Building Trades

Construction Unions Are Losing Their Market Share of New Building Projects

March 25, 2011
By Harry Kelber

New York City’s construction unions, that controlled more than 90 percent of the building industry’s jobs throughout most of the 20th century, have lost a significant market share of the $20 to $30 billion spent annually on erecting new buildings and repairing old ones.

While there are no official statistics, two out of five (about 40 percent) construction jobs in the city are said to be built non union, although unions put the number at one to four (25 percent). Competition between unionized companies and their non union rivals became intense during the economic recession, when there was a decline in available new construction projects.

The construction unions, whose members earn relatively high wages, and are composed of mostly of blue collar workers, were regarded as the backbone of the city’s middle class, until the drop in construction began to lower their living standards.

At a time when construction companies and developers became more cost conscious, non unionized firms had an obvious appeal: They could out compete unionized companies on price, They could help contractors who wanted to lower their labor costs by as much as 25 percent. Developers, too, were aiming at labor savings of 20 percent.

The one big problem for the non union companies is to assemble a low wage work force of all the necessary crafts that could erect high riser buildings. They might have to employ workers that are inadequately trained, but are willing to work at much lower wage rates. Non union construction companies make direct appeals for workers in various crafts, even setting up a web site and using ads to lure them away from unionized firms with promises of steady work.

The unionized firms could offer a contractor work crews with years of training experience in every craft, from carpenters, plumbers and electricians to iron workers, painters and operating engineers. They emphasize the quality of their product, particularly the safety features. Yet unionized firms have been forced to make concessions in benefits and working practices in order to hold on to big contracts..

March 24, 2011

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