(Ken Adams, national chairman of the Associated Builders and Contractors (ABC), Washington, D.C., for 2002, began his construction career while still in his teens, and is now President of Pace Electric Inc., an electrical contracting firm in New Castle, DE.
He’s active in the local and statewide Republican party, the Delaware State Prevailing Wage Advisory Council and Partners in Safety, a partnership between contractors and the DuPont Company.
In the following exclusive interview, he provides fresh insights into ABC’s support of “free and open competition in the construction industry.”)
CEG: Ken, you’ve been in the construction industry for a long time. Tell us about it.
Adams: I’ve been in construction for almost 40 years. I was working for an electrical contractor as an apprentice electrician in my teens. I worked as an electrician in the field. I came up through the field in various jobs with different companies, including ground work in the field, and then positions as foreman, project manager and estimator.
Next, I took on the challenge of starting and operating the merit shop electrical subsidiary of a large unionized electrical contractor. Then, in 1986, I founded Pace Electric Inc. Today, Pace operates in Delaware, Maryland, Pennsylvania, New Jersey and Virginia.
CEG: So you experienced free enterprise in your own career. Did you ever join a union?
Adams: I actually worked for a union in 1965 for six months on a permit when they couldn’t get enough people to do a large job in our area. I got to experience first-hand what it was like and what the problems were there, and I elected not to go forward with that.
CEG: Can you describe ABC for our readers?
Adams: We’re a national association representing more than 23,000 member firms in 81 chapters nationwide. ABC is devoted exclusively to representing the interests of merit shop contractors. Founded in 1950, ABC advocates free enterprise and open competition in the construction industry.
CEG: What do you mean by merit shop?
Adams: Merit shop was actually coined as a procurement term many, many years ago. It means that a project should be awarded based on the merits of the contractor, with its pricing being the low price from responsible parties, whether union or open shop. We don’t want to be described as representing only open shop. We represent anybody and everybody.
I especially feel that freedom of choice is really important to an individual, more than anything else.
CEG: What percentage of the industry is merit shop?
Adams: In annual construction work done, some 75 percent of the work is done open shop, and in addition some unionized firms adhere to the merit shop philosophy so it is safe to say that the vast majority of the work put in place is being built merit shop.
The majority of the U.S. construction industry is merit shop. That’s because this philosophy just makes so much sense. It’s American free enterprise at its core. Open competition allows everyone to compete, and it allows the consumer to get the best product at the best price .
CEG: Have open shops been increasing?
Adams: Unionization in the construction industry has been on a decline since the 1950s. Today, less than 19 percent of U.S. construction workers choose to affiliate with labor unions, and that percentage declines nearly every year.
Workers have heard the union pitch, but they just aren’t buying it. They are finding that the opportunity to succeed based on merit and to advance as their skills progress is far greater in the open shop.
Also, as mentioned earlier, the bulk of the construction being put in place is being built by non-unionized firms. Because of the loss of revenues organized labor has come up with some rather unique ways to try to recover some of that market share.
I’m thinking of all the action we’ve seen with frivolous lawsuits, salting abuse, stripping and those types of thing.
Now the biggest one, to me the worst one, is project labor agreements (PLAs), which means that to participate on a job the contractor has to sign a labor agreement.
CEG: Why do you feel so strongly about PLAs?
Adams: I believe PLAs are totally un-American. They block open competition and undermine one of America’s basic fundamentals, the free enterprise system. They are designed to reserve work to organized labor, and that’s costly and discriminatory. It is simply wrong to discriminate against the majority of the U.S. construction work force in this manner.
CEG: Has there been recent legislative action on project labor agreements?
Adams: After President Bush was sworn in, one of his early executive orders was to say that no federally-funded work would be done by mandatory project labor agreement .
Organized labor has challenged this executive order in court. This is an on-going case at this point. ABC has submitted an amicus to support the Bush administration and open competition in this case.
In our area, the governor of New Jersey, in his Executive Order Number One, said all state-funded work has to go to a project labor agreement. Certainly that’s a big challenge to overcome. But there are other states that have taken action to block project labor agreements.
Most recently the state of Ohio adopted a law banning project labor agreements on taxpayer financed work. That’s a trend ABC wants to help continue nationwide.
And there also is legislation pending in the U.S. Congress to stop union-only project labor agreements. A free-enterprise Congress would be a big plus in this regard.
CEG: You referred to salting abuse. What does this mean?
Adams: They plant a union organizer within a company like mine to destroy it. They use the National Labor Relations Act to do that, bringing up what we call frivolous lawsuits from union employees or from the union labor organization on its own. They then go to the National Labor Relations Board, which seems to have a hard time figuring out right from wrong. The board many times will take labor’s side, even though in the final outcome, we end up winning the majority of the time. But it costs us a lot of money to defend ourselves. The National Labor Relations Board is one of the few places where you’re more or less guilty until proven innocent.
CEG: In general, what do feel are the advantages of a merit shop?
Adams: Opportunity. The merit shop philosophy provides an even playing field for everyone. You succeed based on merit. That’s the American way. It is the opportunity to bid and win any construction job solely on the basis of qualification, performance, capacity and price, regardless of whether one’s employees have chosen to work open shop or to join a union.
The merit shop philosophy also advocates the opportunity to run your own business instead of having somebody else run your business for you.
I think unions have outlived their usefulness. Today, people are treated fairly. I think most contractors realize that the most valuable resource is their people. There are fewer and fewer people every year to fill all the jobs that we have. That makes creating and promoting dynamic careers based on merit in the construction industry all the more important.
CEG: How about wages?
Adams: Wages are closer and closer between the union and open shop sectors all the time.
CEG: Labor wages are still higher?
Adams: In general, yes, but I have people right now that I pay higher than a union wage because they’re worth it. That, to me, is what merit is all about, and that’s what I think is the advantage to construction workers who choose to work without organized labor because they make their own deal. Whether it’s more or less, they get paid based upon performance. That gives everyone an equal opportunity for success.
It’s the opportunity to advance and to be paid according to skill level and performance that is so appealing in the merit shop. Wages are competitive. The opportunity to succeed is so compelling in the merit shop and that’s why such a large majority of construction workers choose not to join a union. There is so much opportunity in the merit shop. Craft professionals are not held back by outdated work rules or time-based promotion practices.
I think the biggest problem organized labor has right now is that it is unable to pay people based upon skill level and performance. Workers deserve to be paid and advanced based upon their worth.
CEG: So, most of the people in construction are merit shop and they’re getting close to union wages?
Adams: Yes.
CEG: Your political action campaign aims at electing what you call ’a free enterprise majority’ in the U.S Senate. Do you already have a majority in the House?
Adams: Yes, we can maintain the House under the Bush Administration which clearly understands and promotes free enterprise. But we need to elect a free enterprise U.S. Senate. We don’t have that right now. Our goal is to get a level playing field through legislation.
CEG: Why do you mean by free enterprise majority?
Adams: A majority in favor of free and open competition, where you’re not locked out by government regulation, and where your low price can get the job. In those cases, you should get the job when you’re qualified to do it, and union representation should not have a bearing on that.
CEG: ABC says it is targeting five Senate seats especially. You feel that the House can help you now, but you need five more votes in the Senate?
Adams: We’re only one vote short in the Senate right now. It was 50-50 before the senator from Vermont switched to Independent, giving the majority to those who don’t see things the way we do.
CEG: A hard-nosed look at the November elections is that the election is still up for grabs and can go either way? It’s not a runaway by any means, is it?
Adams: No. We have a hard job ahead of us, but we’re certainly up to the task.
CEG: What are some of the things which you would like to see happen if you’re successful this fall?
Adams: We have a list of initiatives which includes stopping project labor agreements, removing legislative barriers for business, and the ability for employers to provide their employees with health care through association health plans. That’s something we used to be able to do but it’s a problem now.
CEG: Do you want a business-friendly Congress?
Adams: Our goal is a common sense Congress that is fair to everyone. We want a Congress that supports free enterprise, open competition and equal opportunity for all.
CEG: Would you say that Congress is friendly to the construction industry? It has passed massive highway bills in the last few years.
Adams: Presently, I would say they’re not. The Congress is not as supportive as it needs to be of common sense free enterprise legislation that would ensure open competition in the construction industry.
CEG: How are you reaching the public with your campaign?
Adams: We have a terrific grassroots effort throughout the country conducted by ABC national. We’re in touch with a lot of members and we’re going to get them out to help us campaign. Our campaign and the grassroots effort is the strongest we’ve ever had and our PAC [political action committee] will probably be the largest it has ever been.
We’re getting the message out to our 81 chapters all over the country, including Alaska and Hawaii. We also reach many members through e-mail, giving them issues to talk to their employees about.
One of the things we’re very conscious of is that employers are not allowed to tell employees whom to vote for, but employers can advise them on issues like the legislative records of candidates. And ABC is allowed to talk to our members about specific candidates.
CEG: Would the PAC be affected by legislation on campaign finance reform?
Adams: Our PAC is not, but we have another source of issue advocacy — the Free Enterprise Alliance. We collect money for that for advertising and public education. If the court upholds this law, we will have to modify how the Free Enterprise Alliance communicates its message.
CEG: You feel that leaders like Senator Kennedy and Senator Daschle are not setting a free enterprise agenda?
Adams: They are absolutely not setting such an agenda.
CEG: You also hope to educate people more by bringing them to job sites?
Adams: That’s our program for getting legislators to job sites so that they can see what’s really going on, maybe talk with some of the workers and hear first-hand what they’re feeling.
CEG: What are your feelings about President Bush and construction?
Adams: He seems to be very knowledgeable. He has surrounded himself with good people and some of those people come from construction. They understand what the issues are. He seems to be going along with the open competition free enterprise agenda, whereas the previous administration didn’t know what it meant. I don’t think you ever heard the words free enterprise or open competition from them.
CEG: So you’re looking forward to good days ahead?
Adams: Sure are. If we could get this whole message to the American public, the taxpayers and the voters, there would be no problem at all in my opinion. They certainly would understand that their tax dollars are going to things which could cost 15 to 25 percent less. CEG
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