The Multinational Monitor



Housing the Workers

by Samantha Sparks

BOSTON--On a hot and humid August Wednesday, four union members just off the afternoon shift at some of Boston's ritziest hotels gather in the weathered conference room of the Hotel Employees and Restaurant Employees Union (HERE), Local 26. The workers need better homes and they've turned to their union for help.

Finding a decent place to live at an affordable price is difficult for nearly everyone these days. But Local 26 has made worker housing a central concern. It has begun an aggressive campaign to help members make better use of existing public assistance programs, and plans to use $13 million from its own pension fund to start building new houses for some of its workers within the year. Setting a national precedent, Local 26 last year persuaded employers to create a $1 million trust fund to be jointly managed by the union, to help pay the cost of workers' homes. If the fund goes forward successfully, the Boston local believes it could serve as a model for other unions whose members are struggling to pay for their homes.

The local's victory on the housing fund is all the more remarkable because it is illegal under federal law. Under anti-bribery provisions of the Taft-Hartley amendment to the Labor Management Relations Act of 1935, Congress must authorize the creation of such joint management-labor trusts. In recent years, Congress has authorized funds to pay for about a dozen programs including education and legal services. Local 26 wants to add housing to the list.

Technically the move would be straightforward. But key congressional sources and the legislative director of Local 26's parent union oppose the move. They fear that amending Taft- Hartley to allow for the housing trusts will invite attempts by labor's foes to add restrictive amendments at the same time.

Consequently, the fate of the housing trust appears increasingly uncertain. It's clear that the Boston union's brazen--and some say poorly planned--move has upset labor's power-brokers in Washington.

Ernie DuBester, who works on legislative issues for the AFL-CIO, refused any comment on the pros and cons of a move to amend Taft-Hartley, saying the union had yet to work the issue out with its international. But Bob Guliano, Legislative Director of the HERE international bluntly says "No" when asked if he is prepared to back Local 26 in its efforts to amend Taft-Hartley. Guliano told Multinational Monitor, "Domenic [Bozzotto, Local 26 president] is running his own show." He added, "There's other ways to get this thing done. I don't know if his interest is just to come out of this looking good or to get the thing done."

"We have absolutely no guarantee" that conservative forces would not seek to add further restrictions, Guliano says. "There could be a very pernicious, heavy-duty amendment" introduced that would hurt labor as a whole. Jay Harvey, labor aide to Sen. Edward Kennedy, the Massachusetts Democrat whom Local 26 hopes will sponsor the change in the law, says he would like to help but that he has similar concerns.

Guliano said he is looking into the possibility of amending other parts of the nation's labor law, parts which might be less prone to anti-labor additions than Taft-Hartley but would nonetheless provide Congressional approval of employer subsidies for workers' housing costs.

Obstacles to creating housing trusts with management go beyond legal constraints. Unions with a geographically scattered membership, or industrial unions which negotiate separate contracts at each plant, for example, might find it impractical to establish housing trusts, officials say.

If Congress fails to amend Taft-Hartley by June 1990, the $1 million in employer contributions for housing will go into the union's health and welfare fund instead. Housing costs cannot be covered by that fund.

In its uphill battle to establish the housing trust, the Boston local won the first round on its home turf. But the next round will take place far from Boston, in the backrooms of Congress where even simple changes can be complicated.

Local 26 officials say they knew taking on Taft-Hartley would be hard. They acknowledge that they could have found an easier way to use employers' money to help defray workers' housing costs. But they refuse to back down, insisting that amending Taft- Hartley is the best, if not the easiest, way to ensure that management accept responsibility for the problem.

"A joint trust is clearly the strongest possible way to assure that management put its weight on the line" for workers' housing needs, says Bozzotto. He dismisses alternative ways of using management money for worker housing as "stutter steps" that would not create strong enough incentive for hotel owners to help workers find affordable housing. "We picked a tough fight," Bozzotto concedes. "We understand that Congress is scared because they don't like to see change. But to walk away now would really prostitute what we have won."

Bozzotto and Bruce Marks, a Housing Director for Local 26, are confident that a mid-September lobbying spree--some 11 months after they won the contract--will win them not only bipartisan Congressional support, but the backing of the Bush administration as well.

But if Local 26 cannot win the support of its own parent union, it seems certain it will not win the broad backing from the rest of organized labor needed to amend the national law.

Whatever happens with Taft-Hartley, Local 26 has pushed into the national arena a problem that is confronting a growing number of workers around the country today. Housing costs in many cities have skyrocketed this decade, and the problem has been compounded by a roughly 50 percent cut in federal housing assistance during the eight years of the Reagan administration. State and local aid has increased but does not compensate for the national cuts. Since 1980, the number of people owning their own homes has fallen for the first time in 30 years. "Affordable housing is a major concern for this international, and it's a nationwide [problem]," maintains Guliano.

The housing crisis in Boston is particularly severe. The city's economy boomed in the last few years but most of the investment in housing has gone into luxury buildings, at the expense of apartments for low- and middle-income earners. According to Local 26, the city has sold 20,000 apartments in the past eight years, mostly for conversion into condominiums. Ironically, the big investors are the hotel companies that employ many Local 26 members. These hotels are in turn backed by powerful insurance companies and developers.

With luxury housing squeezing out affordable homes, housing costs in Boston have risen rapidly. Wages have not kept up. A recent survey by the National Association of Realtors compared home prices to wages and found that Boston was among the worst of 29 metropolitan areas throughout the country. Meanwhile, one fifth of Boston households were paying more than 50 percent of their income for rent in 1985, nearly double the number doing so in 1980. Federal guidelines suggest that no more than 30 percent of income should go toward housing.

These developments have hit Boston's hotel workers hard. Based on a survey conducted in 1988, Local 26 says that even though more than half the families in the union include two or more wage-earners, 98 percent of members cannot afford to pay the roughly $160,000 which an average home in the area cost in 1986. Seventy-eight percent are unable to meet the $439 per month rent of a median-priced, regulated apartment in 1987. Three-quarters of the local's members reported problems with housing, including over-crowding, bad conditions and threats of eviction.

Local 26 argued that Boston's hotel corporations have a vested interest in helping to resolve these problems. The essence of its claim was simple: hotels need workers and workers need housing. A shortage of workers would deflate Boston's booming tourist industry, the last thing the hotel owners want. The union argued that by helping the workers to find affordable homes, the hotel corporations end up helping themselves.

The union noted that helping employees find affordable homes is something that many U.S. corporations have done for years. The only difference is that until now, the assistance has been directed mainly at senior executives rather than the rank and file. In Boston, some top officials of insurance companies, such as John Hancock and Prudential, both of which own city hotels, have received home financing from their firms, according to the union.

Local 26 also contended that the hotel industry had a particular responsibility to help workers with the housing crisis because the hotel corporations helped to create the crisis. Several of the city's hotel owners are also major players in the Boston real estate market, and have invested millions of dollars in the development of luxury housing.

The fight to force Boston's nine unionized hotels to contribute a nickel per hour per employee to the housing fund became the key issue in the union's 1988 contract talks. The owners did not yield until a strike deadline had passed and workers were poised to hamstring hotels on the eve of a major national business convention. Four other hotels which abide by the union's contracts agreed to put up money as well. Peter Van Kleek, president of Saunders Hotels, a major Boston chain, wrote Sen. Kennedy in March 1989 to endorse the local's drive for a change in federal law. "Housing is one of the most severe problems many of our employees face and I am very supportive of any effort to assist our people in finding affordable housing," Van Kleek wrote.

The union's victory was especially impressive given the economic diversity of its 5,000 members and the differences in their jobs. About half of the local membership is female, about two thirds are minorities and many members are non-English speaking immigrants. Salaries range from the $50,000 a door attendant can make, to the $16,000 salary a dishwasher earns. The housing trust fund would benefit mostly the lower-paid workers--the maids, housekeepers and dishwashers who work virtually unseen by the hotels' guests. But even those on the upper end of the pay scale--the door attendants, bellhops, waiters and waitresses-- appear to support the idea of the housing fund.

Chris, a doorman at the Copley Plaza hotel, is a young white man, born and bred in Boston. He doesn't expect to benefit from housing assistance himself because he makes too much money. Nor does he know much about the upcoming Congressional battle over the housing fund. "I think it's supposed to help the people who work downstairs," he says. But he adds that he believes in the union leadership, particularly Local 26 president, Domenic Bozzotto. When asked if he would have gone out on strike if his employers had refused the union's demands, he says, "Oh, sure. I think Domenic is doing good things."

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