The New Administration: Blessing or Curse?
Ulf Wolf / May 2017
Unless you’re just returning from a few relaxing months on Mars, you are well aware that the guard has changed in Washington, D.C., and quite drastically at that.
Donald J. Trump is now president of the United States, and he took office with a bagful of campaign promises that may (or may not) impact our industry.
A blessing or a curse? And to what extent? We’ve checked in with some contractor members of the Association of the Wall and Ceiling Industry.
How is the new administration affecting the contractors themselves, their businesses, their employees, and the industry as a whole? If no obvious effects are being felt yet, do they foresee any? That is what we wanted to know.
How is the new administration affecting you?
“I have seen a sharp increase in the Dow Jones market since the first of the year,” says Dave DeHorn, chief estimator at Brady Company/Los Angeles, Inc. “This has had a direct and positive impact on my 401(k) portfolio.”
Says Lee R. Zaretzky, president of Ronsco, Inc. in New York, “I’m quite optimistic. Look at the stock market: 5 to 7 percent up. That speaks volumes. There’s a little more spring in my step with the new president in place. I know him personally, and one thing I am convinced of is that he loves this country and would do nothing to harm it.”
Doug Bagnell, general manager of Olympic Interiors, Inc. in Washington, is less certain: “I personally have many concerns with Trump, even though I have always thought of myself as a Republican. The biggest concern is that he seems to shoot from the hip, and I fear that his actions could harm the world economy. Also, so far I don’t see him even attempting to unify the country.”
Craig Daley, president of Daley’s Drywall & Taping in California, looks at things this way: “We hear the Trump administration wants to reduce corporate tax rates. If he’s successful at that, we’ll use the savings to reduce debt and grow the business. We are paying 50 percent rates now, and it’s nice to know that someone in government thinks that’s too much.”
Giles Turgeon, president of Green Mountain Drywall Co., Inc. in Vermont, echoes this sentiment when he says, “It looks like I might be paying less in taxes; that’s always a good thing.”
Says Ed Sellers, general manager/vice president at OCP Contractors in Ohio, “I believe our president is learning how to navigate Washington while the other side of the aisle attacks early and often. Personally, I see the stock market rising, even if mainly on optimism right now. My 401(k) looks better.”
Todd Lawrie, president of Delta Contracting Service, Inc. in Michigan, is optimistic as well. He says, “After the last administration guided our proverbial ship toward the rocks, Mr. Trump is a breath of different air—nothing fresh comes out of Washington. So far, the economy is reacting positively to his intent.”
Greg Smith, vice president of estimating at Superior Wall Systems in California agrees. “My retirement portfolio looks much better after the stock market bump,” he says, “but we’ll have to see if it’s sustainable.”
How is the new administration affecting contractors’ businesses?
“It might be too early to tell if the new administration has had an impact on construction,” says DeHorn, “but the number of projects bidding in the Los Angeles area right now is booming. So much, in fact, that GCs are having trouble finding coverage in all trades.”
“Our area construction is booming and we find it difficult to find labor,” says Bagnell. “But I don’t see Trump helping us or even caring about our industry or area.”
Says Daley, “We’re concerned about widespread immigration reform without a plan to legally hire those who are already here and working hard. All this talk of rounding up illegals, removing them from job sites is unnerving. This would be devastating both to their families and to the construction market.”
“We finally have a businessman in office,” says Richard Ostrom, president of RAM Acoustical Corporation in Pennsylvania, “and not a politician who, as a rule, does nothing.
“Today, our business is strong because Pittsburgh has now matured into a technology environment. With Trump streamlining the tax structure, we will boom.”
“I’m looking forward to fewer regulations and the paperwork that goes along with that,” says Turgeon.
“If economic growth picks up to even 2.5 or 3 percent consistently,” says Sellers, “we’ll have a healthier business environment. For those who don’t remember, we hit 8 percent growth in the 1980s, and the low points of that era are the good times we hope for now. It will take time, maybe a year or so if his policies work, but I believe they will.”
Adds Lawrie, “It all depends on whether the old guard will stand down and cooperate rather than try to foil every plan just for the sake of partisan squabbling with the new administration.”
Observes John Kirk, owner of Kirk Builders in California, “My area thrives on tourism, and my business thrives on the hospitality industry. Visitor volume has dropped here along with other tourist destinations. This is not a good omen.”
Says Chuck Taylor, director of operations at Englewood Construction, an Illinois general contractor, “The administration is pro-business, and even though we see retailers shuttering stores in numbers we have not seen since the recession, our developer clients seem to be optimistic about the future.”
Zaretzky’s take is that “there’s a positive sentiment in the air. That said, even before this election there was a great feeling about the next several years. The administration has bolstered this momentum.”
Says Smith, “If this administration fulfills its campaign promises to lower federal corporate taxes, this could have a huge effect on businesses and our industry. And if it grants the promised tax breaks, I’d expect to see more companies investing in infrastructures, which means more work for us and our industry.
“This would also mean higher profits for all of us to invest in our companies and our employees, which would aid employee retention through higher salaries or bonuses.”
“The problem I see,” says Charles Antone, consultant at Building Enclosure Science in Rhode Island, “is that Trump has a snowball’s chance in hell to actually see his proposed policies through Congress and Senate. Also, while his proposals are sold as very pro big-business, they are not very beneficial socially or for the environment.
“I don’t think the president has the political savvy and experience to actually get things done. Nor do I see anyone in his cabinet who can actually reach across the aisle to gain consensus. You can promise anything you want, but unless you know how to get it through Congress to fund it, they’ll remain promises.”
How is the new administration affecting wall and ceiling contractors’ employees?
“Although we participate in E-Verify,” says Bagnell, “many of our employees have family and/or friends who now face deportation. Some employees with green cards may also face deportation for minor law infractions.”
Says Daley, “Our field employees are union and covered by good health plans. All the talk about removing or revising Obamacare won’t really affect those with existing coverage.”
“My employees are optimistic,” says Lawrie, “even though they historically, as union workers, vote democrat. Those I’ve talked to feel that the path we are headed down is the right one, and that the alternate path would have been disastrous.”
Adds Timothy Rogan, vice president, CEP at Houston Lath & Plaster in Texas, “My employees, almost all of whom are Hispanic, are concerned. They are all legal or resident aliens, but they talk about the possibility of deportation all the time. I am for the Texans for Sensible Immigration Program headed by Norman Adams and Stan Marek: document and tax them.”
“My employees,” says Zaretzky, “being union here in New York, are not concerned. However, I hope that with further crackdown and enforcement, the non-union sector and its black, underground cash market will have to start playing by the rules, which will help the economy.
“Not only can you not compete with contractors who hire undocumented workers as independent contractors, but they give the industry a bad name with sub-par work often.”
“I believe,” muses Antone, “that there’s as big a chance for the current administration to deport our millions of undocumented individuals as there is of China invading the United States. In order to accomplish such a massive task, the country would have to turn into a military dictatorship and, frankly, I think the military leadership is too intelligent and too genuinely American to attempt such a thing. Neither would such a move make much business sense. It’s also worth noticing that those who are being deported right now are those who report to ICE on a monthly basis: the low-hanging fruit, as it were.
“I really don’t think that the administration has the know-how or brainpower to get such a massive project done, nor do I think that the Republican party has any real incentive, political or otherwise, to enforce that promise.”
How is the new administration affecting the wall and ceiling industry?
“If the new administration, as promised, increases the defense budget and infrastructure spending throughout our nation,” says DeHorn, “then jobs will become more available and our industry could see an upswing in commercial construction projects as well as an upswing in the housing industry.
“But they need to figure out how to pay for it all.”
Warns Bagnell, “We already suffer from a shortage of skilled workers, and Trump’s deportation efforts will only worsen the shortage. Also, I don’t see immigration reform happening during this administration.”
“The talk of keeping manufacturing in the United States has a great positive side for contractors,” says Daley. “It’s nice to see the pendulum swing away from overseas outsourcing.”
Turgeon hopes to see environmental regulations relaxed a bit. “Many regulations are too much of a burden while not accomplishing much.”
Says Sellers, “I know good people in this business who have yet to recover fully from the 2008 downturn. They have worked hard and smart to survive. Generational companies are having a difficult time with succession due to inheritance laws and tight margins, forcing consolidation. The benefactors of this trend applaud this, but others would like the option to see their family business stay a family business. My hope is that they will regain that option in the new pro-business environment being created.”
Adds Lawrie, “The industry appears to be poised for a recovery such as we have not seen in a while. Again, the length and strength of this depends on whether the new administration is hampered at every step of the way as it seems they are now.”
“Our industry has to change,” says Rogan. “How can a guy who pays all his taxes and insurance premiums compete against someone who does not and pays cash to illegals? Many undocumented immigrants deal in cash, and they don’t pay their fair share to society. This really affects the guy who plays by the rules, because he has to pay to cover the skim.
“Trump is a businessman surrounding himself with businessmen to run the U.S. government as a business. I don’t see anything wrong with that.”
Adds a North Carolina contractor, “Yes, the new administration looks to be favorable to business in all areas, and I expect to see national economic growth, the deficit reduced and a return of American pride. I also hope that we will soon see a national trades training program so that we can reduce the unemployment rolls of able bodied American workers.”
Says Smith, “Here in Los Angeles, the economy was on the rise prior to the election. The question is, for how long? And will politics get in the way of our local growth?
“I think with the stock markets breaking records and as corporate health and corporate wealth increase, our industry will restock financial war chests that were depleted during the long-sustained downturn.”
Observes Stan Marek, chief executive officer at Marek Brothers in Texas, “It is too early for me to say much about the new administration, except that I am encouraged by the results of its crackdown on illegal immigration. It’s terrible what our undocumented population is having to endure, but that being said, it might be the only thing that gets voters to demand a sensible immigration bill of their elected representatives.
“Eventually, the construction industry will feel the brunt of the enforcement. Mandatory e-verification is on the horizon. All of us are suffering from a lack of skilled labor and with the border closed and baby boomers retiring, we had all better get serious about recruiting young men and women into the trades.
“A bill or executive action that gives undocumented workers a chance to register with the government, pay taxes and a fine, if necessary, would be a great gift to our industry.
“Undocumented workers, once given the legal right to work, would no longer put up with the terrible practices that have plagued our industry for over 30 years.”
Observes John Hinson, division president at Marek Brothers Systems, Inc. (Dallas) in Texas, “Although there’s a lot of talk in the news, a lot of marching, speaking, tweeting, lobbying and speculation about potential changes, so far Trump’s orders are challenged both in courts and by the legislature and have not had a chance to impact our businesses, employees, industry or me personally one way or another.”
“It is hard to form an opinion with such a short time in office,” says Mike Heering, president of F.L. Crane & Sons, Inc. in Mississippi. “I know that the president is trying to follow through on his campaign promises, but I am wondering whether he’s actually analyzing these decisions well enough to know what the outcome will be long-term. Listening to the news, it sounds like all his decisions are terrible, but I think you have to take that with a large measure of salt, for it seems to me that the media has a vendetta against him and will find fault with whatever he does. I believe that going forward he will look out for the things that have stifled the business sector and will try to make it easier for businesses to invest and grow.”
“Above all,” says Zaretzky, “I am an American, and I love my country. It really does not matter who is in power: Each morning I wake up and do my best for my family and country.”
California-based Ulf Wolf is the senior writer at Words & Images.