‘Sweatshop Contractors’ and an NYC Development, UW Invests $90 Million
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By: The Nightly Crew
7/5/2023
Organizers from the Cement and Concrete Workers’ District Council Speaking With Construction Workers in New York City. Photo Courtesy of LIUNA Cement and Concrete Workers’ District Council LECET.
Large financial institutions like the Baupost Group use investments to fund real estate development. Among Baupost’s developments is Clarkston Square, a luxury New York City high-rise. The project is slated to be completed using ‘construction sweatshop’ labor and the University of Washington is set to profit off of the poor labor practices as UW invests $90 Million in the Baupost group.
We sat down with Ed McWilliams of the Laborer’s International Union of North America’s Cement and Concrete Workers District Council in New York who are organizing against the Baupost group’s sweatshop labor to learn more.
“We represent the cement and concrete workers who work predominantly on private sector construction of reinforced cast-in-place concrete superstructures, that’s what you see in the skylines of Manhattan and these big cities” - Said McWilliams. “We handle very heavy material, coordinate with the other trades, and place the cement and the concrete. It's very physically demanding work.”
Among one of the most pressing issues that concrete workers are facing are deteriorating working conditions. They are forced to endure these conditions at lower and lower wages, allowing for more profit to be extracted from working people’s labor.
“It’s not sustainable and there's no social responsibility.” - McWilliams told the Nightly. “What they're doing is investing in and then driving the growth of what we call ‘construction sweatshops.’ People earn low wages, there's a lack of healthcare, and there’s no social safety net. These contractors have no regard for labor and will not consider entering into collective bargaining agreements.”
These construction sweatshop contractors include three bidders for the project that have a track record of wage theft and workplace safety violations.
RNC Industries is one of the bidders that the union wants removed from the bidding list. RNC’s owner, Richard Tonyes, has twice plead guilty to felonies related to the construction industry, repeatedly failing to pay workers overtime. Another bidder, Trident General Contracting, attempted to steal over $76 million dollars in benefits from its employees.
Highbury Concrete, another bidder is infamous for significant workplace safety violations, resulting in serious harm to employees. In one instance, 9 workers were overcome by Carbon Monoxide exposure on a Highbury job site as a result of a gasoline-powered generator running in a confined space. In another instance, an employee died two days before Christmas when he fell three stories down an elevator shaft.
“The non-union employers do not participate in apprenticeship programs or have any formal training facilities for their employees. The unionized employers make formal contributions to training facilities.” - McWilliams told the Nightly. “A big part of it is health and safety training, scaffolding, crane signaling. That's part of the culture of the responsible union contractors to finance and participate in ongoing training, not just in apprenticeships but throughout their careers.”
Because of the lack of proper safety training, non-unionized contractors have more incidents and deaths than unionized contractors. A report published by the New York Committee for Occupational Safety and Health found that 92.9% of construction workers who died on private worksites were working for non-unionized contractors.
In addition to workplace safety violations, these sweatshop contractors aim to provide no benefits and minimal labor compensation. McWilliams continued, “Essentially what they are doing is shifting the cost of healthcare and social services from the developer onto the city and the state who are already struggling with their budgets. In a way, it’s almost an unlegislated tax break that they are getting. If they can put 300 people on that job and not provide benefits, that’s really a big burden on cities across America.”
Behind these labor violations and cost-cutting measures is the drive to extract more profit from worker’s labor for the hedge fund. “From the conversations that we’ve had it seems to be Baupost that is steering Tishman (a middle-man contractor) towards these non-responsible contractors to raise profit margins.” - said McWilliams, “You know if you don’t do safety training, provide healthcare, or provide retirement benefits, it will be cheaper.”
McWilliams went on to explain that the hedge funds’ actions are directly harming marginalized communities as “the majority of the workforce that will be exploited are vulnerable populations and people of color, (and) those are going to be the populations that ultimately pay the price and increase the profits for these hedge funds.”
What Can We Do at UW?
The UW has a checkered history with divestment and sanctions. In the early 2010s, students successfully organized to kick Sodexo, a food-service company infamous for union busting off the campus. This was not without a fight as countless students were arrested and harassed by UWPD back then. Another campaign highlighted the fact that HFS furniture was made from prison labor, fighting to stop the practice. More recently many students have been fighting for the divestment from fossil fuels and the decarbonization of the campus.
“We think that labor and the workforce in America is as important as the climate issue” - said McWilliams. “I’d like to see the students at the UW and around America to be more vigilant on how these university endowments are investing their money.”
Looking at UW’s investment into the Baupost Group, there are many similarities to previous divestment and sanctions campaigns. When interviewing McWilliams, he reiterated how important action from the University of Washington is at this moment. “Are they acting socially responsible, and to what benefit is it if these endowments are driving poverty? We would like to see some activism in how those investments are being used … (UW’s) money should not be used to drive wages lower and put working families in difficult economic situations.”
UW Investment Company (UWINCO)
All of this comes within the context of UW’s problematic investment system. Investments are governed by the UWINCO board. Among the board, two members ought to be mentioned: Micheal Larson and David Bonderman.
When not on the UWINCO board, Larson is the portfolio manager for Bill Gates and the Bill and Melinda Gates Foundation. Larson gained attention in 2021 for creating a “culture of fear” among his employees. According to The Guardian, Larson “judged female employees on their attractiveness, showed colleagues nude photos of women on the internet and on several occasions made sexually inappropriate comments.” On another occasion, Larson “made a racist remark to a Black employee.”
UWINCO board member, David Bonderman, was forced to resign from the board of Uber after making sexist remarks against women in the workplace. Despite this, Larson and Bonderman still hold seats on the UWINCO Board, making investment decisions for the University of Washington.
While the actions of the members of the board sound preposterous, UWINCO is not broken. It’s functioning exactly as it was designed to. At its head, representatives of the corporate world enjoy no meaningful student oversight or consequences for their actions. Through proper channels, divestment takes years if not decades as generations of students waste time in repetitive meetings and filling out paperwork. All of this bureaucracy has been built to protect the university’s profit and distract students from any meaningful grassroots organizing against them. This allows the UW to continue to seek out exploitative methods of sourcing funds.
In the economic and political system that we find ourselves in, investment and the growth of private capital are inherently harmful to working people. In this case, construction sweatshops are being used by the university to directly fund our campus.
The developer has already awarded the foundation construction to a sweatshop contractor and is set to make the final decision for the majority of the concrete superstructure at the end of July. This month, we will have another opportunity to see UW’s true colors. Will UW make the right choice and make a statement against Baupost’s sweatshop labor? Only time will tell.
The University of Washington Investment Company (UWINCO) was contacted for this article and chose not to comment.
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