Merced County Times Newspaper
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The Next Building Boom: Who will reap rewards?

The Central Valley’s ample space and existing transportation infrastructure made it a natural choice for distribution centers, and today the valley boasts one of the largest logistics workforces in the entire country.
The Central Valley’s ample space and existing transportation infrastructure made it a natural choice for distribution centers, and today the valley boasts one of the largest logistics workforces in the entire country.

Local union members are calling attention to what they say is an unfair public contracting system that disadvantages local workers.

Much of the concern has been driven by the e-commerce boom, which accelerated during the pandemic as lockdowns encouraged people to buy goods online. The boom in internet shopping created a huge demand for the construction of distribution centers and warehouses to manage the shipping of these goods throughout the state.

These structures have to be built by somebody, but local union members are saying that increasingly contracts are being awarded to large contractors, many of whom are located out of state and don’t have ties to the region. Tradespeople are concerned that the low cost of these contractors are coming at a high price to Central Valley communities, including Merced.

“We’re giving away the farm with nothing in return to us,” said David Rivas, senior field organizer for the Nor Cal Carpenters Union. “It’s a race to the bottom for the contractors, and we can’t compete.”

Much of the union’s concern revolves around pre-qualifications, or the lack thereof, inserted into public contracts. Pre-qualifications would require large contractors to offer benefits to workers in return for building the backbone of the e-commerce system. Examples of pre-qualifications include requiring contractors to provide healthcare, 401k contributions and establishing safe working conditions as a condition of being awarded public contracts. Without these pre-qualifications – called pre-quals in the industry – union members say that the benefits of all the economic development in the region will stay in the hands of the developers, leaving workers behind.

“The attitude is: anything to keep Merced residents working. But there’s no standards. It’s a free open market, which they have the ability to do. But morally, do we feel like it’s right?” Rivas said. “When you give everything away and you sell the farm to bring in a multibillion dollar corporation like Amazon or Alta, the residents of Merced should be able to benefit from that.”

The Central Valley has become a critical player in the state’s e-commerce industry. Sky high real estate prices in urban areas like Sacramento and the San Francisco have made building large-footprint warehouses there impractical, but in the case of the Bay Area, corporate executives only had to look 50 miles east to find the solution. The Central Valley’s ample space and existing transportation infrastructure made it a natural choice for distribution centers, and today the valley boasts one of the largest logistics workforces in the entire country.

Stockton, with its deep-water port, Class I railway lines and proximity to Interstate 5, has become a shipping and distribution powerhouse. And the greater San Joaquin County boasts the second highest number of transportation and logistics jobs, second only to Laredo, Texas.

The trend started in the mid-90s, and has only accelerated in recent years. Recent arrivals include AutoZone, which is building a $150 million distribution center in Chowchilla, and Ace Hardware, which is constructing a one million square foot distribution center in Visalia. Rivas said that it is only a matter of time before the growth hits Merced County.

“Merced’s gonna blow up because of things like the High Speed Rail and Valley Link, regardless of the naysayers,” said Rivas. “These are going to come. They’re already coming. It’s the way California’s going.”

The Nor Cal Carpenters Union has 38,000 members, with more than 1,000 of those living in Merced County. Some of the union’s members showed up at a meeting of the Merced County Board of Supervisors last month, petitioning local officials to negotiate smartly with contractors so that local residents benefit from development. The union is also pushing for pre-qualifications which would require funds for apprenticeships, establishing work programs for young people who want to enter the trades.

“We have a handful of youth that have a strong passion for physical, hands-on labor,” Alex Herrera, also a member of the Nor Cal union, told county supervisors. “We want to educate our youth and let them know that you can have a great career as a construction worker with area-standard wages and benefits and a retirement with a great pension. We don’t want to discourage them by telling them that the only way that’s possible is by going over the Altamont.”

The feeling among some local construction workers is that tradespeople have been forgotten in recent years.

“The threshold for a carpenter and their pay here is super low. It’s been driven to the bottom for decades,” said Rivas. “My grandfather was a union carpenter here. My father was a union carpenter here in Merced. That market that they worked in no longer exists.”

The demand from local tradesmen is simple: “Build what you want, but do it with someone who offers a pension and healthcare, and wants to give back to the community,” said Rivas. “Something other than just a rock bottom wage.”

 

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