90TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session { REPORT No. 1846 SEASONALITY IN THE CONSTRUCTION INDUSTRY AUGUST 2, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. PERKINS, from the Committee on Education and Labor, REPORT [To accompany H.R. 15990] The Committee on Education and Labor, to whom was referred the bill (H.R. 15990), to amend the Manpower Development and Training Act of 1962, as amended, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment is as follows: Strike out all after the enacting clause and insert in lieu thereof the following: That, the Manpower Development and Training Act of 1962, as amended, is further amended, by adding, at the end thereof, a new title, as follows: "TITLE IV "SEASONAL UNEMPLOYMENT IN THE CONSTRUCTION INDUSTRY "SEC. 401. (a) The Congress finds that seasonal unemployment represents a substantial portion of the unemployment in the construction industry; and a significant portion of all unemployment; that seasonal unemployment results in economic hardship for construction employees, employers, and for the consumers of construction services; that such unemployment constitutes unnecessary and wasteful misuse of the Nation's manpower resources; that stabilization of construction operations may be expected to have a correspondingly stabilizing effect on construction employment and costs; and that it is highly desirable from the standpoint of the economy as a whole, and manpower policy in particular that positive and expeditious action be taken by public authorities and private groups to regularize construction employment. "(b) It is therefore, the purpose of this title to provide for the conduct of a study of seasonality in the construction industry, with special attention to its implications for national manpower policy. "SEC. 402. The Secretary of Labor, in cooperation with the Secretary of Commerce, shall study, investigate, conduct research, and prepare a report containing his findings and recommendations concerning means to achieve stabilization of employment in the construction industry and the diminishment of seasonality of employment in such industry, with special attention to its implications for national manpower policy, and shall transmit such report to the President no later than December 31, 1969. "SEC. 403. Matters which the Secretary of Labor, in cooperation with the Secretary of Commerce and after consultation with other officials of Federal agencies, and with engineers, architects, and representatives of labor and management in the construction industry, shall consider, shall include, but not necessarily be limited to, the extent to which seasonal unemployment in the construction industry can be reduced without substantial increases in construction costs by means such as "(a) the application of modern techniques to reduce the influence of weather on construction activity; "(b) the resolution of technical problems which have not been solved by existing research and development activities; "(c) possible changes in contract procedures in allocation cycles; and "(d) improved planning and scheduling of construction projects." PURPOSE OF THE BILL H.R. 15990 is a bill calling upon the Secretary of Labor, in cooperation with the Secretary of Commerce, and after consultation with architects, engineers, and management and labor in the construction industry, to conduct a study of seasonal unemployment in that industry, and to make such recommendations, affecting both the private and the public sector's construction activities, as will ease the serious problem which seasonality presents. HEARINGS H.R. 15990 was referred to the Select Subcommittee on Labor, chaired by the Honorable Elmer J. Holland. Public hearings were held in Washington on July 15, 16, and 17, during which witnesses representing the Labor Department, the General Services Administration, and both labor and management in the construction industry testified. Support for a study of the sesonality problem was expressed by both labor and management witnesses, notably by Mr. C. J. Haggerty, president of the building trades department of the AFL-CIO, and by Mr. William E. Naumann, testifying for the Associated General Contractors. No testimony in opposition to the study concept was offered to the committee. BACKGROUND Seasonality in the construction industry is the major cause of an unemployment rate nearly twice that of other industries in the United States. It is, in addition, a significant factor in the unemployment rate for the economy as a whole. This committee recommends passage of H.R. 15990 as the first step in a broad-scale attack on this burdensome, wasteful, and clearly unnecessary phenomenon. It is clear from the testimony presented during the 3 days of committee hearings that seasonality extracts a heavy toll from the construction worker. The laborer, on the whole, works only slightly more than one-third of a normal work year. While more skilled workers, such as the bricklayers and operating engineers, enjoy longer periods of employment, they still fall far short of exercising their highly skilled trades for a full work year. Government witnesses indicated that 1,600 hours could be considered a normal, average full-time year in construction. The committee wishes to point out that if this average could be extended only 200 hours, it would be equivalent to an addition of 333,000 highly skilled workmen to the construction work force. Although the construction worker bears the major burden of the cost of seasonal unemployment, he does not bear it alone. The contractor is forced to maintain an expensive permanent establishment during long idle periods each year. The buyer not only foregoes income from his new property for a period equivalent to the seasonal shutdown, but also must absorb an unnecessary portion of the everrising cost of construction. Government (ultimately the taxpayer) pays twice for seasonality. First, as the buyer of construction; second, by the additional cost. levied on the unemployment compensation system at the State level and the tax losses which arise from the limitations imposed by seasonality on the income of construction workers and contractors. In this connection, one witness estimated that Federal income tax losses arising from such limitations on laborers alone (about one-fourth of the total construction work force) amounted to $25 million annually. He further pointed out that through the operation of the graduated tax system "a 7-percent increase in hours work would yield a 32-percent increase in Federal tax payments." It is the committee's opinion that any action taken by the Federal Government would be amply repaid in dollar terms. The economics of year-round construction cannot be better summarized than by quoting from the testimony of Mr. C. F. Bone, a former president of the Canadian Constructors Association and chairman of Canada's All-Weather Construction Council, who appeared before the Select Subcommittee on Labor: The important factor to remember is that wintertime construction costs should be compared to those that will be experienced in the next summer, rather than the previous summer. Building cost indices have risen consistently each year over the past 35 years. The index in January is usually about 3 percent lower than in the following summer. This in itself indicates that it would be economical to spend quite large sums of money on wintertime construction, rather than postpone the work until spring. Mr. Bone and other witnesses, speaking both for labor and management, were unanimous in pointing out that the cost of wintertime construction only added about 1 percent to the total cost of the contract. Thus, in considering a program to deseasonalize the construction industry we are talking about a 1-percent increase in cost on ongoing projects compared to the possibility of a 3-percent increase in total cost levied by delaying the job to the next summer. Aside from the obvious economic benefits of year-round construction, the technological feasibility of year-round work has been amply demonstrated. The techniques of enclosure and heating can be used on building sites and small structures to carry on work during bad weather. We were surprised, however, to learn how much could be done in this regard. Again quoting from Mr. Bone: Enclosures are designed to fit the job and range in size from a small lean-to around a house, to huge structures such as the one used this past winter at a power project on the Nelson River in northern Manitoba. This shelter enclosed an area 580 feet by 120 feet to height of 140 feet. Within this enclosure, 750 men worked in their shirt sleeves constructing a generating station, while temperatures outside dropped to -40° F. or lower. Apart from the Canadian experience, it was brought to the committee's attention that virtually all of the nations of Western Europe, as well as the Soviet Union, have active programs of all-weather construction. In spite of that, and in spite of the much-vaunted technological ability of the United States, this country has barely given a passing thought to meeting the problem. The committee feels that the major obstacles to year-round construction are three. First, a lack of knowledge on the part of the industry of the techniques and cost factors that make all-weather construction both feasible and attractive. Second, a reluctance to change deeply embedded patterns of seasonality. Third, a division of responsibility for whatever additional costs must be absorbed. In the case of the masonry industry, there has been a serious attempt on the part of participants in the industry to make a concerted attack on the problem of seasonal unemployment. The committee was impressed with the obvious enthusiasm of the joint Labor-Management All-Weather Committee for the Masonry Industry. We point out, however, that this is essentially a specialty group which cannot be expected to solve the problems of seasonality for the whole industry. The committee feels that the Federal Government has a large stake in solving this vexing problem. In the first place, Government is a major purchaser in the construction field. Secondly, large fluctuations in unemployment rates present serious manpower policy problems and should be corrected if at all possible. Thirdly, the burden of seasonality on the unemployment compensation system should be eliminated. The Federal Government is in an excellent position to have an impact on the problem. The executive branch apparently agrees. The testimony of Under Secretary of Labor, James J. Reynolds, indicated to your committee that steps were already underway in the executive branch to attack the problem of seasonality. We applaud these efforts and want to emphasize that nothing in this bill should serve to delay any of the steps currently being contemplated. Nor should the fact that a study is underway serve in any manner to justify delay in adopting positive policies within the scope of Federal contracting authority. It has been proposed, for example, that the Federal Government require that all building construction on Federal projects or federally assisted projects, shall be contracted for in such a way as to assure the continual progression of work in accordance with the approved construction schedule, notwithstanding weather conditions. All requests for bids might, for example, require contractors to |