State of the Union

At a time when union membership in the United States is declining, the Service Employees International Union (SEIU) is growing — and at a rapid pace. SEIU has more than 1.8 million members today, adding 400,000 members since 2000, making it the largest and fastest-growing union in North America. For more than two decades SEIU’s Justice for Janitors movement has united low-wage cleaning employees across the country. With more than 225,000 janitors and security personnel, SEIU is the largest property services union.

Besides recruiting new members, SEIU has been mounting impressive campaigns to better working conditions for low wage employees. For example, SEIU recently completed one of its most successful campaigns in Houston, where in 2005 more than 5,300 janitors joined the union. Last year, those janitors won higher wages, longer hours and affordable healthcare in their first city-wide union contract.

In addition to Houston, other campaigns have included Miami, where at the University of Miami hundreds of janitors won the right to join SEIU, and the Twin Cities, where more than 4,200 janitors won a better contract offering new benefits. Currently 165,000 unionized service workers in Indianapolis, Columbus, Ohio, and Cincinnati are working to negotiate new contracts.

SEIU doesn’t plan on decreasing activity anytime soon. It is SEIU President Andy Stern’s goal, by working alongside four other unions, to recruit the remaining 90 percent of American workers who don’t belong to a union. With such a flourish of activity, it may be only a matter of time before SEIU comes knocking on your door. If you’re hesitant about becoming a union contractor, familiarize yourself with the issues SEIU is fighting for and the markets they are currently targeting, and try to make the changes on your own terms.

However, joining a union could have positive effects — like lower turnover — for building service contractors, especially those losing business to lowball bidders and illegal subcontractors. Unionization can help put competitors on an even playing field while giving employees better opportunities.

“Most people fear the unions, but they are in business just as we are,” says Guy Mingo, CEO of Marsden Holding, LLC, St. Paul, Minn. “They are looking to grow their membership.”

Markets
SEIU targets its campaigns to workers in need of a change. The union maintains the attitude that simply put, any city where wages and benefits are low is a potential target for SEIU, says Lynda Tran, spokesperson for Justice for Janitors.

That said, there are criteria that SEIU will evaluate before initiating a campaign. Generally, SEIU favors cities that have a history of property service unions, such as Chicago, New York and Los Angeles. They will also look at cities with national and regional companies servicing the majority of the market. The likelihood of a campaign is increased if these companies have union workers operating in other cities.

“SEIU members know the best way to protect and continue to make improvements in their own jobs is by lifting standards for other workers employed by the same contractors and whom clean buildings owned by the same building owners as they do,” says Tran.

One of SEIU’s current goals is to unite other property services besides janitorial and security, for example, maintenance, landscaping and parking, says Tran. SEIU is discovering that these services are often provided by cleaning companies, many of which already have unionized employees. With diversification a prominent trend in the cleaning industry, building service contractors offering services besides janitorial face greater odds of unionization.

Regardless of what city or market SEIU targets, it will always try to unionize the majority of the marketplace, not individual contractors. For example, when SEIU campaigned in Houston, the five contract cleaning companies they unionized represented 72 percent of the marketplace, says Tran. It’s a lesson SEIU learned more than 20 years ago, from janitors who would only unionize in a majority.

Unionizing the majority of the market also helps keep the playing field fair for contractors. Without a majority, union contractors would be at a disadvantage to non-unionized companies who could provide cheaper labor because they aren’t forced to pay higher wages and provide benefits to their workers, says Michael Mahdesian, chairman, Servicon Systems Inc., Culver City, Calif.

“The differentiation then becomes the quality of service,” adds Tran.

Issues
In its recent campaigns, SEIU has been fighting for the same issues: higher wages, longer hours and affordable healthcare for all workers. These demands are not new, but economic conditions have worsened, making the case for these demands even stronger.

“We are at a time when people at the bottom of the ladder are doing worse than ever,” says Tran.

A part-time janitor working four hours per night, five days a week, at the current minimum wage earns only $4,356 a year. With such a low income, employees are forced to work more than one job. This scenario can have unfortunate consequences for their employers. For example, employees may be tired from their first job when they arrive at their cleaning position, which can lead to more work-related injuries, or it could cause family problems at home, which can create higher absenteeism, says Mahdesian.

SEIU is trying to rectify this situation by pushing for longer working hours or more full-time positions, in addition to higher wages.

“If workers are willing to put in 40 hours per week, they at least should be given a wage that covers their basic cost of living and the ability to support a family,” says Mahdesian.

So far, SEIU has been getting results on these issues. In Houston, janitor wages will increase by 126 percent over four years. By January 1, 2009, janitors will make $12,090 a year (due to an additional increase in hours) — more than doubling their income. In the Twin Cities, the new contract with SEIU resulted in nearly 300 new full-time positions.

By creating more full-time positions, SEIU can also make an easier case for employers to provide affordable healthcare — another driving factor of recent campaigns. Providing a healthcare plan to one full-time employee is a cheaper option than to two part-time ones, says Dick Dotts, president, Diversified Maintenance Services, Los Angeles.

Rising health care insurance costs are affecting all businesses, union or not. Employees are facing either increasing rates or decreasing benefits. According to SEIU, by expanding coverage to low-wage workers such as janitors, it will help ease the burden on public hospitals and taxpayers.

SEIU believes that if building service contractors increase wages and give benefits, employees will stay longer because they appreciate having a good job, says Tran. Dotts agrees.

“There is more stability to a workforce with higher wages,” he says. “In a non-union environment, people tend to move for nominal amounts — a quarter, dime, nickel, whatever. They are continually seeking higher wages.”

With lower turnover, the quality of service should improve, which leads to greater customer satisfaction and client retention, says Tran.

Avoiding unionization
If BSCs are not interested in joining a union, there are ways to avoid it. The most effective method is to treat employees fairly and provide wages and benefits that are equal or better than the union wages in that market, says Mingo. Another way is to refrain from operating in union-controlled markets when expanding business into new cities or states. However, this means possibly restricting a company’s growth, says Mingo.

If BSCs can’t avoid unionization and are targeted, before they fight they should consider what’s at stake: legal costs, being distracted from running the business, changes in workforce morale and a possible loss of customers, says Mingo.

“Before you decide to put up a fight, have all the right reasons for doing it,” says Laurie Sewell, executive vice president of Servicon Systems. She adds that after BSCs spend their money and time fighting the union, they could lose and still end up joining.

Perhaps the biggest concern for BSCs is the danger of losing accounts during a fight against the union.

“Customers do not like the unknown,” says Mingo. “They will be concerned as to your company’s ability to service their facility during a strike, the negative press or impact to them and their owners.”

In many campaigns, SEIU and Justice for Janitors will put the pressure on BSCs’ customers to convince them to unionize, says Dotts. In Houston, representatives of major downtown office buildings who had contracts with the targeted cleaning companies voiced their approval for higher wages and healthcare benefits for the people who cleaned their buildings.

To help ease customer concerns in the event of a strike, managers should have clear directions on how to handle questions from both the workforce and their customers, says Mingo, and communication should be frequent and consistent.

After weighing all issues, if BSCs feel they’ll lose more business by unionizing, then they should fight it, says Mingo. However, if the reverse is true, then BSCs should try to take a non-confrontational attitude during negotiations, which will help establish a worthwhile relationship with the union, says Sewell.

A contractor’s relationship with a union is just like any other business partnership. Both sides need to establish a level of trust and understanding, says Mahdesian. Unions will listen to contractors’ concerns and won’t force issues that put union contractors at a disadvantage to non-union competitors, he adds.

SEIU shows no sign of slowing down its campaigns. With the lofty goal of organizing the nine out of 10 workers non-union workers in America, chances are BSCs will be faced with the choice of unionization sooner rather than later.