Legislature(2005 - 2006)BELTZ 211
03/28/2006 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Personnel Board | |
| SB307 | |
| SB300 | |
| SB309 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 241 | TELECONFERENCED | |
| *+ | SB 309 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 307 | TELECONFERENCED | |
| += | SB 300 | TELECONFERENCED | |
SB 309-CONSTR. TRAINING GRANT;UNEMPLOYMENT COMP.
CHAIR CON BUNDE announced SB 309 to be up for consideration.
SENATOR GENE THERRIAULT, sponsor of SB 309, said the Department
of Labor requested a committee substitute that would correct
some technical issues.
SENATOR RALPH SEEKINS moved to adopt CSSB 309, version I, as the
working document. There were no objections and it was so
ordered.
SENATOR GENE THERRIAULT explained that language on page 2, line
1, "The amount collected in this subsection is in addition to
the amount collected under AS 23.15.835" was deleted because it
was unnecessary. "Interest and penalties" was also deleted on
the same page and a reference to paragraph (a) was added.
He made the following comments:
This legislation responds to an upcoming opportunity
to train residents to fill thousands of high-paying
jobs that would be created in the construction of the
gas pipeline and other growing construction needs by
providing a stable stream of revenue subject to
legislative appropriation to the Alaska Works
Partnership Inc. for both training and increasing
capacity of training facilities....
In 2005 there were more than 20,000 individuals
employed in the Alaska construction trades with annual
incomes approaching $60,000 each. Unfortunately, one
in every five jobs or 20 percent of those being to
individuals who, according to the Permanent Fund
Dividend eligibility information, were recent arrivals
to the State of Alaska or temporary residents of the
state. Also, with 45 percent of our resident workforce
being over 45 years of age, the industry must start to
renew its workforce with thousands of appropriately
trained workers. Without action on our part, these
high-paying jobs will continue to attract workers from
other states and other countries. The Alaska Works
Partnership is a non-profit organization whose mission
is to increase resident hire in the construction
trades.
The funding proposed in this bill will leverage
industry investment in training facilities and
equipment to build private sector training capacity
and increase industry capability for sustaining
training into the future. More that 90 percent of the
workers that Alaska Works Partnership trains are not
members of a union. The majority of the workers that
Alaska Works Partnership places in jobs go to work for
non-union employers.
The legislation is intended to divert one-tenth of 1
percent of the current employee contributions to a new
holding account for appropriation each year by the
Legislature. The estimated income of the account is
projected to be roughly $5 million per year. With
increased payroll within the state, the Department of
Labor has projected that it is highly unlikely that
this small percentage diversion will cause an increase
in the overall unemployment rates that are insurance
rates. As we grow the base, the 1 percent should not
trigger any change in the rates that are charged. This
legislation is slated to sunset in six years and
requires annual reporting on performance standards.
As we work through the committee process, I ask
members to consider placing a priority on training of
resident Alaskans to get the benefit from increasing
heavy construction, highway construction, general
construction and certainly construction that would
take place on the oil line. In addition, I believe we
want to certainly be taking a longer look not at just
the construction jobs associated with taking that
resource to market, but also the legacy jobs that
would be left over in operating and maintaining
facilities....
2:18:22 PM
SENATOR THERRIAULT related that part of the problem with
training workers is that employers are needed who are willing to
take on the new trainee and pair him with a journeyman - and the
salary has to be paid. He said the committee might hear a
suggestion that if there is some way to assist employers in
actually bringing in the trainee and getting them up to speed,
that might be a component of the overall training mechanism that
is missing right now - especially if construction of the
pipeline ramps up.
2:19:35 PM
CHAIR BUNDE heard concerns that SB 309 is aimed at filtering
workers into union jobs.
SENATOR THERRIAULT responded that there is no requirement that
trainees be in a union and it was not his intent to do so.
2:21:35 PM
CHAIR BUNDE asked why the tax is placed on the employee only,
since both employers and employees would benefit.
SENATOR THERRIAULT replied that that concept is patterned after
revenue generating mechanism that is used to fund existing STEP
and University programs, as well as others. He just copied what
was already in state law.
2:23:03 PM
COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce
Development (DOLWD), testified that 90 percent Alaska hire was
one of the Governor's goals across the board in all industries
in Alaska. However, the only statutory authority that exists to
require that is in public construction. He is just below meeting
that standard on a consistent basis, but he admitted that
construction workers would always have to be imported if
approaches like Senator Therriault's were not adopted.
He said that the existing STEP program cannot shoulder the
entire burden of training Alaska's construction workforce to
meet industry demands over the next six years and still be
poised to capture a majority of the pipeline jobs if that
project goes forward. Enormous number of people will be required
to build the pipeline - 400 - 500 pipefitters and welders, 1,900
- 2,300 equipment operators, 2,000 - 2,500 truck drivers, 1,200
- 1,600 laborers including welders helpers, 400 - 500
supervisory positions and another 900 - 1,000 construction
inspectors, camp employees and catering personnel, electricians
and ironworkers - for a total of 6,900 - 8,600 workers.
The Department and the construction industry spent two years
examining and developing a construction plan to deal with the
workforce needs of Alaska's construction industry. A copy of
that report was provided to the members. He reiterated that this
particular bill would enable the state to meet that demand.
2:26:41 PM
COMMISSIONER O'CLARAY said that this year the Department is
initiating a pilot project with the Anchorage school district to
train 100 - 200 construction workers that will enter the
residential construction field, primarily as homebuilders. This
approach has a lot of support and requires about $1 million
initially. This funding stream would meet some of those needs in
addition to upgrading capacity for training workers.
He said the reason he supports this bill and the use of Alaska
Works Partnership as the main vehicle for training workers is
because it already does the best job; it has the highest
performance of every grantee on a consistent basis. Graduates
from those training programs are placed between 88 and 90
percent in almost every field of endeavor.
2:28:15 PM
Only two states tax workers for a portion of unemployment
insurance benefits, Alaska and New Jersey, and this is proper
use of that money. It reduces unemployment and increases their
earning power by moving them up the ladder.
2:28:47 PM
CHAIR BUNDE asked his thoughts on recruiting people for this
training asking:
We have the demand from the employer side. Are you
aware if there is a demand from the potential employee
side? When we make these services available, are young
people going to take advantage of them?
COMMISSIONER O'CLARAY replied that he has had conversations with
a lot of young people, educators and parents. This year with
some federal grant money, the Department initiated career guides
into K12 schools who would help young people make career choices
working with their hands. This is having "tremendous success."
He said that when kids leave school the most important thing is
to have a good work ethic.
2:31:09 PM
CHAIR BUNDE asked if he anticipated TAPS closed-shop attitudes,
primarily in welding, for the building of the gas pipeline.
2:31:37 PM
COMMISSIONER O'CLARAY said he has seen the language in the
current gas line contract and he believed it is better than what
was in the TAPS agreement. Alaskans are poised to at least get a
first shot at the jobs.
2:32:02 PM
SENATOR SEEKINS asked where all those people would come from.
COMMISSIONER O'CLARAY replied primarily out of Alaska's K12
systems - maybe those who are dropping out of high school and
from rural Alaska. That is the largest concentration of new
workers.
SENATOR SEEKINS asked if he anticipated recruitment from people
who are already in the work force.
COMMISSIONER O'CLARAY replied, "Absolutely." The last study he
saw said that young people nowadays change careers over 10
times.
SENATOR SEEKINS said there was a terrible strain on employers to
fill the positions created when their workers go to work on the
pipeline and he asked what was being thought of for those
employers.
COMMISSIONER O'CLARAY replied that his overall strategy has been
to do both. That is why creating this new funding stream
focusing on construction would free up additional investments he
is now using in the STEP program to train replacement workers to
fill the vacuum of other types of classifications across the
board. There would be a gradual build up over the next six
years, which he thought would stem the flow of the vacuum that
be created in resident workers as it was during building of the
TAPS.
2:34:22 PM
SENATOR THERRIAULT asked how small employers could be helped to
pick up paying the extra salary, because that seemed to be part
of the bottleneck now.
COMMISSIONER O'CLARAY replied that, while successful programs
exist, employers and contractors needed to make more room for
apprentices. The construction trades have already moved toward
doubling the number of apprentices that they interview and take
in to their various programs to meet the ongoing demand. The
construction industry seldom uses wage.
2:36:56 PM
SENATOR SEEKINS said he was surprised to find that 35 years old
the average hiring age for a teacher in Fairbanks. He asked what
age group would be attracted to this type of training program.
COMMISSIONER O'CLARAY said he would provide him with that
information, but wanted to make a last point. The employers
working with the STEP program and the Alaska Works Program are
providing a tremendous match in dollars to their grants. For
example, the Alaska Joint Electrical Apprenticeship and Training
Trust received a STEP grant in 2005 of $191,000; its match was
$490,300. The Laborers Training Trust received a grant of
$292,000; its match as $538,000.
2:39:23 PM
MICHAEL SEXTON, Executive Director, Mechanical Contractors of
Fairbanks and Mechanical Contractors of Alaska, supported SB
309. He said that training is the key to being successful in any
industry. Good paying jobs and training go hand in hand and good
pay is essential for keeping young people in Alaska.
2:41:07 PM
JIM LAITI, Business Manager, Plumbers and Pipefitters Local 375,
Fairbanks, said he also sits on the Workforce Investment Board.
He supported SB 309 saying that apprenticeships provide the
direct linkage to on-the-job experience. He encouraged them to
support the programs that work and are already in place.
2:42:55 PM
MAX MIELKE, Business Manager, Plumbers and Pipefitters - Local
262, Juneau, supported SB 309. He said it is a fact that union
construction training programs are unsurpassed and some are
considered the best in the world. His contractors are on the
leading edge of new technology and innovative ways to get the
job done right and on time.
MR. MIELKE related how Local 262 saved every penny it could
until 2003 with the anticipation of some day having its own
training center. Before that, apprentices were always sent north
to either Anchorage or Fairbanks for training. In 2003, Local
262 purchased a 6,000 ft. office and training facility and now
has a fully furnished state of the art training center. More
could be done with more funding. He said that each member pays
$1.40 per hour for training. He said the Juneau shop could be a
hub to serve Southeast Alaska.
2:45:22 PM
BRET HELMS, Training Director, Plumbers and Pipefitters, Local
375, Fairbanks, supported SB 309 and said that he strongly
supported the training provided by jointly managed trade
apprenticeships. They provide a majority of the training in the
construction trade industry. He said he expects to enroll 150
more apprentices in his program over the next six years to
supply the increased demand from its contractors. The Department
of Labor and Workforce Development projects a 17 percent
increase by 2012 in the plumbing and pipefitting field. This
increase would only supply the current industry and does not
reflect the future gas line. Local 375's current training
facility has two classrooms and a small shop area, but it will
not be adequate for its future training demands.
MIKE ANDREWS, Director, Alaska Works Partnership Inc. (AWP),
supported SB 309 and talked further about the extreme shortage
of Alaskan workers. State figures show 20,000 construction
workers averaged about $59,000 in wages last year. Those same
figures predict a shortage of at least 1,000 workers to fill new
jobs. If that threshold goes up to 90 percent, Alaska needs
another 2,000 workers. Replacing retiring workers will require
another 7,000 to 8,000 workers - just to have a stable resident
construction workforce before consideration of a pipeline.
MR. ANDREWS said that training and placement services are needed
especially in rural Alaska and that's one of the main reasons
Alaska Works Partnership, Inc. was formed in 1986. It was
designed to connect all trade unions and their jointly
administered apprenticeship training programs into one system
that would reached out across Alaska regardless of union
affiliation or membership. Its programs have been proving
effective in moving resident Alaskans into construction jobs. In
the past five years it has helped 1,000 residents become
employed in construction - with a 68 percent retention rate.
2:51:57 PM
MR. ANDREWS said AWP had developed the Rural Apprenticeship
Outreach Program, a women operating in the trades program, a
building maintenance repair program, helmets to hardhats program
and pipeline training in Fairbanks that trains hundreds of
people every year.
MR. ANDREWS explained that the reason the jointly administered
programs are effective is because they have 21 trade
apprenticeship programs, 1,600 apprentices that are registered
with the federal government today or about 80 percent of the
trade apprentices in the State of Alaska. They have doubled that
in the last five years. A 2005 capacity survey indicated that
workers and employers contributed over $9 million to industry
training through their trust funds. He said that some of their
trainees end up in a union, but that is their choice.
He recapped that this year AWP has 125 building maintenance
repair apprentices building affordable housing in rural Alaska
and it trained over 100 persons for the Alaska Native Tribal
Health Consortium on Force Account projects building clinics and
village safe water projects in rural Alaska. It will help 120
high school youth through its construction academies and he
anticipates helping 70 veterans and 70 rural apprentices to get
employment this year.
2:54:33 PM
Regarding Senator Seekins' question about demographics, Mr.
Andrews said that primarily the age group of 22 to 24 years is
really interested in construction. However, younger people are
becoming interested because of the opportunities that are coming
up and the high wages. They also never knew about these
opportunities, which are not mentioned in the high schools.
An apprentice is hired for about half of the going rate. As they
advance they get paid more. However, there are job-training
programs that will subsidize the worker's wages if they are in a
registered apprenticeship program. AWP connects its trainees
with 780 employers who contribute to the programs and who hire
apprentices. They are not asking for any incentives even though
they are available.
2:57:37 PM
JOHN BITNEY, Alaska State Homebuilders Association, supported SB
309. He said there is a need for these types of workers in the
residential construction industry today. His organization found
it could place 90 people on job sites during a very short time
period. So, he didn't anticipate needing a wage subsidy.
2:59:29 PM
MIKE GALLAGHAR, Business Manager and Secretary/Treasurer,
Laborers Local 341, said he is also a trustee for the Alaska
Laborers Training and Apprenticeship Program. He supported SB
309. In 2005 Local 341 trained over 2,000 construction workers
and new apprentices and upgraded journeyman skills. It spent
$1.25 million on training and this year it expects to increase
funding by 25 percent. This is money coming directly from
employer and employee contributions. Local 341 trains in
Anchorage, Fairbanks, Valdez, Southeast Alaska, Kodiak and
Kenai.
3:00:55 PM
REBECCA LOGAN, President, Associated Builders and Contractors of
Alaska, supported the intent behind SB 309, but didn't like the
way it disbursed training funds. The first reason she opposed
the disbursement method is because it puts money into the hands
of trainers, which at first glance appears to be a reasonable
place to deposit training funds. But the real resolution to the
problem of a huge skilled labor shortage in the construction
industry is apprenticeship. Apprenticeship is a relationship
between the apprentice, the employer and the trainer. She
explained further:
In that relationship, it is the employer and only the
employer who has the ability to increase the numbers
of people being trained. If employers don't agree to
hire apprentices, new workers will not be trained and
yet every plan put forth to address this issue ignores
the employers or worse. At the beginning of this year,
Governor Murkowski signed an administrative order that
attempted to require employers to hire apprentices on
state jobs. On the recommendation of the State
Attorney General, the language was toned down to
suggest that they hire apprentices.
Why not give employers an incentive to hire
apprentices? Employers lose money when they commit to
hire an apprentice. They take on a new person with
little or no skill and begin to train them. The
production from the apprentice is low and in addition,
a journeyman is used to instruct the apprentice, which
can result in less production from an experienced
worker as they take on the roll of trainer. As the
apprentice progresses, this changes, but the initial
investment is a loss for the employer. If we truly
want to address the skilled labor shortage in Alaska
by increasing the number of apprentices, we must
encourage more employers to hire apprentices. This
grant could be used as a financial incentive that
would lead more employers to become involved in
apprentice training.
I appreciate what Mike Andrews said about the
incentive already existing in that when you hire an
apprentice, they are paid a lower wage. That has not
done it. Employers are still not willing to take on an
apprentice. I would guess that the unions would agree
with that as they are the ones who requested from the
Governor, the administrative order to try to force
people to take apprentices on. The lower wage is not
enough to incentivize employers to take on an
apprentice.
MS. LOGAN said the second problem she saw with the proposed
distribution method through the Department of Labor and
Workforce Development to the Alaska Works Partnership is that a
non-profit agency represents the building construction trade
unions and their federally registered apprenticeship programs.
But, Bureau of Labor statistics from 2005 indicate that only 30
percent of Alaska's construction workforce was represented by
organized labor. She asked, "Are we really going to take money
for Alaska's workers, most of whom do not belong to a union and
give those funds to a non-profit that only supports union
training programs?"
MS. LOGAN said that Mr. Andrews also mentioned that most of
their training is of non-union workers and she agreed, because
he doesn't run an apprenticeship program, but rather a pre-
apprenticeship training program whose people are steered toward
the unions. Last year her apprenticeship program received 800
applications and not one of them came from the pre-
apprenticeship program that AWP ran. Further she said:
As recently as 10 days ago, the Alaska Works website
listed communities in Alaska and the numbers of
workers available in those communities. The same page
indicated that only employers signatory to a union
could access those workers. That page no longer
appears on the website, but I'm quite sure that that
philosophy has not disappeared.
Limiting training funds to such a group greatly limits
the number of people who can be trained for jobs in
the industry and again be trained for apprenticeship
jobs in the industry. And it's not the best use of
training funds.
It is also discriminatory legislation and not
responsible legislation. I strongly suggest that you
amend SB 309 to put training resources in the hands of
those who can actually increase the number of people
that are being trained through apprentice programs -
the employers. I would also suggest that you amend SB
309 to insure that any funds taken for this grant are
distributed equally between the union and nonunion
workforce.
3:05:58 PM
CLICK BISHOP, Apprenticeship Coordinator, Alaska Operating
Engineers Training Trust, supported SB 309. He related how he
met with the Governor and industry people last year about
manpower needs in the state. At that time, BP rolled out its
needs for the pipeline to be 600 side boom operators. He said
that's too big a bite for any one entity to take on by itself
and he thought industry, labor and government should come up
with a way to do it together.
He related how he went to Caterpillar's proving grounds in
Tucson a week ago to preview and operate the next generation of
pipe layers. Over 100 other contractor representatives were
there from the Lower 48 and other countries around the globe.
The main consensus of that group was that there is not enough
skilled people and not enough equipment. At the end of the
demonstration, a Caterpillar representative asked him if he
could help with pipeline training. He concluded that:
It's the prudent thing to do for us to step forward
here with SB 309 - all of us here at the table - to
move forward to meet the needs in the upcoming years
for the shortage of skilled workers.
MR. BISHOP related that he has an average of 500 people pick up
applications every year - about 260 come back completed. "We've
got the people here. We just need to train 'em."
CHARLES JURGENS, District 7 Representative, Operating Engineers,
Fairbanks, said he was also a trustee of the Operating Engineers
and Employers Training Trust. He supported SB 309.
BOB MORIGEAU, Operating Engineers Local 302, Fairbanks, also
supported SB 309. He said, "This is something that is needed for
all classes of the trades." He especially supported Commissioner
O'Claray's commitment to 90 percent Alaska hire. He also thanked
Governor Murkowski for signing Administrative Order 226 that
required 15 percent of heavy equipment hours be performed by
registered apprentices or trainees. He related that he has
approximately 150 apprentices in his program in Alaska. Between
Alaska and Washington the number is at 300. Thirty to forty
trainees are presently being trained at its apprenticeship
school in Palmer and the school has an abundant amount of
applicants every year. Unfortunately, many of those have to be
turned away because they don't have the positions to fill every
year. Training is only half of the problem; putting them on the
job so that they are not sitting at home after being trained is
the other half of it.
SENATOR THERRIAULT asked if he was turning away people for his
apprenticeship program.
MR. MORIGEAU replied that Local 302 only trains the number of
people it thinks it can put to work.
3:16:00 PM
VINCE BELTRAMI, Statewide Training Director, Alaska Joint
Electrical Apprenticeship and Training Trust, said his program
is a joint labor/management trust and is one of the largest and
most successful training programs in the state and has existed
since the mid-1950s. It enjoys a better than 90 percent
completion record and is a 100 percent Alaska hire operation.
The Trust has over 400 apprentices registered in various
classifications of the electrical industry from electricians to
power linemen, telecommunications workers and power plant
operators. In addition, it trained over 800 in journey-level
upgrade classes last year. More that 100 employers statewide
contributed nearly $2 million last year to its program.
MR. BELTRAMI explained that its apprentices receive 8,000 hours
of on-the-job training and a minimum of 280 hours per year of
instructor-lead curriculum. The teachers are journey level
workers who regularly attend annual training at the University
of Tennessee. Many have several years of management experience
in the trade. The Trust has two state-of-the-art training
facilities in Anchorage and Fairbanks. It invested $2.3 million
to construct a new training facility in Anchorage in 2000 and is
doubling the Fairbanks facility - all without any public funding
assistance.
He supported SB 309 because it would insure that the Trust is
better able to serve the needs of the state by expanding its
ability to train even more workers to be prepared to deal with
the increased construction activity in the state as well as to
further augment an aging construction workforce.
MR. BELTRAMI said if there were any amendments to this bill, he
would like to see distribution of funds not be based on union or
nonunion status, but on measured performance and the investment
that has been made in the industry.
3:19:12 PM
DAVE McCLURE, Executive Director, Bristol Bay Housing Authority,
said he is also Chairman of the Board for the Southwest Alaska
Voc-Ed Center that is located on the King Salmon Air Force Base.
He totally supported SB 309. His partnership with Alaska Works
is strong and the training has provided opportunities to over
100 individuals to move out of the economically troubled fishery
to new employment opportunities statewide. He mentioned that
Bristol Bay is a nonunion employer.
3:20:39 PM
CHAIR BUNDE remembered the old student loan program where the
money went to the education provider and then the students who
were rather divorced from the process and it wasn't important if
they showed up or not - the trainer just collected the money and
had little concern about the future employability of the
trainee. He asked Senator Therriault if he had given thought to
creating something like a voucher program where the money went
with the student. The there might be some incentive for him to
stay in the program.
SENATOR THERRIAULT indicated that he would consider that idea.
CHAIR BUNDE said he would set this bill aside for a later
hearing.
SENATOR THERRIAULT wanted a list of trades that needed
professional training, because he hears from trainers that there
is a limitation on where to put trainees.
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