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May
2014
30

Union Workers Being Wrongly Blamed for Insane Cost Markups on Philly Convention Center Job

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In Philadelphia, union workers at the Pennsylvania Convention Center are becoming scapegoats as large global companies mark up labor costs using what they call a “standard industry practice.” Philly.com reports that union riggers setting up last week’s National Homeland Security Conference earned $152.25 a piece when in reality they earned $35.11 an hour ($59.70 when union dues, pension, and health insurance benefits are included).  

The discrepancy? A markup, by the companies which act as middlemen, of nearly 2.5 times the original wage.  

John Dougherty, Business Manager of International Brotherhood of Electrical Workers (IBEW) Local 98, told Philly.com, “layers of costs create an impression of higher labor costs” when in fact the workers are only taking home a fraction of the published figure.

The middlemen, known as decorators, add this markup to offset costs such as storage and trucks for items that get to the convention center early.  While the necessity of their cost additions is debatable, one thing is for certain: Union labor is taking the brunt of the PR flak.

Ira Rosen, assistant professor at Temple University’s School of Tourism and Hospitality Management, is a convention producer in Philadelphia. He recognizes the blame is misplaced:

Everybody marks everything up. Everybody focuses [on] ‘Oh it’s the union’s fault.

“I do think the end-user believes [the worker] is taking home $170, $160 an hour,” he said. “And they are thinking, ‘This is crazy. I don’t pay my doctor $170 an hour.’ “

Now several parties, the unions included, want to see the convention center review its policy on labor markups:

“I would like to see more transparency and as much cooperation from the decorators as we have in the labor market,” said IBEW’s Dougherty.

Gregory Fox, the lawyer who chairs the Pennsylvania Convention Center Authority board, said a better understanding of decorator billing practices was next on the board’s agenda.

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