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It seems odd, almost absurd, that the fate of an entire industry in Philadelphia hinges on the use of a simple power tool. But it does.
The industry is the leisure and tourism sector of the city’s economy, which employs 62,000 people in service jobs that help fill the gaps left by the collapse of our manufacturing sector.
The power tool in question is a screwdriver, the kind we all use these days. Mine is a battery-powered Craftsman I bought at Lowes.
If I was an exhibitor at the PennsylvaniaConvention Center I could not use my Craftsman to set up my booth.
I could use an old-fashioned, hand-powered screwdriver, but power tools can be wielded only by union carpenters (at $65.01 per hour.) If I wanted to stand on my tip-toes and hang my sign, I could do that. If that task required a ladder, I could not step on it. Only a carpenter can use a ladder.
Similarly, if I leased a computer for my booth I could not plug it in. I’d have to use a union electrician ($71.62 an hour). Nor could I unpack the box that holds my giveaways — pens, tote bags and other tchotchkes — and place them on the table. That is the job of a union laborer ($45.52 an hour). During the convention, if I decided to move that table from one side of the booth to the other, lifting it myself is verboten. I’d have to call a laborer.
In a nutshell, that is the problem with Philadelphia’s Convention Center.
That is why the hugely expensive state facility is in trouble; why it’s much-touted $780 million expansion has failed to draw customers; why the number of conventions in town is projected to sink from 19 this year to 10 in 2016.
These practices have come to be called “labor hassles,” a catch-all term that includes everything from restrictive work rules, to high labor and overtime costs, to getting yelled at by a union foreman for stepping on a ladder.
Like the rest of us, people in the convention business don’t like hassles. Exhibitors have a small window of time to set up and take down their booths. If they have to wait two hours for a carpenter to show up with his Craftsman to screw together curtain rods — and have to pay him overtime because it is 9 o’clock on a Saturday night — they are not pleased.
All work activities are governed by a Customer Satisfaction Agreement (CSA) that dates to 2003. At the time, the CSA was a forward-looking document. These practices were fairly common in the convention business, especially at union-run centers. That is no longer the case.
The trend is to give exhibitors and convention organizers what are called “unlimited rights,” as opposed to “restrictive rights,” when it comes to setup and takedown, especially in smaller booths, usually those 300-square feet and less.
Soak the exhibitors
Philadelphia has another problem when it comes to the convention industry. There is a widespread perception that exhibitors are being gamed when it comes to labor. Sometimes it is subtle — sending over a carpenter foreman (at $90 an hour) to do a job, instead of a $65-an-hour journeyman; delaying jobs until overtime kicks in; finding ways to run up the tab so your guys can get more money.
There is evidence this is not just a perception. One study compared the cost of setting up the same show in two different cities: Philadelphia in 2011 and New York in 2009. Both centers have union help and restrictive work rules. But Philadelphia, the study showed, took more days to set up and overtime hours here were more than double New York. In New York, for instance, 203 carpenter foremen were used. Philly used 972.
In a burst of understatement, a consultant hired by the Convention Center’s board wrote in a report earlier this year that: “It is notable that labor costs [at the Philadelphia facility] are generally higher (if not highest) among peer facilities and this is, no doubt, a key issue going forward.”
Substitute “disaster” for “key issue” in the previous sentence to get a sense of the true state of affairs.
Philadelphia cannot coerce groups to hold their conventions here. They can go wherever they want. Competition for business is intense. The world of convention bookers and organizers is small. Word about bad experiences spreads quickly. Why come here when you can go to Washington, D.C., Orlando, Denver, San Francisco, even Chicago and not face restrictive rules? Bring your Craftsman along! Hop on that ladder! Plug in your own computer! We’re happy to see you!
Convention organizers are voting with their feet. Not only are they not booking Philadelphia, some are canceling conventions previously scheduled. Four groups, which did hold large conventions here recently, left vowing never to return, according to data I have seen.
For most of the 2000’s, the Convention Center averaged 18 large conventions each year — the 10,000-plus delegate types that fill hotel rooms. The state spent $780 million on an expansion that greatly increased square-footage. The prediction was that the new, improved Convention Center would draw between 25 to 30 large conventions each year.
The expansion opened in 2011. This year, there will be 19 conventions in the center. Over the next five years, the average is 10 each year.
In other words, we will host significantly fewer conventions in the new, improved $780-million center in the future than we did in the old one.
When members of the 15-member convention board talk about the center, they prefer to underplay these numbers. They like to say there is “the perception of a problem” at the center.
The center does not have the perception of a problem; it has an all caps-boldface-exclamation-point PROBLEM!
A central artery
It’s best not to see the Convention Center as a building, but as an organ. It serves as the heart of our tourism, leisure and convention sector: hotels, restaurants, entertainment venues, taxis, etc. The sector adds up to 62,000 employed in these service jobs.
When the Convention Center hurts for business, these related services suffer, too.
For instance, this year — with 19 large conventions in town — delegates and other attendees will use up 431,000 nights in local hotels. In 2016, that number will drop to 209,000 — a 52 percent decline.
This year, conventioneers will spend $510 million while in town. In 2016, that number will plummet to $230 million — a decline of 55 percent.
Loss of conventions means loss of jobs. If the center is empty, so are hotel rooms. So are taxis. So are restaurants. So is the panoply of venues that cater to the convention trade.
Most of the jobs in this industry are not glamorous. The average wage in the hotel industry, for example, is $24,000 a year. Housekeepers make about $14 an hour. Eighty percent of the workers in the hotel industry are Philadelphia residents and the majority of them are non-white. With the projected decline in convention business, hotel managers are already planning to reduce their workforce. You don’t need a housekeeper to clean an unused hotel room.
In contrast, 80 percent of the members of the carpenters union live outside the city and 75 percent of them are white males. At the center, they make $65 an hour — and they are about to get a raise.
An irony of the keruffle over the carpenters at the center is that their work there represents a tiny slice of the large pie called “carpenters wages.” Sources tell me that about 900 carpenters worked a total of 160,000 hours at the center last year; meaning their total take was between $10 million and $12 million.
In contrast, according to my analysis of Labor Department documents, carpenters working at all other jobs in the region — mostly involving construction — grossed $504 million. Convention Center work represents just 2 percent of total wages.
Yet, when the board of the Convention Center tried to get concessions on work rules in order to save their sinking ship, the carpenters balked.
When it came to booths under 400-square feet, management wanted to give exhibitors unlimited rights: plug in your own computer, move your own giveaway tray, use a ladder and a power screwdriver. In other words, small exhibitor, we’ll stay out of your way while you go about the business of setting up your booth. (Under this proposal, larger booths and all other work would remain in union hands.)
In exchange, management offered the six unions that work in the center a 10-year deal with 3 percent annual wage increases.
To be fair, the unions are not unaware of the center’s problems. They realize that they will lose work if conventions abandon the center. And most of the unions have gotten on board in terms of customer relations. What I heard again and again in reporting this piece is that five of the six unions present little or no problems; the carpenters union is the problem. The carpenter crews at the center are led by Ed Coryell Jr., who has the reputation of being a difficult man and a disruptive force.
Time to strike
Coryell is the son of Ed Coryell Sr., who is president of the Carpenters District Council.
The other week, management, in negotiations with the center’s unions, got five of the six to agree to the work rule concessions sought. The other union leaders bought into management’s “unlimited rights” model. Coryell Sr. did not.
He said the concessions would cost his members half their hours, a figure disputed by center management. When warned of the decline in convention business, he denied it would decline. We’ll get the conventions, he is reported to have said, we always do. It was, according to one participant, “like a trip to Fantasy Island.”
No matter. Coryell pulled his people out and set up picket lines on August 1. Some of the other unions joined him, shutting down the center the very day they were to begin setting up a large convention of diabetes educators due to begin the next week (August 6).
For a center already suffering a bad rep for ‘labor hassles”, canceling a convention just as it was to open would be a calamity. A public-relations nightmare. The 15-member center board quickly caved. To end the strike, the board agreed to extend the existing CSA for another year while it worked with its friends in labor to find common ground that would move all concerned towards a new and happy day — or words to that effect, as related by the official statements made by the board that day.
(Another absurdity is that while Coryell is head of the largest union at the center he is also a member of the center’s board, appointed to that position last month. He is management and labor.)
While the board averted a catastrophe, it still has a disaster on its hands. The old work rules remain in effect, for all the unions. The convention industry’s take likely will be: Labor still rules the roost in Philadelphia, so stay away.
The irony (one of many) is that by clinging to their ladders and Craftsmen, the carpenters will continue to get the maximum hours for each convention. But, if the number of conventions goes from 19 to 10, they will lose about half their potential hours anyway. “They are frying the golden goose,” as one participant put it.
Why would Coryell be so insistent on not giving any ground? I haven’t succeeded in getting him to talk about it (as a rule, he doesn’t return media calls), but I can speculate, based on conversations with various players close to the situation.
For starters, Dr. Freud, there’s the issue of his son. The convention center is Ed Coryell Jr.’s little fiefdom and Dad is taking extra steps to be sure to preserve it.
More logically, the center serves as a safety valve for the union. Due to the recession, union construction work has tanked. Gross hours earned by carpenters in the region have fallen 32 percent in the last four years, while membership has declined 15 percent.
Carpenters qualify for health and welfare and pension benefits based on hours worked. Sources tell me you have to work 1,600 hours a year to qualify for decent health benefits, about 1,760 hours a year to qualify for top-of-the line medical coverage.
If Coryell can throw a couple of hundred hours of convention work at a member stuck at 1,400 hours, it’s a mitzvah. That may be one reason the carpenters rotate so many members through the center. For years, they have resisted management calls, in the name of better customer service, to use the same crews over and over.
Also, working at the center is a cake job. No heavy lifting, no sweltering in the sun. No backs are broken screwing together curtain rods for display booths. And you get the same wages working in air-cooled comfort as you do working on a hot and dirty building site outside. So, why give it up?
Finally, Coryell can refuse to compromise because it is not in his interests to do so — as narrow as those interests may look to you and me. He doesn’t want to give up the $4 million to $6 million his men could make in the short term, so why do it? He wasn’t elected president of the union to give away hours, even if his failure to give up a few millions will cost the city and the convention sector many hundreds of millions, even though it will cost housekeepers and bellhops, waiters and dishwashers jobs.
That’s not his problem. That’s someone else’s problem. And if you don’t like it? Well, go screw yourself.
But, if you do, use a manual screwdriver, not a Craftsman. Only Ed can use a Craftsman and right now he’s got it aimed at our heart.