There may be more than meets the eye behind the high-stakes battle over labor rates and terms of work at Chicago’s McCormick Place.
It isn’t unusual for the parties in a contract dispute to sidestep issues in public that they freely acknowledge in private negotiations. (Hmm. Have we just unearthed yet another value proposition for face-to-face meetings?) But this would be the moment for combatants on all sides to keep their eyes on the bigger prize of expanding the economic pie for everyone involved in Chicago’s multi-million-dollar trade show business.
Tim Roby, president and CEO of the Chicago Convention and Tourism Bureau, sounded the alarm in April 1 testimony to the Illinois legislature’s Joint Committee on the Metropolitan Pier and Exposition Authority. Chicago has already lost two major shows, the Healthcare Information Management Systems Society and the Society of the Plastics Industry, in the last year, and Roby said more could follow. “If we don’t fix this before the legislative session adjourns—and I’m not sugarcoating this—come July 1, you can be sure that at least five and as many as 20 more shows will leave Chicago.”
He told lawmakers that Chicago’s visitor industry generates 132,000 jobs and $656 million in tax revenue. Every one percent increase in hotel occupancy translates into 1,000 new jobs and $5 million in state and local taxes.
At first glance, the issue of pricing for Chicago’s meeting and trade show business is overpowering. The city’s hourly labor rate is $66.30, compared to $42.62 in Las Vegas and $26.83 in Orlando. The minimum cost of standby labor for a four-day show is more than $20,000 in Chicago, just over $2,700 in Las Vegas, and just over $1,700 in Orlando. According to local industry advocates, that’s largely because union rules require a minimum standby team of 10 workers while a show is open in Chicago, against two in Las Vegas or Orlando.
Industry leaders are also trying to change restrictive union rules that bar exhibitors from taking on some of the simple, practical, and obvious tasks that need to get done on the trade show floor.
“Our competitors are using our costs as their lead marketing tactic,” Roby told the Joint Committee.
Robert Fulton, business agent with Riggers Local 136 in Chicago, said there’s room to reopen the current labor contracts at McCormick—for the fourth time since they were signed. “We’ve made quite a few sacrifices, and actually we intended to make even more,” he told MeetingsNet. “We just want a little skin in the game from the contractors, as well, and we’re still trying to negotiate that.”
Fulton explained that labor is billed to exhibitors in two categories. For an hour of work done in an actual booth, exhibitors pay $100 to $105, and workers receive about $63, including benefits.
Drayage is a different story because it is billed according to the weight of the exhibit materials being transported back and forth from the loading dock. Workers still receive $63 per hour, Fulton said, but exhibitors pay $45 to $145 per 100 pounds, or hundredweight. A competent, two-person team can move 10,000 pounds (100 hundredweight) of equipment in an hour, which means the contractor pays labor $126 for a move-in that costs the exhibitor $4,500 to $14,500.
In February, Fulton told local media an exhibitor might pay $17,000 for three union members who make under $200 for less than an hour’s work. In the same news report, McCormick Place General Manager David Causton pointed to work rule changes that are needed to align the facility with its competition. He said he favored auditing contractors’ books to flag savings that could be passed on to exhibitors.
Freeman Public Relations Manager Wendi Sabo said McCormick had audited the company’s exhibitor prices to ensure that savings had occurred, but “some of those savings were offset by significantly higher wage rates.” She declined to answer specific questions about contractor mark-ups.
“We are very supportive of efforts by Friends of McCormick Place (a group of the facility’s top customers) to examine ways to help lower costs and improve service for exhibitors in Chicago,” she said in an e-mail. “Labor reform and competition are the best ways to achieve those goals.”
“We support the current effort by the MPEA to bring Chicago into alignment with other major trade show cities in the United States,” said Pete Erickson, owner of The Motivation Show, which takes place at McCormick Place every fall. “If Chicago takes these bold steps, we’re confident that it will help The Motivation Show continue to grow in what we consider the leading location in the country, and that will expand the pie for everyone involved.”
And in the end, that’s the point. As the McCormick Place saga unfolds, all parties seem to agree that Chicago is the quintessential trade show town. Its local economy relies on the visitor trade. That trade, in turn, relies on a skilled labor force. That means everyone in the McCormick fight has an interest in anything that keeps the local industry strong, including rule changes that could appropriately come from the contractors as well as the unions.
Mitchell Beer, CMM, is president and CEO of The Conference Publishers Inc., one of the world’s leading specialists in capturing and repurposing conference content. Beer blogs at http://theconferencepublishers.com/blog. Send comments, facts, arguments, or column ideas to mitchell@theconferencepublishers.com.