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76–009 2001

REMOVING RED TAPE FROM THE DEPARTMENT

OF LABOR’S APPRENTICESHIP APPROVAL

PROCESS

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY REFORM

AND PAPERWORK REDUCTION

OF THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

WASHINGTON, DC, SEPTEMBER 25, 2001

Serial No. 107–29

Printed for the use of the Committee on Small Business

(

(II)

COMMITTEE ON SMALL BUSINESS

DONALD MANZULLO, Illinois, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVE CHABOT, Ohio

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

JOHN R. THUNE, South Dakota

MICHAEL PENCE, Indiana

MIKE FERGUSON, New Jersey

DARRELL E. ISSA, California

SAM GRAVES, Missouri

EDWARD L. SCHROCK, Virginia

FELIX J. GRUCCI, JR., New York

W. TODD AKIN, Missouri

SHELLEY MOORE CAPITO, West Virginia

BILL SHUSTER, Pennsylvania

NYDIA M. VELA ́ ZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

BILL PASCRELL, JR., New Jersey

DONNA M. CHRISTENSEN, Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

JAMES R. LANGEVIN, Rhode Island

MIKE ROSS, Arkansas

BRAD CARSON, Oklahoma

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico

DOUG THOMAS, Staff Director

PHIL ESKELAND, Deputy Staff Director

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

MIKE PENCE, Indiana, Chairman

LARRY COMBEST, Texas

SUE KELLY, New York

SAM GRAVES, Missouri

ROSCOE BARTLETT, Maryland

TODD AKIN, Missouri

PAT TOOMEY, Pennsylvania

ROBERT BRADY, Pennsylvania

BILL PASCRELL, JR., New Jersey

CHARLES GONZALEZ, Texas

DAVID D. PHELPS, Illinois

JAMES R. LANGEVIN, Rhode Island

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico

BARRY PINELES, Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on September 25, 2001 ..................................................................... 1

WITNESSES

Wicker, Hon. Roger, U.S. House of Representatives ............................................ 4

Dunham, Ken, Executive Director, Inland Northwest AGC ................................ 9

Bonk, John, President, M. Davis & Sons, Inc ....................................................... 11

Herzog, John, Staff VP for Public Policy, Air Conditioning Contractor of

America ................................................................................................................. 13

Krul, Robert, National Apprenticeship Coordinator, United Union of Roofers,

Waterproofers and Allied Workers ..................................................................... 15

APPENDIX

Opening statements:

Pence, Hon. Mike .............................................................................................. 28

Brady, Hon. Robert A ....................................................................................... 31

Prepared statements:

Wicker, Hon. Roger .......................................................................................... 37

Dunham, Ken .................................................................................................... 40

Bonk, John ........................................................................................................ 47

Herzog, John ..................................................................................................... 58

Krul, Robert ...................................................................................................... 65

Additional material:

Prepared statement of Mechanical Electrical Sheet Metal Alliance ............ 69

Letter to Chairman Pence from Kathleen Garrity, Associated Builders

and Contractors of Western Washington .................................................... 76

Letter to Chairman Pence from Edward Sullivan, Building and Construction Trades Department ............................................................................... 78

(1)

REMOVING RED TAPE FROM THE DEPARTMENT OF LABOR’S APPRENTICESHIP APPROVAL PROCESS

TUESDAY, SEPTEMBER 25, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON REGULATORY REFORM

AND OVERSIGHT,

COMMITTEE ON SMALL BUSINESS,

Washington, DC.

The Committee met, pursuant to call, at 10:00 a.m. in room

2360, Rayburn House Office Building, Hon. Mike Pence (chairman

of the subcommittee) presiding.

Chairman PENCE. This hearing will come to order.

I would like to welcome all of the participants, as well as the

ranking member of the Subcommittee on Regulatory Reform and

Oversight, the gentleman from Pennsylvania, Mr. Robert Brady.

I want to welcome you to the hearing entitled Removing Red

Tape from the Department of Labors Apprenticeship Approval

Process. We have a spate of expert witnesses as well as the author

of important legislation on this issue.

Let me begin with a few short thoughts and then we will move

immediately to my colleague’s opening statement and then, of

course, testimony. My expectation is that the members in the room

can expect a vote between 10:30 and 11:00. In the event that there

is a vote on the floor, anyone in attendance and witnesses should

be advised that we will simply recess for a brief period of time and

then reconvene. We will complete this subcommittee hearing today

in the midst of what will probably be a busy schedule across the

street.

The hearing today, of course, addresses the need for reforming

our regulatory procedures used to approve apprenticeship programs

in the United States. I am honored to be a co-sponsor of H.R. 1950,

the Apprenticeship Enhancement Act of 2001, authored by my good

friend in attendance today, the gentleman from Mississippi, Mr.

Wicker.

I look forward to his testimony and that of other witnesses who

will discuss the procedures for registering a federal apprenticeship

program and the problems they face in receiving such approval.

As the Secretary of Labor recently noted in her Labor Day address on the state of the workforce, America, more than ever, needs

a skilled workforce. The office buildings of our cities, the shopping

centers of our suburban towns, the homes of our rural counties are

all built by skilled craftsmen who have mastered their art through

2

apprenticeship programs. What concerns me and should concern

every member of Congress, the Administration and businesses is

whether America has the processes in place to train a new generation of skilled craftsmen.

Since at least the time of the Middle Ages, young men and now

young women in the modern era have learned trades at the hands

of masters. The thousands-of-year-old process of training new workers continues today.

During the heights of the worst economic disaster in American

history, the Great Depression, Congress enacted what came to be

known as the National Apprenticeship Act to ensure that employers did not take advantage of young workers’ need for training and

jobs. The National Apprenticeship Act requires that the Secretary

of Labor promulgate standards to ensure the welfare of apprentices. The act also requires that the secretary works with the states

to carry out this function. I think it is absolutely vital for the future of this country to ensure that apprentices are protected yet

trained well enough that they have a mobility to move where the

labor markets dictate that they are needed.

The Department of Labor regulations set forth the criteria by

which any employer should be able to obtain approval of an apprenticeship program. Approval is sought either from the United

States Department of Labor or a state apprenticeship council given

that authority by the federal government. An applicant that meets

the criteria set forth by the Secretary should have the program approved with all deliberate speed without regard to who is sponsoring the apprenticeship program.

If the applicant does not meet the criteria, the Department or

State Apprenticeship Council should provide a written explanation

of the deficiencies so the applicant can modify the program accordingly. The appropriate government agency then should meet quickly when the application is resubmitted to approve the modified program.

Yet these simple procedures are not evident in the approval of

apprenticeship program in America today. In certain instances, it

has literally taken years and multiple lawsuits to obtain approval

of a qualified apprenticeship program and this is unacceptable.

Such behavior, whether at the federal or the state level, is wrong

and it is our purpose in this subcommittee hearing to entertain a

proposal before the Congress to address this inequity. That is one

reason I have decided to co-sponsor H.R. 1950 and I believe it

would provide regulatory certainty to a process fraught with unbridled discretion and endless meetings of federal and state bureaucrats.

Ultimately, I think 1950’s reforms will help all employers interested in providing our young men and women with training in

skilled crafts that this country will need for not only the economic

growth of the 21st century but also the economic dynamism that

our nation may well need in the long struggle into which we entered two weeks ago today.

With that, I yield to the ranking member of this subcommittee

who is kind to join us today and I recognize Mr. Brady for any

opening comments.

[Chairman Pence’s statement may be found in appendix.]

3

Mr. BRADY. Thank you. Thank you, Mr. Chairman. And for the

sake of time, I am going to make some brief remarks and would

ask unanimous consent to submit the rest for the record.

Chairman PENCE. Without objection.

Mr. BRADY. Thank you.

As the population ages and the number of potential workers decline, we must find ways to help meet a new demand for skilled

labor. One way which has been suggested is by changing the federal apprenticeship programs.

Since 1937, the apprenticeship program has a record of great

success: 440,000 workers are trained under apprenticeship programs held to high standards of excellence in the skilled trades. We

depend upon these workers to make sure that our buildings are

well built. Sometimes we take for granted how well our buildings

are put together. In Japan, they build homes to last 30 years. In

America, we build them to last a century. That is the result of high

standards of training in skilled trades like construction, roofing,

plumbing and electrical wiring.

This program makes sure that when you buy a new home and

turn on the faucet, you do not blow an electrical fuse. The men and

women who have graduated from apprenticeship programs are the

professionals who built this country.

Clearly, we want the strongest apprenticeship programs possible.

The proposal under consideration does nothing to strengthen the

current program and, in some instances, may weaken it.

Proponents of this bill see backups and lack of action on applications as the problem. I can understand and appreciate that frustration. There is a labor shortage in the skilled trades and training

programs are needed. But the solution is not to waive the standards that maintain apprenticeship programs at such high quality.

At best, Mr. Chairman, the proposal in this bill is only a small

piece to the puzzle. I look forward to working with my colleagues

in finding a sensible solution to the current skilled labor shortage,

one that maintains our training standards and our apprentice programs and ensures the quality workmanship that makes America

proud.

I feel real, real close to this issue. I am not an expert on anything, but I am close to an expert on this. I graduated from a fouryear apprenticeship program in the carpenters union. I still carry

a current card there. And I am close the apprenticeship programs.

I tutor on every Tuesday night that I am not here and have been

for the last seven, eight years in our programs that help these

young men and women get into them.

We do need them. It is necessary and, again, I cannot express

enough of my abilities that I can lend toward helping making this

remedy the situation that we do find ourselves in. So I am pledging

to work along with you and with my colleagues in trying to come

up with a decent solution.

Thank you.

[Mr. Brady’s statement may be found in appendix.]

Chairman PENCE. Thank you, Mr. Brady.

And with that, we will recognize our first witness, the Honorable

Roger Wicker of Mississippi, the author of the Apprenticeship Enhancement Act of 2001.

4

Good morning.

We will recognize the gentleman from Washington to introduce

a constituent and friend before returning to Mr. Wicker.

Mr. Nethercutt, welcome.

Mr. NETHERCUTT. Thank you, Mr. Chairman, Mr. Brady, and I

thank my colleague and my dear friend Mr. Wicker for yielding for

a moment. I apologize for this.

I am delighted to be here before the subcommittee to introduce

Ken Dunham, who will testify on a panel after Mr. Wicker testifies.

I have known Ken Dunham for years. He is a northwesterner. He

is affiliated with the Association of General Contractors in Spokane, Washington. He has a wealth of experience, Mr. Chairman,

about apprenticeship programs, about the labor force, and about

the need to have a strong labor force in my region of the country.

He will be a valuable witness as the subcommittee considers this

bill. I appreciate your welcoming him, all of you here, and I am delighted to have a chance to say a good word about Ken Dunham.

He is a fine man, a very credible citizen with respect to the issues

that are facing the committee and so I am delighted to do so.

And I again thank the chairman for his indulgence and I thank

Mr. Wicker for his and I apologize for having to leave early.

Chairman PENCE. Not at all. Thank you very much.

With that, the author of this legislation, the gentleman from Mississippi, Mr. Wicker, is recognized.

Mr. WICKER. Thank you, Mr. Chairman.

STATEMENT OF HON. ROGER F. WICKER, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MISSISSIPPI

Mr. WICKER. I do appreciate the subcommittee having this hearing and allowing me to testify and I appreciate the remarks of both

gentlemen who have spoken. I am delighted to know that Mr.

Brady is a graduate of an apprenticeship program and is still involved in that process and I am glad to see that both of you have

spoken in support of the concept. I think that every member of

Congress certainly would like to make the process better if we can

do so.

My remarks today and my legislation deal simply with streamlining the approval process. There may be other things that we

need to discuss with regard to apprenticeship programs, but that

is what H.R. 1950 deals with. Let me just say I want to talk a little

more about what an apprenticeship program is and should be, why

they need to be registered, why there is a need for more skilled

workers and then spend a little time talking about actual experiences that I have learned from business people and contractors in

my own district and then a brief discussion of my legislation.

Mr. Brady mentioned 440,000 apprentices in the United States

now. I had the number of approximately 400,000. But certainly

while that is a large number of men and women being trained, I

think we should have the goal of raising that figure to one million.

Everything I hear is that we need a large increase in the number

of skilled workers because these apprentices are our future electricians, carpenters, plumbers, pipe fitters and mechanics.

And, as Mr. Brady said, they are more educated, they are more

highly motivated, more productive, better skilled. They are more

5

likely to become supervisors. And they are more likely to earn

higher salaries and experience less unemployment. So we need

more apprentices and I think we can all agree on that.

Certainly the reason for registering the apprenticeship programs

is that only the registered ones are permitted to pay apprenticeship

wages on projects where there is federal funding. Also, many municipalities and states require that the apprenticeship program be

registered in order to qualify for the apprenticeship wage.

Mr. Chairman and members of the subcommittee, two years ago,

contractors from my home state of Mississippi came to Washington

to discuss the challenges facing the construction industry. They

listed a number of items but they all agreed that the critical shortage of skilled workers was a paramount issue in the industry.

One of the electrical contractors related the type of apprenticeship program horror story which discourages other potential program sponsors from even formulating an application. In seeking

approval for a line erector’s apprenticeship program in the State of California, this Mississippi company spent nearly $1 million and

five years before the program was finally approved and then only

after a successful lawsuit.

It took the same company two years and $250,000 in expenses

in the State of Washington not to even get an answer. It is not that

the program was denied because it was a poor plan. No one ever

said that. But the State Apprenticeship Council or the SAC in that

state did not even give the program sponsor an answer.

After these experiences, the company no longer seeks approval of

their apprenticeship programs in states that are governed by State

Apprenticeship Councils.

During this meeting, the other contractors in the room all nodded

their heads in understanding. Either they or someone they knew

had similar experience. The costs in time and money to obtain approval for apprenticeship programs is a strong disincentive to sponsoring programs of their own. Therefore, there are not enough new

programs that are submitted for approval and the costly and

lengthy delays in the approval process are denying job training opportunities to thousands who are awaiting approval.

So, members of the subcommittee, to address these concerns, I

have introduced H.R. 1950, the Apprenticeship Enhancement Act.

This legislation does not change the standards which are required

of apprenticeship programs in any way. Those are not changed at

all under this legislation. Without sacrificing standards, we can

create more apprenticeship programs, thereby creating more job

training opportunities.

All this legislation does is remove bureaucratic roadblocks so

that apprenticeship programs which meet federal standards can be

approved in a timely manner, and so that potential program sponsors are not discouraged by approval processes that can cost hundreds of thousands of dollars and many years.

The bill currently has 24 bipartisan cosponsors.

H.R. 1950 requires that the U.S. Department of Labor Bureau of

Apprenticeship Program and Training, BAT and State Apprenticeship Councils, SACS, act on applications within 90 days after an

application is submitted. This should be sufficient time for these

government agencies to make a decision. It should not take more

6

than three months to determine if an apprentice application meets

the 22 basic elements of an acceptable apprenticeship program.

However, my legislation allows for unforeseen circumstances. If

for any reason a SAC or BAT cannot render a decision within 90

days, they can notify the applicant of the status of the application

and then make a decision within the next 30 days. If after the additional 30–day period there is still no verdict, the application

would then be forwarded to the U.S. Department of Labor. The

purpose of this provision is to eliminate the possibility of a pocket

veto by either a BAT or a SAC.

In addition to these reasonable time lines, H.R. 1950 also requires a written justification for disapproval of an application. With

this explanation, sponsors of programs which are denied can work

with the agencies to improve their programs so that they submit

new and approved applications. The legislation also allows for an

appeal to the Department of Labor if the applicant believes that

their program was improperly denied.

This legislation, I repeat, does not change standards and does not

provide for unlimited appeals on the part of a program sponsor. Instead, the bill does just one thing; it asks for an answer from the

government agency.

I appreciate the opportunity to testify before you on the concept

of streamlining the application process and I would urge the subcommittee to give favorable consideration to the legislation, Mr.

Chairman.

[Mr. Wicker’s statement may be found in appendix.]

Chairman PENCE. Thank you for that testimony. I know it is not

customary to ask too many questions of members, but I wondered

if I might, rather than a question, ask you to elaborate on your assertion today that I think is very relevant to both sides of this subcommittee that your legislation does not change the standards

which are required of apprenticeship programs in any way.

In evidence today and in other discussions about your bill, there

seems to be an impression that it does and I wanted to ask you,

if time permits, for you to elaborate on that, however briefly.

Mr. WICKER. Well, I would suggest that persons who are concerned about that particular issue simply need to read the legislation. This is a bill simply about the approval process and I really

cannot state any stronger than that that we leave the standards

the same. Perhaps the standards need to be revisited by the Congress. I do not know. Perhaps they need to be visited by the various agencies. But this bill is very narrow in its scope and it simply

says that under the present standards and guidelines, changing

none of the criteria whatsoever, the agency should simply give an

answer: does the application qualify for approval or not?

And I would submit to members of the subcommittee that 120

days is ample time in order to see if an application on its face

meets the criteria.

Now, perhaps once a program is up and running, I am certain

there are other safeguards to make sure that they are doing what

the application proposed to do and promised to do, but this legislation simply deals with the question of whether the application is

sufficient in order for the program to get started.

Chairman PENCE. Thank you.

7

Mr. Brady, did you have anything else?

Mr. BRADY. Just I would not dare question you, I just wanted to

ask you for help, so to speak.

You did all the work on this and I appreciate it. Is there any way

we could play with the standard or try to—not play with the standard, pardon me. With the application and the way the application

is looked at to speed that up?

The problem that I have is the 120 days they automatically get

in and I think then there is no screening process whatsoever, there

is no qualification whatsoever, and the problem with that is

through an accredited apprenticeship program as I know, I went

through one, you have to pass every year. And if you get applicants

that should not be in the program originally, they may fail and you

are loading up the process with first year apprentices that do not

go to the second year, do not go to the third year and, in some

cases, a third year and a fourth year. I went to a four-year program, some only have two and some have three. And if you automatically let somebody in, it is like waiting in line for something,

if you wait long enough, you get in automatically.

Maybe we could work on the problem that they cannot get to

these people in time and give them some beefing up to make sure

that they do have enough manpower or whatever the problem is to

review these applications in time, within the 120-day period.

Just letting somebody in can cause a problem. If you have 120

people in the first apprenticeship class in the first year and 60 drop

out because they should not have been there, then you are short

in the second year and it is hard to get an apprentice—you do not

let an apprentice in on your second year. They go in the first year

and go through a four-year or two-year respectively program. That

is the main problem that I have looking at this.

And I would love to sit down and work with you a little further

with it.

Mr. WICKER. Well, I appreciate the sentiment of that question

and I would be delighted to work with you on that and perhaps

craft a bill that you could be a co-sponsor of.

This bill is somewhat different from the legislation that I introduced during the previous Congress as a result of some conversations I had with people who had doubts about it, but let me address several of your concerns.

First of all, the legislation does not provide for an automatic approval after the initial 90-day period with the 30-day extension. All

it says is that after that 120-day period if an agency will not give

an answer, yes or no, then it goes up to a higher authority to make

the decision. After the second period, which is a 30-day period, the

application is then forwarded to the United States Department of

Labor. It is still then an application and there is no directive in the

legislation that says the Department of Labor should automatically

approve it. It just says after 120 days we need a yes or no answer

or we are going to give it to somebody who can look at it.

So I hope that addresses your concern in that regard.

Congressman, if there is a need for additional manpower in order

to actually view the applications and see if they are adequate, then

I think that is a legitimate issue that might be very cost effective

8

for this Congress to look at, if we need more people to make the

approval process run more efficiently.

But there is no reason—and I hope you will agree with this, Congressman, there is no excuse for year after year after year, the

same application not even receiving an answer, not even receiving

a status report about what the problem is, what is wrong with this

application. We certainly need to fix that aspect. And that is all

this legislation does.

With regard to an additional point that you made, if a program

that submits an effective application is then up and running and

proves not to be effective there should certainly be sanctions by the

government agencies to address that particular problem.

Chairman PENCE. The chair would welcome the gentleman from

Illinois, Mr. Phelps, and provide an opportunity for any opening

comments that you might have.

Mr. PHELPS. Thank you.

Chairman PENCE. With that, again, our thanks to the gentleman

from Mississippi for a direct and candid exchange. We are very

grateful for your leadership on this issue.

Mr. WICKER. I am grateful to you also, Mr. Chairman.

Chairman PENCE. And we will allow you to move on to a busy

day and then ask our panel of four to move to the witness table.

Thank you.

I would like to welcome all of our witnesses to this hearing of the

Subcommittee on Regulatory Reform and Oversight of the Small

Business Committee. And I know I speak on behalf of the entire

subcommittee in welcoming you and expressing appreciation for

your time and expertise today.

The procedure that we will follow is I will give a brief introduction of each witness and then you will be individually recognized

after your introduction for what will be five minutes of time. Most

of you are veterans of this institution, but for those that may not,

you can observe the lights and respond accordingly. The yellow

does not mean step on the accelerator, it means being to slow down

and then the red means to wrap up your comments.

We will entertain brief remarks from each of the witnesses in the

interests of time and then move into any questions that your comments have stimulated from myself, the ranking member or the

gentleman from Illinois or any other member that joins us.

With that, Mr. Ken Dunham is with us, already having been generously introduced by the gentleman from Washington, Congressman Nethercutt, earlier today.

Ken Dunham is Executive Director of the Inland Northwest

AGC, a chapter of the Associated General Contractors of America,

which is a national construction industry trade association. The

Spokane-based organization has a membership of nearly 560 firms,

representing the highway, utility and commercial building industry

subcontractors and suppliers.

Prior to coming to Spokane in 1993, Mr. Dunham held a similar

position from 1990 to 1993 with the Montana Contractors Association. He is a graduate of the University of Montana with a degree

in radio and television journalism, which is my background as well,

so we will expect a stellar presentation. A native of Troy, Montana

and is recognized for five minutes.

9

Mr. Ken Dunham.

STATEMENT OF KEN DUNHAM, EXECUTIVE DIRECTOR, INLAND NORTHWEST AGC, SPOKANE, WASHINGTON, FOR THE

ASSOCIATED GENERAL CONTRACTORS

Mr. DUNHAM. Thank you very much. Good morning, Mr. Chairman and distinguished members of the committee. I am pleased to

be here this morning to discuss the issue of apprenticeship training. My name is Ken Dunham. I am the Executive Director of the

Inland Northwest Associated General Contractors in Spokane,

Washington.

The members of the AGC of America have consistently ranked

the shortage of skilled construction labor among their most critical

business issues. The construction industry needs more skilled

workers. By encouraging the development of more registered apprenticeship programs, we will have more skilled and better

trained craftspeople in all aspects of construction. We need to abandon those practices that have restricted apprenticeship registration.

House Resolution 1950 will help bring some accountability to the

approval process and is a great start to the process of raising both

the number and the skill levels of our workers throughout construction.

I hope to be able to provide the committee today with an illustration of how the approval process works in real life and impress

upon you the need for reform and accountability.

I have oversight of apprenticeship and training programs for the

AGC chapter in Spokane. In this capacity, I serve as a trustee for

the open shop/non-union carpenters’ and construction equipment

operators’ apprentice program as well as serving as both a trustee

and an apprentice committee member for an AGC Teamster’s apprenticeship program. This background has allowed me to have

that rare perspective of serving in both union and open shop apprenticeship programs.

Until the early 1980s, most of the apprenticeship programs were

administered as joint labor and management programs. Attempts

to open up the process to non-union programs has met with some

success in certain areas. However, patchwork acceptance of open

shop programs does not help fill the need for more trained workers.

We do believe that there is a place for both the union-affiliated apprenticeship programs and apprenticeship programs for the open

shop segment of the industry.

The Inland Northwest AGC attempted to gain approval for construction trade programs without success for ten years, beginning

in 1983. The chapter applied for carpentry and construction equipment operator programs in January of 1994. In that same year, we

re-submitted carpentry apprenticeship programs and operator programs for approval and were denied twice that year, despite the

approval of both the SAC staff and the BAT staff in the State of

Washington.

Following those denials, we had no choice but to file suit against

the Washington State Department of Labor and Industry, as well

as each member individually of the State Apprentice Council.

10

In January 1995, the two programs were finally approved after

a council meeting that was punctuated by much shouting, threats,

and the attempt of the council to go into an illegally closed meeting

to discuss strategies to again deny our program.

The end result was that the programs were finally approved.

This action then resulted in the withdrawal of our lawsuit. The

challenges to our programs continue today and include unwarranted, unreasonable and often contradictory demands for data and

oversight.

I have observed that that same level of oversight and interference is not present in the union program on which I serve as a

trustee and a committee member.

The latest issue with the State of Washington Apprenticeship

Council was the July 2001 denial of approval for an open shop construction craft laborers apprentice program. The SAC rejected the

program after vague, confusing and often contradictory arguments

were made on the grounds that it was unnecessary because the

union program was in place, that AGC jurisdiction lines did not

match up with union lines and challenges were made on the professional and trade qualifications of the proposed members of the committee. None of these were valid criticisms and the programs again

had garnered the support of both the SAC staff and the BAT staff.

We have resubmitted the program for the next meeting in October.

The AGC supports Congressman Wicker in his efforts and applauds H.R. 1950 as a step in the right direction. We welcome all

attempts, legislative and regulatory, to improve a system that is so

vital to the construction industry and the nation’s economy.

In the past, there have been efforts to improve, revamp and update the regulations governing apprenticeship. In the early 1990s,

the Department of Labor developed an initiative to improve the apprentice system in the nation. I list those ideas in which we agreed

with the Department of Labor in my written comments.

The AGC believes that this is a good time to revisit many of

these ideas and to use the legislative and regulatory processes in

concert with one another to improve the apprenticeship system.

Thank you for your time and interest today in this crucial matter. I am happy to answer any questions that you might have regarding my testimony. It is my hope that together we can find a

positive way to address the concerns raised and help workers secure and maintain rewarding careers in the construction industry.

Thank you very much.

[Mr. Dunham’s statement may be found in appendix.]

Chairman PENCE. Thank you, Mr. Dunham.

And, again, we will run through the witnesses and their presentations and then hopefully have a very productive dialogue with

the members present.

John Bonk is also with us today. He was raised in the Wilmington area, graduated from St. Elizabeth’s High School and attended Drexel University and University of Delaware, where he

started working in the construction field at a very early age. He

was a certified welder an still holds a long boom crane operator’s

license.

John started with M. Davis & Sons in 1978 as a project engineer

when the company had 15 employees. he is currently president and

11

part owner of that company now, which has over 400 full-time employees and performs work both regionally and nationwide.

He is also past president of the Delaware chapter of Associated

Builders and Contractors and on the national board and is recognized for five minutes.

Welcome, Mr. Bonk.

STATEMENT OF JOHN BONK, PRESIDENT, M. DAVIS & SONS,

INC., WILMINGTON, DE, FOR THE ASSOCIATED BUILDERS

AND CONTRACTORS

Mr. BONK. Good morning, Mr. Chairman and members of the

committee. My name is John Bonk. I am President of M. Davis &

Sons, Inc., located in Wilmington, Delaware.

On behalf of Associated Builders and Contractors, I would like to

thank Chairman Pence and the members of the Subcommittee on

Regulatory Reform and Oversight for this opportunity to address

ABC’s concerns regarding the hurdles and often overburdensome

procedures faced by businesses when they seek approval of their

apprenticeship programs. I will be summarizing my comments, but

I request that my full statement be submitted for the official

record.

Additionally, ABC chapters from Hawaii, Washington and California will be submitting additional comments regarding this issue

and we request that their statements also be included in the

record.

Chairman PENCE. Without objection.

Mr. BONK. For over 100 years, M. Davis & Sons has offered fully

integrated industrial construction. We have built our reputation

through providing quality workmanship for our clients and safe,

healthy work sites for our employees. We normally have 60 to 70

registered apprentices. In addition, we employ a full-time training

manager and spend in excess of $300,000 per year in training.

M. Davis & Sons has been a member of the Delaware Chapter

of ABC for 20 years. ABC is a national trade association representing more than 2300 merit shop contractors, subcontractors,

material suppliers, and construction-related firms within a network

of 82 chapters throughout the United States and Guam. According

to the National Bureau of Labor Statistics, merit shop contractors

comprised 87 percent of the construction workforce in 1997, up

from 17 percent in 1947.

Our diverse membership is bound by a shared commitment to

the merit shop philosophy within the construction industry. This

philosophy is based on the principles of full and open competition

unfettered by the government and non-discrimination based on

labor affiliation in the awarding of construction contracts to the

lowest responsive bidder through open and competitive bidding.

This process assures that taxpayers and consumers will receive the

most for their construction dollars.

ABC’s commitment to quality training is unquestioned. Beginning in 1960 with the establishment of ABC’s first apprenticeship

program in Baltimore, ABC recognized that the future of the construction industry lies in its ability to attract and retain the men

and women necessary to meet the nation’s construction needs. ABC

provides formal apprenticeship training programs that are regVerDate 11-MAY-2000 07:24 Nov 29, 2001 Jkt 076009 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\A009.XXX pfrm03 PsN: A009
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istered with the Department of Labor’s Bureau of Apprenticeship

and Training. These programs meet all federal and state requirements for formal apprenticeship and prevailing wage work, including employer-sponsored classroom instruction and on-the-job training. Upon successful completion, craft workers are recognized at

the journey level in their trade and awarded their BAT certificate.

The depression-era National Apprenticeship Act which serves as

the basis for the voluntary national apprenticeship system is no

longer responsive to needs of both employers and employees. The

regulations which govern apprenticeship do not address the new

and innovative training techniques that are utilized by employers

and employees today.

Delaware has a state-sponsored apprenticeship program. While

the State Department of Labor employees who administer the program are dedicated individuals, the program is antiquated and

hamstrung by bureaucracy. Because of the time and effort it would

take to register ABC’s apprenticeship program in Delaware, the

contracting community has accepted the status quo.

Over the years, Delaware has lost much of its manufacturing

base and construction could fill the job void this has left. Unfortunately, numerous apprenticeship problems preclude this. It is hard

to keep students in the apprenticeship training because they get

bored with the outdated training methods. Lack of reciprocity with

neighboring states make it economically unwise to utilize apprentices in some instances.

In Delaware and nationally, we have an ever increasing need for

skilled people which is going unanswered. The contracting community is willing to invest the time and money it would take to establish good apprenticeship programs, but are reluctant in the face of

the government.

ABC is looking to accomplish five things. The first of those is due

process. Through the enactment of the Apprenticeship Enhancement Act of 2001 sponsored by Representative Roger Wicker and

Ruben Hinojosa, the federal government could restore much needed

balance and fairness to the approval of apprenticeship programs.

Reciprocity. It is essential to require one state’s apprentices to

recognize those registered in other states. Apprentices should be

able to work in more than one state.

Portability. Registered apprentices currently in training need to

have the ability to move from state to state and enter into another

state’s registered apprenticeship program at the same level they

had attained in a prior state without penalty.

Competency based training. Employees who have previously acquired skill sets should not be required to begin the apprenticeship

program from the beginning.

Distance learning. In order to achieve apprenticeship reform, the

Department of Labor must increase their usage of technology and

the Internet. There is a great need for flexibility and variable options and training methods.

Thank you for this opportunity to be here today. I welcome any

questions that the committee may have.

[Mr. Bonk’s statement may be found in appendix.]

Chairman PENCE. Thank you, Mr. Bonk, for your presentation.

13

With that, we will take a brief recess while the members discharge their duty across the street and then we will return for Mr.

Herzog’s and Mr. Krul’s presentations and then the following questions.

Thank you.

[Recess.]

Chairman PENCE. I would like to thank everyone for their patience. I am informed that the ranking member will be joining us

momentarily, as other members are also returning from the House

floor.

I want to welcome you back to this hearing of the Subcommittee

on Regulatory Reform and Oversight entitled Removing Red Tape

from the Department of Labor’s Apprenticeship Approval Process,

where we are focusing specifically on H.R. 1950, the Apprenticeship

Enhancement Act of 2001.

As I mentioned before, we will complete with our testimony and

then move to any questions or dialogue thereafter and we should

be able to complete our work here before it is time to break for

lunch.

Our next witness is John Herzog, who is the Staff Vice President

for Public Policy for Air Conditioning Contractors of America. John

has nearly 15 years of government experience, including elective

and appointed positions at the local, state and federal levels of government. In addition, he ran his own advertising and public relations business in Colorado for approximately 20 years. Prior to joining ACCA, he was vice president of a Washington, D.C. based public affairs firm where he represented the interests of small business

and rural associates on Capitol Hill.

In addition to his undergraduate degree from the University of

Colorado, he holds an M.S. in journalism from UCLA and has

taught journalism, marketing, consumer behavior, business communications and technical writing at the college level. He is, among

other things, listed in the Who’s Who in Politics in America.

And with that, I recognize Mr. John Herzog gratefully for five

minutes.

STATEMENT OF JOHN HERZOG, STAFF VICE PRESIDENT FOR

PUBLIC POLICY, AIR CONDITIONING CONTRACTORS OF

AMERICA, ARLINGTON, VA

Mr. HERZOG. Thank you, Mr. Pence and Representative Brady.

We appreciate the opportunity to enter in to the national dialogue

on improving the recruitment and training of America’s skilled

workforces.

Originally, as you know, Dick Stilwilll, chapter manager for the

Oregon-Washington chapter of ACCA was scheduled to testify. The

events of September 11th changed that. Consequently, he asked me

to deliver his message and I have also spoken with several other

of our chapter executives who operate apprenticeship programs, so

I think you will find the information of help.

As you know, ACCA is the nation’s largest trade association of

those who design, install and maintain heating, ventilating, commercial, residential, refrigeration and air conditioning systems,

known as HVACR.

14

We are a federation of 60 state and local affiliated organizations

representing approximately 9000 contractor companies nationwide.

Approximately 20 percent of our membership is union affiliated.

Prior to September 11th, the number one concern of our members, union and non-union, was addressing the labor shortage in

the industry. It is not an issue of union versus non-union, but one

of simply putting enough qualified people on the streets to meet

the needs of our community.

Discounting the fallout on the economy from the terrorist attacks, the Bureau of Labor Statistics had projected that the

HVACR contracting industry will face a labor shorting of 104,000

by the year 2004. The entire industry employees 600,000 to

800,000 people, so you can see this represents a significant shortfall.

Part of the solution lies in the way we train technicians. To

begin, we support the Apprenticeship Enhancement Act for it addresses part of the problem. However, our experience highlights

other barriers to training that deserve your attention.

ACCA became involved in apprenticeship training about 20 years

ago through our chapters. Today, I would like to focus on specific

problems that Dick had encountered in Oregon. Our Oregon chapter is often allied with another local trade association. Dick said

they planned to start a SAC-approved apprenticeship program but

became discouraged by what the other group experienced.

Oregon has adopted a random selection pool process. This means

a contractor interested in hiring someone to put through an apprenticeship program can only select the person at the top of the

list. They hire sight unseen.

Dick said that prior to 1999, Oregon operated on a method D selection process approved by BAT. This is the traditional hiring

process. However, the addition of affirmative action stipulations,

which is already addressed by BAT, changed the Oregon process.

It created today’s random selection pool process that has failed to

meet the needs of the contractors or the students.

This presents an especially sticky problem for company owners

who cannot even place their children in a program with their own

company unless the timing is absolutely perfect.

The Oregon SAC requires applicants to have a high school diploma or equivalent with the additional requirement for HVAC

only that they have a C in algebra.

SAC is being driven because it is the only way one can work on

public projects in Oregon, Washington, and California and meet the

prevailing wage requirement for apprentices. This assumes you

want to use apprentices and very few businesses, regardless of size,

can afford to work with only journeyman on a job.

I see that my time is running out. I have experience on Florida

and Maryland. During questioning, if you would like to hear about

those states, I will be happy to share that with you.

Thank you.

[Mr. Herzog’s statement may be found in appendix.]

Chairman PENCE. Thank you, Mr. Herzog, and thank you especially for coming in and filling in at late notice. We appreciate your

remarks and hope as you are comfortable to have some additional

dialogue about some of the remarks that were capably presented.

15

Our final witness today is Robert J. Krul. Mr. Krul is the National Apprenticeship Coordinator for the United Union of Roofers,

Waterproofers and Allied Workers and has held that position since

1979. He is a 29-year member of Roofers Local 74 in Buffalo, New

York, a graduate of their apprenticeship program and is proud to

say he was voted the outstanding apprentice of his class. He was

an instructor and coordinator in his local union as well as a journeyman roofer and waterproofer, serving in a foreman and estimator capacity for several western New York roofing companies.

He has served on the Federal Committee on Apprenticeship, is currently a member of the Building and Construction Trades Department Apprenticeship Committee, is chairman of the Secretary of

Labor’s Advisory Committee on Construction, Safety and Health,

and is also chairman of the Building and Construction Trades Department Safety and Health Committee.

So it is with deep appreciation that we recognize Mr. Robert Krul

for five minutes.

STATEMENT OF ROBERT J. KRUL, NATIONAL APPRENTICESHIP COORDINATOR, UNITED UNION OF ROOFERS,

WATERPROOFERS AND ALLIED WORKERS, WASHINGTON,

DC, FOR THE BUILDING AND CONSTRUCTION TRADES AFL–

CIO

Mr. KRUL. Thank you, Mr. Chairman, for that kind introduction

and I would like to thank the members of the subcommittee for

this opportunity to address an issue that the 14 affiliated unions

of the Building and Construction Trades Department feel is of utmost importance and those of us who are products of this apprenticeship training system feel compelled to address.

H.R. 1950, the Apprenticeship Enhancement Act, purports to

streamline the process of registering apprenticeship training programs and increase the numbers of programs in this country. In

this period of extreme shortages of skilled workers in all industries

in this nation, and most particularly in the construction industry,

the purpose of the legislation at first glance seems to address a

pressing need. But no matter how noble one thinks the purpose of

the bill is, the unions of the Building Trades and the organized segment of the apprenticeship community have one salient point regarding its enactment: what will be the price to the current standards of apprenticeship training that have served this country well

for at least 64 years?

Under the current system, the Department of Labor has issued

national guidelines defining apprenticeship training criteria for numerous occupations and minimum standards governing apprenticeship training that all those making applications office review an

apprenticeship program must abide by. These standards include

items like affirmative action goals, health and safety training,

classroom hours, curricula, wage progression for apprentices, ratios, and other aspects of the program that ensure the welfare of

the apprenticeship is protected and, most importantly, that actual

training will be conducted and the apprentices will learn a trade

or a craft. The system as it exists was designed to make sure that

everyone who submits an application for an apprenticeship program adheres to a given set of national standards for a particular

16

industry or trade, protected the welfare of apprentices being

trained and ensured that the apprentice completed his or her training by learning a craft or a trade.

H.R. 1950 will undermine the Department of Labor’s Office of

Apprenticeship Training, Employer and Labor Services and the

State Apprenticeship Councils. Under H.R. 1950, a contractor or

entity wishing to receive approval for a training program that may

not meet the standards established for their particular industry or

trade can play a waiting game and file continual appeals in order

to receive an apprenticeship training program approval from the

Secretary of Labor’s office without being held to the OATELS’s or

SACs’ high standards.

Those established sets of standards have served the apprenticeship community for over six decades. Are we ready to say in this

time of critical shortage of skilled workers in the construction and

other industries that we are ready to lower the bar? Are we ready

to say that construction workers need not be completely skilled in

what they do, that they only need partial training or task training

in order to work in this industry?

If the answer to those questions in anyone’s mind is yes, then I

hold out to you that the workers who eventually rebuild our World

Trade Center and the Pentagon need not be of top quality or possess utmost skills. If mediocrity in the form of so-so work that

leads to future problems in building and construction is our goal,

then let us lower the bar of excellence.

I have never understood why it is that many in this country look

down at construction work as just another occupation that requires

no marketable skills or standards by which to judge those skills.

Just think of the standards and skills that must be measured in

a host of occupations and vocations in our everyday life. Lawyers

must pass a bar exam in order to practice law. Accountants must

pass a standard certification to receive their CPA license. And pilots must conform to a set of established standards in their training before being allowed to fly. And for the general public, all of

us must pass tests and demonstrate proficiencies before being

issued a driver’s license.

For each of these examples, there are always individuals who do

not pass muster with the tests administered or the standards established in a particular industry, craft or profession. Is the answer

to accommodate them by changing or weakening the standards or

tests? Of course not.

The same should be true of apprenticeship standards. Yes, the

standards are tough, but they are tough for the same reasons that

any industry standards are tough: to ensure that men and women

who enroll in these apprenticeship and training programs will be

properly trained to safely and competently perform their work. Instead of lowering the bar, we should be committed to making sure

that the standards of apprenticeship that have served us so well

over the last six decades are never weakened and, in fact, they

should be strengthened and protected.

I understand the frustration of those who come before you today

and relate that they have experienced difficulty in registering what

they feel is a bona fide apprenticeship training program that meets

the required standards. I am not here to attempt to convince you

17

that this system is never in need of repair or adjustment. But I

would hope that conjecture, anecdotes and what seems to be a few

minor administrative infractions will not be the catalyst for amending the National Apprenticeship Act of 1937.

The committee should look to the Federal Committee on Registered Apprenticeship for guidance on how to address the issues

raised by H.R. 1950 and its proponents. In fact, the FCRA has been

working for the past two years on the very area of concern addressed by H.R. 1950.

I see my time is up and I just would like to sum up by saying

that I and my colleagues in the Building Trades from both labor

and management urge the subcommittee to look to those experts

in the apprenticeship community for any remedies that will be

done so that the original purpose and intent of the Fitzgerald Act

to safeguard the welfare of apprentices is the primary concern that

we look at.

Thank you very much for this opportunity to testify.

[Mr. Krul’s statement may be found in appendix.]

Chairman PENCE. Thank you, Mr. Krul, and thank you to all of

our witnesses today.

The chair will entertain a few questions to our witnesses and

then we will recognize our ranking member, the gentleman from

Pennsylvania and the gentleman from Illinois for any questions or

comments that they might have.

Beginning with Mr. Dunham, I am intrigued by the fact that you

have been involved in union and non-union apprenticeship programs, which seems in some part of this to be a fault line of this

debate, and you have been involved in programs that have been approved under the National Apprenticeship Act. Do you believe that

union and non-union registered apprenticeship programs result in

graduating skilled craftsmen as a general rule?

Mr. DUNHAM. Yes, I do. In our case, the standards that we are

using for the open shop programs are models, the mirrors, of the

union programs under the requirement that the programs have to

parallel each other. So the standards that we use and the education processes throughout it are the same and we have had no

major objection with that.

I think there should probably be some standardization. Carpenters are carpenters, operators are operators. The work processes

are much the same.

The difficulty we have is just simply getting the program considered by the State Apprenticeship Council in the first place and that

is what we think the whole issue is with H.R. 1950.

Chairman PENCE. One follow-up question, Mr. Dunham.

You referred in your remarks to past efforts to update the apprenticeship system with new ideas. I know Mr. Bonk laid out a

few ideas and Mr. Krul also referred to the debate over how we improve the system. I wondered if you might elaborate briefly on how

outside of H.R. 1950 we might consider improving the system that

would raise the level and the quality of our apprenticeship workforce?

Mr. DUNHAM. Mr. Chairman, the issues Mr. Bonk raised are certainly valid ones, perhaps maybe slightly apart from what the intent of this bill is, to simply get access to the program. We cerVerDate 11-MAY-2000 07:24 Nov 29, 2001 Jkt 076009 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 E:\HR\OC\A009.XXX pfrm03 PsN: A009
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tainly agree with the issues of reciprocity, the issues of training,

some of the others. We listed those in our written comments.

But the major problem is simply gaining access to the process of

registering a program in the first place. We do not say the system

needs to be broken, it just needs to be utilized better.

Chairman PENCE. And to Mr. Bonk, I appreciate both you and

Mr. Krul’s hands-on experience, I am someone who believes that

the ability to perform a trade which is far beyond my talent base

is an awesome ability to observe and will probably be much in evidence at those tragic sites in Manhattan and here in Washington.

With that piece of admiration expressed to both of you, let me

ask you about how would you characterize the extent of this problem?

We have heard a wide range of views among the testimony

today, some saying this is a very acute problem with regard to the

approval process. I know that some thought that non-union contractors in Delaware have chosen not even to apply for approval of

apprenticeship programs.

How would you characterize the depth of this problem? Are these

isolated instances or is this a pattern, both in your home jurisdiction and around the country?

Mr. BONK. Having served on the national board of ABC, I was

in frequent meetings with contractors all over the United States

and it is a country-wide problem, that all ABC contractors are looking for is a chance to get out of the batter’s box up to the plate.

If they strike out, they strike out. If they get a hit, they get a hit,

but we cannot even get to the batter’s box right now.

No one is trying to put the standards aside or minimize the

standards. All we want is a chance to stand at the plate.

In Delaware, we have a State Apprenticeship Council. It is comprised of members of the Department of Labor, members of the

business community and members of organized labor. However,

some of the members of the business community are also owners

of organized labor contracting companies, so nothing ever gets

through the State Apprenticeship Council in Delaware. So the curriculum is poor—and it is not to demean the people in the Department of Labor, they are well intentioned, good, hard working people—the curriculum is outdated, the teaching methods are outdated. We are using systems that were brought about 50 years ago.

We are ignoring CD–ROMs, the Internet. We are ignoring the ability to bring someone in and test them.

If you have someone that has been in the trade for 20 years, why

not test them? Why subject that person to a first year apprenticeship program? He is not going to want to do that. Or she is not

going to want to do it. Why not recognize their skill in that field?

We do it at the college and university level, we let people test

out of a class there. Why not do it in the apprenticeship program?

But we are always at loggerheads because of these State Apprenticeship Councils.

Once again, it is not meant to reduce the standards, just give us

a shot at the plate.

Chairman PENCE. Mr. Herzog, it is my understanding that State

Apprenticeship Councils are supposed to follow federal regulations.

Now, I also understand that federal regulations do not permit the

19

establishment of new apprenticeship programs even though an apprenticeship program of that nature and in that craft currently

exist in the state. Is that something that we ought to address specifically in terms of—should we make federal regulations explicit

that an SAC cannot prohibit the establishment of a new program

simply because there is already a program in that craft?

Mr. HERZOG. Definitely. And this is one of the problems that they

faced in Oregon. They also had that same pattern in Florida. And

this is local requirements. All the state SACs have to do is meet

minimum federal standards, which is very true for a lot of federal

programs given to the states. The states can then build upon these

as long as they are meeting the federal standards.

But if you are in a situation—and, actually, there is a lawsuit

in California where they had approved a program for Sacramento,

and they wanted to have satellite programs for the rest of the

state. California is rather a large state so they tried it, but the

union came in and sued them and now there is a possibility they

are going to lose everything because it is such a mess.

In Washington State, there is another example. The 9th District

Court ruled that the state had to provide parallel non-union programs. In effect, the SAC is undergirding that decision by creating

new regulations that make it extremely difficult for the non-union

programs to get started.

So if you want to have enough workers, if that is the goal, you

have to make these programs available so that they are fairly convenient, so apprentices do not have to travel 200 miles to get to a

program, and they have to be cost effective so apprentices and employers can afford it.

Chairman PENCE. And, Mr. Krul, you said, I think, that the

number one point has to do with maintaining the current standards among these apprenticeship programs. And I ask this very

sincerely, as someone who obviously has forgotten more today

about these programs than I have yet learned, how specifically in

your mind does H.R. 1950 erode the standards that currently exist

in the law, at least the last 20 years?

How are the standards that you described eroded in any way by

simply creating a time table for a yes or no decision?

Mr. KRUL. Well, Congressman, it is a fair question and, as I said

in my remarks, we are not here to tell you that the system is not

in need of repair or adjustment. We would much rather see the

Federal Committee on Registered Apprenticeship make suggestions.

To answer your immediate question, I would repeat what Congressman Brady had said. The way this bill is structured, it builds

in an appeals process that seems to be an endless process that

would allow a contractor or an entity to merely stand in line and

wait for the time limitations to run out.

A State Apprenticeship Council with all the stories we are hearing from the folks that are testifying at the table and Congressman

Wicker, the states have the right to state if deficiencies exist in

standards that are being put forward.

Now, there seems to be a time table debate, that it takes too

long. And if there have been years, then obviously something is

wrong and it needs to be fixed, if it takes years to get an apprenVerDate 11-MAY-2000 07:24 Nov 29, 2001 Jkt 076009 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HR\OC\A009.XXX pfrm03 PsN: A009
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ticeship program looked at, or there should be at least an oversight

by some other entity. And we think that back in 1990, the Bureau

of Apprenticeship and Training proposed rules to address this in

program registration, denials and deregistration, that it would

come back through the Department of Labor.

But understanding the way these State Apprenticeship Councils

work, that they meet quarterly, there should not be any big reason

for people to get upset that it is 90 days in between the review of

the program. If that program was reviewed and denied because it

did not meet standards existing for a particular industry, then

those standards need to be brought up.

I mean, there are non-union programs being—I hate to bring

that debate up, but there are non-union programs being registered,

apprenticeship programs being registered, in this country. It is not

like it is—in fact, what I am looking at from those who submitted

testimony, the non-union programs are registered in far greater

numbers than union programs are. But the inverse relationship

that exists is that the preponderance of registered apprentices who

graduate from the programs come from that minority union sector.

So we are looking at—if that many registered programs are in

the non-union sector, could it be that the states are exercising

states’ rights in saying that we will not let a program come into

our particular borders that is less than what is established for an

industry or trade?

If there are some egregious—and I am sure that we have zealots,

some of them my union brothers and sisters, I am sure—then there

ought to be oversight capabilities. But I do not think amending the

National Apprenticeship Act is the way that the apprenticeship

system ought to be looked at to have those adjustments made and

repairs made to it.

I think those who have equity in this system, both in the organized and unorganized sectors, sit on the Federal Committee on

Registered Apprenticeship, there are folks there from the private

and the public sector, and I think those experts would better be

able to tell this body if legislation is needed or if it could be done

through Part 29 of Title 29 of the Code of Federal Regulations,

which currently exists for the regulation of apprenticeship programs.

Chairman PENCE. Thank you.

Mr. Brady?

Mr. BRADY. Thank you, Mr. Chairman, and thank all of you for

testifying today. We appreciate you being here.

My question would be for Mr. Bonk.

Your program has apprentices pay a fee of $700 to $1000 to participate in that program. Is that correct? And how do they pay

that?

Mr. BONK. I am not aware of any apprentice paying for their

education.

Mr. BRADY. I understand that to join the apprenticeship program

that there is a fee for that.

Mr. BONK. That is not true.

Mr. BRADY. Not at all?

Mr. BONK. I am not aware of any ABC chapter or member that

charges for their apprentices. They are usually borne by the comVerDate 11-MAY-2000 07:24 Nov 29, 2001 Jkt 076009 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 E:\HR\OC\A009.XXX pfrm03 PsN: A009
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pany. I have registered apprentices in the State of Maryland that

I pay the ABC chapter there for their training.

Mr. BRADY. You pay for the apprentices’ training?

Mr. BONK. Yes.

Mr. BRADY. What happens in the second year through lack of

work, an apprentice put two years in and he now longer has no

work? Do they get laid off and they just go about the wayside? Do

you keep track of them? I mean, do you try to bring them back a

year later when there is work? Are they a member or what happens?

Mr. BONK. I do not recall the last person that I laid off. It must

have been at least ten years ago, Congressman.

Mr. BRADY. That is good when we are booming, but right now we

are not booming. And if we stop booming, what would happen? I

mean, somebody had to get laid off somewhere, a single employer

had to lay people off. What happens to those apprentices?

Mr. BONK. Well, part of the problem is the lack of portability. In

construction, you have some training in a vo tech arena, different

levels of training once you get out, and there is no portability with

the thing, so that someone after two years may get lost in the backwash.

What is happening now with the National Center for Construction Education and Research, as you take these programs, you actually acquire a transcript so that whether you are in Wilmington,

Delaware or Spokane, Washington, you can take this transcript

and once again catch up on your education.

Mr. BRADY. But to catch up on your education, you have to have

a job with somebody, correct?

Mr. BONK. With the great demand for construction workers in

this country, I do not see any construction workers looking for a

job.

Mr. BRADY. Well, the point I am making is when there are, and

we are in a boom right now, there is no question about it, but there

are times when we do have a lack of work. And the difference between the programs that I see, because I have been involved in

them and I have had a lack of work, is that in a union program

they keep you. They keep you and they keep you for as long as you

keep your card up and they will find work for you. And we have

a mandate on so many employees, so many journeymen, they must

have apprentices. And I am wondering whether you have that

same thing.

Mr. BONK. I do not feel there is any difference in the open shop

sector. January, February, March were very difficult months for my

company. I came out of pocket to get work for my people. Once

again, I have not laid someone off in ten years.

Mr. BRADY. Yes, but that is you. There are other people out there

that do lay people off.

Mr. BONK. Well, I do not know that my story is that different

than the rest of the industry.

Mr. BRADY. Well, I do. I mean, that is absolutely true, there are

people that lay people off. I know people that have gotten laid off.

I was just wanting to know what happens to these apprentices that

put two years or three years in on a four-year program. I mean,

in a union position, they have a union card that they maintain

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their dues which are minimal and they even make them lower

when they are not working, when they are out of work, and they

stay for life. I mean, you could come back 10, 15 years and go back

into the trade. And I was just trying to find the distinction.

Mr. BONK. I have hired people that have completed one year, two

years, three years at other companies and they have completed

their apprenticeship programs within my company.

Mr. BRADY. Okay.

Mr. Krul, how do you see this bill addressing the problems in the

current shortage of the skilled workers?

Mr. KRUL. I hate to keep falling back on my standards crutch.

I do not see this bill addressing skills. It will address skills shortage, it will address shortages in the construction industry. Will it

address skilled worker shortages? I have my doubts. I have my

doubts.

I am listening to the laments of the folks here at the table and

issues that we disagree on. Portability and reciprocity, I do not

think those are the kinds of things personally that the apprenticeship system ought to entertain. However, I would defer to experts

in the field.

And I do think, I would like to repeat, that the question that you

just asked me would be best answered by those folks sitting on the

Federal Committee on Registered Apprenticeship who have dealt

with these issues before and, in fact, are dealing with this very

issue that H.R. 1950 addresses right now and would like to address

the issue of the critical skill shortages.

There are no silver bullets, no magic solutions to the skilled

worker shortages in this country. But I do not believe H.R. 1950

addresses that, sir.

Mr. BRADY. How will the overall quality of apprenticeship programs be affected under H.R. 1950 if it is enacted?

Mr. KRUL. If it is enacted, the quality of those people, if substandard programs, programs that undermine the standards that

are currently existing for an apprenticeship program are allowed to

go into place, for instance, if wage progressions are not equal, if

wages and fringe benefit levels are not equal, there is a huge bidding advantage for a contractor in the construction industry who

would register a program, pay his people lesser monies than someone in the organized sector would be doing, and to come in and underbid fair contractors in a union setting.

Mr. BRADY. Thank you.

And thank you, Mr. Chairman.

Again, I thank all of you.

Chairman PENCE. The chair recognizes Mr. Phelps of Illinois for

any questions or comments of our panel.

Mr. PHELPS. Thank you, Mr. Chairman. I want to thank you for

calling this hearing and examining a very important piece of legislation and the panel members for testifying. Very enlightening.

What protection, Mr. Bonk, do you think an apprentice worker

would have under an employer-sponsored apprenticeship program

if after two years they fire them, an employee, to hire another apprentice to keep the costs down, so people maybe are not being laid

off, but have you hired people fired?

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Mr. BONK. We have fired people, not—you know, there has to be

a reason to fire someone or it will not stand up in court. We do not

just arbitrarily go out and fire someone.

Mr. PHELPS. No, I am not indicating that. But those that—I

guess if the concerns of labor are not addressed, one of the things

that they evidently are concerned about would be the competition

of what eventually comes to wages, which has all kinds of ramifications, what Mr. Krul says, from the competition of bids, how much

skill there is involved in those because of lower costs versus those

that had to pay more to get more skilled. Do we have an even playing field with everything that is proposed in H.R. 1950?

Mr. BONK. No, I do not believe we have an even playing field.

I think you will find more situations where journeymen are less

likely to find work in the organized labor section, in a closed shop,

than in an open shop sector, because in order to get a good average

wage on a job, you are going to find union contractors want a lot

of apprentices to get the average wage down. However, once they

reach journeyman status, I think statistically it has been proven

that they are going to sit in the hall. There is not as much demand

for the journeymen as there is for the apprentice because of the reduced wage.

That is not the situation in the open shop arena. If I am going

to spend all this time and effort on a person, I want to retain them.

I think there is more of an affinity towards the company in the

open shop arena. There is an allegiance there. I take care of my

people. And I think you will find they are more likely to stay with

me. I do not send them back to the hall, I give them the opportunity to work within other trades.

The construction industry does not work in a vacuum. If I start

doing shoddy work, I am not going to be out there. If my employees

perform poorly, people are not going to utilize me. Architects look

at our work. Engineers look at our work. License and inspections

people look at our work. I cannot do shoddy work. So the idea that

we can put in a poor apprenticeship program and do shoddy work

to keep the costs down, I am not going to survive in a free market

system.

Mr. PHELPS. Mr. Herzog or Krul, would you respond to that as

far as the effect on the journeyman, the point he made? Do you

have an opinion on that?

Mr. HERZOG. Fortunately, we do not have that problem. Our

members cannot find enough workers to do the work that they

have. And this situation has been going on for many years.

Mr. PHELPS. Why is that, you think?

Mr. HERZOG. Because there is a shortage of people that want to

get into these quote blue collar trades because it is not very sexy.

Students can get work in the computer industry. We have talked

with the BAT people here, they have been very helpful and understand this situation. You cannot attract the kids into these programs. The high school counselors are sending them elsewhere.

Our people are actually going down to the junior high level trying

to convince students that this is a possible trade one can get into

if you are not college bound.

Mr. PHELPS. So we have this factor with the 25–to–40–year olds’

decreasing interest in the industry.

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Mr. HERZOG. Getting them at 18, getting high school graduates

to go into this industry. We would love to have a lot more people.

Mr. PHELPS. So is that—maybe you would say let the market

work without too much intervention or influence from the government? Does that not mean, then, that that would have an effect on

wages, trying to recruit in shortage areas?

Mr. HERZOG. Yes. Obviously, what wages one pays determines

how competitive you are in competing against others, whether

union or non-union. You can only afford to pay a certain amount

of money. The market determines what the rates are, except prevailing wages where everybody pays the same.

Mr. PHELPS. Mr. Krul, did you have a response?

Mr. KRUL. I do not mean to get into colloquy here, but I could

not think of a quicker way for a union contractor to go into Chapter

7 or 11 bankruptcy than to put all apprentices out on a job and not

use his most skilled manpower in the form of his journeyman and

top estimators.

The fact is that all contractors in the organized sector, and I can

only speak for the organized sector, that is where my experience

is, they understand under the collective bargaining process that

they are required to hire apprentices in the ratio that the standards of the program are registered under. There would certainly be

no contractor who would ever consider going beyond those ratios in

some quote-unquote cost saving measure because the apprentices

are being paid a portion of the journeyman’s rate. The skill level

is not there for an apprentice. He or she is still learning. And when

you are on a big outage on a power plant or if you are going

through a decommissioning a nuclear plant, you are not going to

put apprentices in there. You are going to have your top people

doing that.

Mr. PHELPS. Mr. Dunham, do you have a response?

Mr. DUNHAM. Many of the public work contracts in the State of

Washington now have a requirement in them for a certain percentage of apprentices and whether it is open shop or union contractors

bidding on that, that is how many apprentices will be on the job.

So it is really not that much of an issue.

The issue, too, for the contractor is, whether they are union or

open shop, is that they want to do a quality job and be able to stay

in business and continue to do work in the future and they are not

going to put unskilled, untrained people on the job that would affect their ability to do that.

The standards in our situation, standards that the apprentices

adhere to, are virtually the same for both the union and open shop

segment. Our issue is just one of simply getting the open shop programs registered in the first place.

Mr. PHELPS. One last question for any of you to respond or all

of you.

One of the main reasons expressed for the need for this bill is

to streamline the application process. How do time limits on the

application approval streamline the process in your opinions?

Mr. BONK. I think no matter what industry you are in, if you

have a time limit you are more apt to perform. I always laugh at

contractors at bid meetings, the first question is can we get an extension on the time to bid. And it does not matter how much time

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you have, you are going to do it at the end, so if there is some pressure at some point in time to get this done, it will get done. If there

is no pressure to come up with an answer, whether it be positive

or negative, it is just human nature to let it slide.

Mr. PHELPS. Okay. So the time table provides pressure, in your

opinion, to move it right along.

Mr. BONK. In my opinion, yes.

Mr. KRUL. Congressman, I would just repeat what I said before.

It is my understanding, and I would stand to be corrected, that

most State Apprenticeship Councils, those members, serve in a voluntary capacity and meet quarterly, so any time limit, for instance,

the 90 days proposed in this bill, would put pressure on. If the review happens 90 days—an apprenticeship program is submitted

and it is found to be deficient and that State Apprenticeship Council will not meet again for 90 days, I do not know how this bill’s

time table and the time table of the State Apprenticeship Council—

who is going to authorize or enforce that they meet sooner in order

to accommodate that time table?

Mr. PHELPS. Mr. Bonk, what do you say to that?

Mr. BONK. I do not feel the 90 days is an issue. I think 20 years

is an issue.

Mr. KRUL. I would agree.

Mr. PHELPS. Twenty years? I missed something.

Mr. BONK. The ABC Washington chapter waited 20 years for an

answer.

Mr. PHELPS. Oh, I am sorry.

Mr. BONK. I feel that if we are being given due process, if someone is legitimately looking at the thing, that is fine. The 30 days,

90 days, six months, I think it is all irrelevant. I do not feel they

are being given an honest——

Mr. PHELPS. Except the pressure time table, you said. That is

relevant.

Mr. BONK. The 90 days is relevant. I do not know that these apprentice councils only meet quarterly. I do not think that is the

issue. The real issue is get someone to look at it. Let us get out

of the batter’s box up to the plate. If we strike out, we strike out.

Mr. HERZOG. We have a perfect example for you. In Florida, our

chapter executive applied for a program. She was on the SAC, she

knew the people, she made her application. After four to six

months not hearing anything, she called the chairman of the SAC

and raised Cain. She asked what is going on, why have I not

heard? And immediately thereafter, the program was approved.

If she did not know anybody there, if she was just out there like

everyone else, she would still be waiting. And if you have a problem on the time limit, determine it based on when you start the

clock. If a SAC does not meet less than quarterly, and start the

clock at that first quarterly meeting. But you have to make it

known to everybody applying for the program when that clock is

going to start.

So, if I am applying for a program and the SAC met, say, two

weeks ago and then I apply, I will know ahead of time that there

is not going to be any action at least for two and a half months

because they are not meeting.

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The other problem they have in Florida is they cut their budget

to $1.3 million to oversee 347 programs. They lost their specialist

and now they put the program under the unemployment department. So that is another problem, the funding of these programs

is probably why there is the slowdown in response.

Mr. PHELPS. So do you think these people are properly communicated with, with the quarter timing, to understand where they

are?

Mr. HERZOG. It is a certainty. Yes. You have to know what the

game plan is. You have to know when to expect a response so that

you are not sitting on the phone and telling people who have

signed up to become apprentices, yes, maybe they will hear something next week, when it could be months before you know anything.

Mr. DUNHAM. Mr. Congressman, in the State of Washington, the

staff of the SAC obviously goes to work every day and works on

that and has correspondence and discussion with the council members on a very regular basis. The quarterly meetings that are conducted by the SAC in some instances are formal occasions to enroll

for the public record actions taken by that group, but they obviously do not work in a vacuum, the work is done constantly, and

that is why I think the 90 days is probably a reasonable way to

say that you should take some positive action toward us.

Any of us who have a program, if we found some deficiency in

our standards, which we rarely would because they model the

union programs that have been in existence for years, we could

take care of that and the issue of 90 days would not be a major

issue.

Mr. PHELPS. So if I hear you all right, even though you might

differ on the time table process, you think that it is necessary to

have a time table.

Mr. DUNHAM. That is correct.

Mr. PHELPS. And that whether it is 90 days, you think it is irrelevant, you all think it is working as it is?

Mr. KRUL. I would respectfully state, as I said in my testimony,

that rather than do this legislatively, I would rather see this done

through the CFR. And I would, if I could, leave with your staff a

copy of that 1990 proposal that never went anywhere that did give

the then Bureau of Apprenticeship and Training Director within 30

days the right to review a denial of a program.

Mr. PHELPS. Thank you. That would be very valuable.

Anybody else have anything to add?

Mr. BONK. I think one of the most basic management premises

is what gets measured gets done. Right now, there is no measurement. Put some kind of measurement in and it will get done.

Mr. HERZOG. I might add, too, that a lot of our chapters just

went with the BAT process and they said that the difference is like

night and day. It has been a pleasant experience, they have been

very helpful.

Mr. PHELPS. The BAT process?

Mr. HERZOG. The BAT process. They understand——

Mr. PHELPS. So maybe that would be a model?

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Mr. HERZOG. They do not have a time line. It is just that they

are more efficient and maybe it is because they have more people.

I do not know.

Mr. PHELPS. Thank you all very much.

Mr. Chairman?

Chairman PENCE. Mr. Brady, did you have any other follow-up

questions?

Mr. BRADY. Just an observation. The DOL does not keep statistics, I do not believe, on the amount of complaints. I think that we

should probably look at that and maybe try to compile what

amount of complaints there really are and how widespread it is before we consider legislation. I mean, we do not know that.

And I do not know whether or not—I am not trying to be an obstructionist—I do not know whether or not we can even get that

information, but I think in due diligence we should try to and find

out if it is two complaints from this part of the state and maybe

just three from here, maybe Mr. Bonk has a legitimate complaint

from just his own area, but if we can just see where it is at instead

of putting in broadbased legislation for the United States of America for apprentices, we should probably try in due diligence to get

those statistics.

Chairman PENCE. I want to thank all of those who presented testimony today and especially thank my colleagues, the ranking

member, Mr. Brady from Pennsylvania, and Mr. Phelps from Illinois for joining us.

I especially want to thank the public spirited nature of all of

your comments. This is an issue that affects today 440,000 some

odd families. It is our hope that we could proceed in a positive way

so that we could have nearly a million people to meet the market

need that seems inarguable in the coming years.

I just would hope that we would go forward with the idea that

whatever we do that one principle would come shining out and that

would be that the law that is on the books is enforced and that if

we need to make changes in that law or in the way that it is interpreted through regulation, it is my hope that our subcommittee

would be a part of that discussion, but I remain a strong advocate

of H.R. 1950 inasmuch as it simply calls for a streamlining and application of existing standards and I also would endorse the principle that performance measured is performance enhanced.

One clarification, for the record, according to my understanding,

the time clock for the 90 days begins after the initial SAC meeting

and so it would accommodate the quarterly schedule that many

states do employ in their meeting, thereby giving as much as a sixmonth initial window with another 30–day extension on top of that

in reality.

That being said, again, thank you to our witnesses and to my colleagues. This hearing is adjourned.

[Whereupon, at 11:55 a.m., the subcommittee was adjourned.]

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