Matt and Mike Pestronk, the brothers who together own Post Brothers Construction, did something considered impermissible in Philadelphia. They started renovating a large building in Center City without using 100 percent union labor.
The $38 million project to convert the rotting Goldtex shoe factory into high-end loft apartments, riled labor leaders after the brothers proposed hiring only 40 percent union tradesmen, saying that going all-union would have scuttled the project financially. Negotiations fell apart and the property, just a stone’s throw from the Reading Viaduct at 12th and Wood Street, has been transformed into a fortress of a construction site as skirmishes between developers and union protestors have escalated–garnering increasing publicity in the process.
But the high profile of the project has made the Goldtex building emblematic of a larger struggle, as the formerly unchallenged union dominance of the city’s construction trade is now called into question. Wage and benefit demands–with political support and project-crippling protest tactics to back up those demands–that for decades were simply regarded as “the cost of doing business in Philadelphia” have been flouted by a couple of 30-something Drexel University alumna.
As work inches forward at a fortified Goldtex, the weeks of protest have rolled by with no clear resolution. But even the current protracted stalemate suggests that trades’ strong-arm tactics and political allies may not be what they once were. Perhaps more importantly, the Post Brothers’ strategy begs a question: has it actually become cheaper to fight the unions than to hire them?
The Pestronk brothers have gone so far as to create a website with videos they say show union vandalism and intimidation tactics, as well as a list comparing the union’s average wage of $64 an hour with lower union wages in Washington DC. The Philadelphia Building and Construction Trades Council, which represents an array of different trade unions, believes this is part of larger “crusade” by the Post Brothers to destroy the union’s “way of life,” said business manager Pat Gillespie. He rejected comparisons to Washington DC, a place where he said interest groups had “broken the back of the union.” Gillespie added that union wages are set relative to each region’s average cost of living. (Washington’s cost of living is almost 25 percent more than Philadelphia’s.)
He said the unions negotiate with every developer to work out a labor cost that works for everyone involved. “If you asked me, $100 an hour isn’t enough, but we balance that with what a project can afford,” he said, noting that in the past, the trades have taken 10 percent pay cuts on projects to secure work.
“We do that all the time, we need these projects to live, like oxygen,” said Gillespie, adding that union productivity makes up for increased costs. “We have the most productive workers in America,” he said.
He says reasonable negotiation never took place with the Post Brothers, and claimed that their inability to reach an agreement on the use of union carpenters led to a strike by all the other skilled trades that had agreed to work the project. Gillespie believes this was the Pestronks’ intention all along, calling them “disingenuous” for now claiming that the unions turned down a reasonable offer, accusing the Post Brothers of “picking a number out of the air” and saying it was too expensive.
“I think it’s very odd that the problem was with one of the more economical organizations (the Carpenter’s Union), where people often tell the other trades to mirror them, because of how cost-conscious and efficient they are,” said Gillespie.
Perhaps a reflection of how acrimonious the dispute has become, Mike Pestronk said even Gillespie’s basic characterizations of the initial negotiations were “not accurate at all.” He said that Post Brothers had had positive negotiations with all of the individual trades groups on running a mixed shop at 12th and Wood, with 40 percent of labor going to all-union crews and the rest to contractors “who have worked with the unions and typically have mixed crews with some union and non-union.” He said he was later approached by Gillespie’s organization, who demanded the project “become all-union or they were going to do everything possible to stop the project.”
Why not go all union? “Simply cost,” said Pestronk.
“There would be no project if it had to be [all union]. The costs for the wages they want through negotiation are more than 50 percent higher than what the fair market demands,” he said, adding that all union labor would have put building costs at some “$300 per square foot,” more than double the Philadelphia average and a rate seen only on completely subsidized projects like public housing.
After rejecting the Council’s demands, said Pestronk, “we started getting calls from the union subcontractors who we were awarding the project to saying ‘our union is telling us we can’t work on your site’.” Post Brothers was forced to replace all the subcontractors with non-union workers in order to continue construction.
“That was when the picketing and protesting really escalated,” he added.
Union protests have become more common in the city as the flagging economy has increased unemployment in the construction trade. Non-union sites that normally would have been too small to be worth protesting, like the Milkboy Cafe at 12th and Chestnut, have become targets. The Goldtex site was simply too big to pass up. Picketers appeared at 12th and Wood as well as a separate Post Brothers development on Rittenhouse Street in Germantown that had been under construction with a mixed crew. The Pestronks say the union produced sexually explicit flyers featuring one of their wives, threw bottles of urine at their equipment, and have posted security videos online that show a masked man–allegedly a union supporter–dumping what appears to be oil on the site’s entrance ramp. Others show a crowd of union protestors scuffling with the site’s security guards. Union representatives maintain that they did nothing illegal, and accuse Post Brothers of staging acts of vandalism and editing videos to make the protestors seem like the aggressor.
“I would say it’s the ultimate case of the pot calling the kettle black, I can’t count how many times our guys have been threatened, had tires slashed and windows broken. These guys are violent thugs,” said Mike Pestronk.
After several weeks of accusations of vandalism, assault and provocation by both sides, the Pestronks requested and received a restraining order that keeps protestors 45 feet away from the site’s vehicle entrance at all times.