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In a motion filed just before the Easter weekend, the Associated Builders and Contractors alleges that by awarding training grants to trade unions through the State Training and Employment Program, or STEP, the state Labor Department is violating its own regulations.
Labor Department Commissioner Greg O'Claray said April 17 he couldn't comment on the complaint, but said he felt the issue had little merit.
"We know the rules and we follow the rules," he said. "There are awards to apprenticeship training programs that deliver employment. Organized labor does have its own funds, and this augments their existing funds; it's not replacing them."
STEP is funded by everyone who works in Alaska. The state takes one-tenth of 1 percent of wages, and puts the money into the Unemployment Insurance Trust Fund, which then goes into a special employment assistance and training program account in the state general fund. The Legislature appropriates money for the training grants.
The program aims to train people who are unemployed, underemployed, have seasonal jobs or face losing their jobs, to take positions in industries that the state has determined has a shortage of workers, such as in the construction or health care fields.
The idea is to reduce unemployment benefits claims, foster new jobs through the availability of a skilled labor force and to increase training opportunities using state money to provide this job training when federal or private funds for similar services are not available, according to the program's annual reports.
The state set up the Alaska Workforce Investment Board, a 26-member advisory group that is responsible for determining which industries need the most workers and to develop a plan for filling those positions.
The board determined that the construction industry faced the largest worker shortages of any industry in the state. Industry officials say they need at least 1,000 new construction workers a year for at least the next decade to keep up with current building demands. If a gas pipeline deal is signed, thousands more will be needed.
Construction makes up 6 percent of the state's workers, but would need to recruit upward of 20 percent of job-seekers, Dick Cattanach, executive director of the industry trade group Associated General Contractors of Alaska, has said.
In fiscal year 2004, some 1,741 participants completed STEP training, about 47 percent of who were collecting unemployment benefits before entering the program, according to the program's annual performance review released to the public in mid-April.
The report, written in January, said that $3.8 million went directly toward training support in 2004. Program funding totaled $4 million.
The largest training providers were construction apprenticeship programs, the report said.
In its annual review, the state listed 20 grant recipients that received a total of just over $3.4 million and served 1,571 participants. Six of the grant recipients listed were unions, receiving a total of nearly $2 million and serving 970 participants.
Recipients with fewer than 10 participants were not listed.
Grants to unions included $402,715 to the Alaska Laborers Training School to serve 452 people; $486,399 to the Alaska Operating Engineers for 342 participants; $260,706 for the Alaska Joint Electrical Apprentice Training for 104 people; $74,700 to the Fairbanks Painters and Allied Trades for 38 people; $152,020 to the Pile Drivers Union Local 2520 for 18 people; and $105,301 to the Alaska Roofers and Waterproofers Local 190 to train 16 people.
In its complaint, the ABC says that of the more than $4.6 million appropriated for the program, $1.2 million was awarded to construction training. Seven of the 10 construction grants were given to union apprenticeship programs, which received just over $1 million.
The ABC used data from an annual report shows more preliminary information for fiscal 2004. It was released in January 2005. The more recently released performance review displays more detail and was as released after the complaint was filed.
The filing says that by awarding STEP grants to union apprenticeship programs, the Labor Department violates its own regulations. "According to their own procedures, union apprenticeship programs only train those who join the union and only accept applicants for the number of jobs that union contractors have available," the complaint says. "Thus, this limitation does not allow the union apprenticeship programs to increase training opportunities for the state's workforce or to foster new jobs."
The commissioner, who has the final say on all grant recipients, said that the idea of the funding is to give money to businesses that will hire STEP participants as a result of that training.
"We do not attempt to supplant other funding sources," he said. "We consider STEP dollars as the funding of last resort."
The ABC also contends that unions encourage members to accept unemployment benefits during its classroom training, when students would not get paid by an employer. This, the organization says, promotes, rather than reduces, the number of unemployment claims.
Union apprenticeship training program officials have said that they do encourage eligible apprentices to apply for unemployment benefits during the weeks of classroom training as a means for income, which may be the only source of money they would during that classroom time.
Apprentices get paid during the on-the-job training portion of their education, but not for classroom time, which would be similar to any employee taking courses at the university on his own time, they have said.
ABC also says that union apprenticeships are already funded by withholding money from union members' paychecks through training and apprenticeship fund deductions, which goes against the regulation that the state would not award grants when private training funds are available.
The Legislature is slated to appropriate money toward this program before the session ends early next month. The complaint asks that the court issue a preliminary injunction to stop the Labor Department from awarding any STEP grants until after the court rules on the complaint.
Melissa Campbell can be reached at melissa.campbell@alaskajournal.com.
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