area. A few significant projects are kicking off this year, with several more in the works over the coming years. We are working on strategies to ensure that more of this work goes union in the Dakotas, but we do get a good chunk of it even when the general contractors are non-union. We will continue to support these projects, and work with owners to see the value of using our skilled members to build their projects.
This work looks strong this year, but I am hearing of some impact on delays starting up due to slowdowns in private sector housing and development. The quicker the economy gets back open, the better it is for this work. But I would say there is a good chance this work remains strong this year despite limited early delays.
This sector is a mixed bag. We have seen a good increase in the number of pre-jobs we are doing in our jurisdiction last year and this year, but these are smaller jobs. Nationally, the big jobs seem to be bottled up all over the country with permitting issues. Very similar to Line 3 here in our area.
Line 3 is moving forward right now, they have their permits from the Public Utilities Commission, but there are some hurdles to overcome before work can begin. I am hearing from the company that if all goes well and there are no hiccups, construction will begin in earnest later this summer. We did our part to push this forward, 49ers showed up strong to participate in public hearings and submitting comments.
It’s largely in the hands of the courts at this point – but we will continue to push to get Line 3 done.
I think the hardest-hit area of our region is the Iron Range. Three of the six major mines are idled right now because of the COVID-19 pandemic. That has had a devastating impact on the entire economy up there. When the mines come back, things will pick back up, but there is no question our members up there will be impacted, they already have been.
The great thing about being a 49er is the diversity of the work that we do. I encourage members that have been laid off to call the halls and see if they can get out doing something else for the time being. The mines will open back up, and most are scheduled to do so this year.
One bright spot – we strongly supported the development of a new operation at the old Magnetation Site in Grand Rapids. Prairie River Minerals will be building a demonstration plant this year. They have secured the money they need, and construction will begin soon. Once this demonstration project is done, and full operations begin, this will be a big boost to the Range.
It will be a rough ride this year for public sector members. There is no question local cities and counties are going to take a financial hit because of the lack of tax revenue coming in. We are already hearing calls for wage freezes at the bargaining table in some areas. Again, the sooner the economy opens up, and tax revenue comes back, the shorter-term this problem will be.
We will also continue to push for federal relief for local governments, which would help tremendously. Right now, we are not hearing of any furloughs or layoffs, hopefully, that continues.
There are some layoffs happening on the Iron Range for equipment shops that supply the mines, but other than that, things seem pretty steady for the shops around the jurisdiction. As long as road construction and other big sectors like wind continue to be strong, it should overall keep the shops strong too.
I quickly wanted to let you know that the financial state of the union is rock solid. The reserves we have built position us well to continue to service the membership and ride out the storm of economic uncertainty. Situations like this are why you save money so that we have the resources we need to continue to fight for you and to push to get this economy back up to full speed quickly.
I also wanted to remind members that the Health Fund acted in March to cover insurance for any member that was going to lose it through May. If you are laid off and out of banked hours or are on a monthly bargaining premium, your insurance is good through May.
Our union halls remain closed to foot traffic, but fully operational for business via phone or email and business agents remain on the job taking care of issues for members. We are still organizing companies too, and we signed up a few new outfits in the last couple of weeks.
This is a challenging time, but we are getting through it and continuing to service the membership.
I will have an update on union meetings later this week once we find out more about Minnesota’s shelter in place order.
We have a new ratified MN Highway Heavy agreement, and you can find the wage rates here online. I will make comments on the agreement at the May Minneapolis membership meeting, which will then be distributed for all members to read at outstate meetings and posted online. If there is no May membership meeting, I will post something in the members-only section. Overall, this vote was very positive, and the contract was very good.
We ended up doing a year extension of the North Dakota Builders agreement with a small increase on the check because of the economic uncertainty in that industry. This has been communicated to members via letter.
In addition, we just concluded an allocation vote for the pay increase for the National Distribution Pipeline agreement. Those rates will be online soon and go into effect on June 1. You will notice that for the first time ever, Distribution members are going to get a Health Reimbursement Account with a quarter per hour going in to start. We will be doing the same for the mainline pipeline members when their new agreement is negotiated this year.
This was a long update, but it had been a while since I sent something and wanted to make sure I spent some time talking about the job situation, as I know that is foremost on your minds. We will get through this period of time, and there is no doubt in my mind we will come back stronger than before.
Work safe, be smart out there, follow the health guidelines contractors are putting in place, and as always stay together.
IUOE Local 49