Building NYC Facts
Providing information to combat misinformation and correct the record:
Myth of union safety:
“There has been a strong debate in recent years over how safety at union and nonunion construction sites compare, with union advocates alleging that construction sites that are unionized are safer than non-union construction sites. This argument has become part of the larger debate over whether to require the prevailing, or union-negotiated, wage at affordable housing projects that receive 421-a property tax abatements. But a new analysis of the actual data reveals that the opposite is true.”
1. Construction Fatalities and Labor Status 2008-2014: We must look at the participation rate. “During this time period, the average labor participation rate at New York Stateconstruction sites was 73% non-union and 27% union. However, the number of fatalities shows that the fatality rate at union construction sites was higher than the union participation rate.”
- There were 93 construction site fatalities in New York City between 2008 and 2014; 60 fatalities or 65% occurred at non-union sites while 33 or 35% occurred at union sites.
- The percentage of fatalities of union workers was often higher than the union labor participation rates between 2008 and 2014. If union jobs were safer, the percentage of fatal incidents would be lower than the participation rate.
Conclusion: “This analysis demonstrates that there is no evidence to suggest that non-union construction sites are less safe than union sites, rather the opposite. The reason is that both union and non-union developers are committed to worker safety and that all construction sites are subject to the same New York City, State, and Federal safety standards.”
2. Strong Standards and Oversight Protects Workers: “It is strong standards, not the presence of a union that protects worker safety. Since 2008, New York City has enacted more than 25 laws to enhance safety at construction sites, including new safety training course, stronger certification for crane operators and third-party inspections of construction sites.
- Poor and Corrupt Oversight Real Threat to Safety: “The sheer volume of construction activity in the city makes regulating it challenging.” (http://www.nytimes.com/2015/11/27/nyregion/rise-in-new-york-construction-deaths-strikes-the-poor-and-undocumented.html?_r=0 )
- De Blasio plans to hire 100 more inspectors; “But the Buildings Department and the Department of Housing Preservation and Development have historically been plagued by corruption.”
- Corruption: “The construction industry is no stranger to corruption problems. Recently, there has been a surge of officials cracking down on corrupt developers and construction executives who used their businesses for their own gain. To combat corruption in the construction industry, the Manhattan DA launched a task force earlier this month to identify and prosecute corruption in New York City’s construction industry. With efforts like the Manhattan task force, the industry as a whole could start to see an influx of corruption charges and punishments designed to deter similar practices.” http://www.constructiondive.com/news/10-trends-defining-the-construction-industry/404564/
3. Union Hypocrisy
Using low wage workers to protest: http://nypost.com/2015/09/08/carpenters-union-workers-protest-10-an-hour-wages/
“This is hypocrisy. The unions want to raise costs that are hurtful to business, but they don’t practice what they preach,” said Mike Durant, president of the New York chapter of the National Federation of Independent Businesses.”
More concerned about their own hefty salaries: http://watchdog.org/212919/union-bosses-2014/
“America’s union membership rate is in the midst of a decades-long decline, but labor union officials always seem to get paid. In 2013, 472 union officers and employees were paid more than $250,000 each…”
- United Association of Plumbers & Pipefitters: 56 union officers and employees paid more than $250,000 in 2014
- International Union of Operating Engineers: 34
- United Brotherhood of Carpenters: 28
- International Brotherhood of Electrical Workers: 15
- International Association of Machinists: 14
- International Union of Painters & Allied Trades: 10
Building and Construction Trades Council president Gary LaBarbera collected $218,308.
High wages of labor leaders threatened: “The construction union bosses fighting Mayor de Blasio over the city’s “prevailing wage” issue all collect hefty salaries — and most don’t even reside in the city, records reveal. The average salary of the top 26 executives of the New York City Building and Construction Trades Council is $191,934 — more than Gov. Cuomo’s $179,000 salary. Twenty-four of the 26 officials reside in the suburbs, not the five boroughs.
The highest paid union official is Edwin Christian, business manager of Operating Engineers Union Local 14, who raked in $314,920 last year, according to records filed with the US Labor Department…” (http://nypost.com/2015/06/01/construction-bosses-rake-in-big-bucks-compared-to-workers/ )
4. Collateral Damage of prevailing wage:
- “Prevailing wage results in less affordable units
- Prevailing wage more than triples public subsidy required for affordable housing.
- With existing resources, prevailing wage mandates cut production of affordable housing by more than half by increasing subsidy requirements.
- On an actual project funded by the New York City Department of Housing Preservation and Development (HPD) completed in late 2014, prevailing wage would have increased the HPD subsidy required from $3.5MM to $13.2MM.
- Fewer Jobs: “With existing resources, prevailing wage results in fewer construction job opportunities as fewer projects are built because of high labor costs.
5. Prevailing wage hurts small businesses and local hiring:
- Prevailing wage significantly increases administrative costs, burdening small, local businesses that do not have the administrative capacity to comply.
- Merit contractors working on affordable housing have a history of hiring from the communities in which they work. High labor costs and administrative burdens imposed by prevailing wage make it more difficult to for Merit contractors to build affordable housing, which hurts local hiring.
6. Regional Plan Study of Construction Costs (2011); Antiquated Work Rules of Traditional Construction Erodes Efficiency and Increases Costs
“This report is not focused on wages and benefits, though they are discussed. It is about work rules and practices that impede productivity—and that are driving union developers and contractors to choose open and merit shops rather than union contracts. Open shops are 20-30 percent less expensive than union shops. Most of this differential could be bridged by enforcing a fully productive 8-hour workday earning an 8-hour paycheck.”
- Union work rules impede productivity: “The legacy of a century of jurisdictional battles memorialized in highly prescriptive collective bargaining documents has shaped a culture in which work responsibilities are strictly defined and categorized, delimiting what a given worker will or will not do and creating a legalistic atmosphere that is hostile to productivity. These conflicts lead to excessive wastes of time on the work site, while workers from one trade wait for workers from another trade to complete a task affecting the critical path.:
- Featherbedding: “The most contentious area of featherbedding is probably standby services, by which employers are contractually required to have steamfitters, electricians, and plumbers present full time to monitor heat, electricity, and water serving the construction site, even when the services are completely unneeded.”
- Unionized construction is headed for the dustbin: “If current trends continue, time alone will gradually erode union construction in New York until it becomes a minor player, the province of very large development alone.”
- Loss of market share: Costs cannot be sustained-and the public is the eventual victim: “And while New York’s high construction costs put the city itself at a competitive disadvantage in relation to other cities, they also place a disproportionate burden on New York households. New York has become prohibitively expensive for almost all households except the extremely wealthy and the governmentally subsidized.”
- Cost driving out unions: “Meanwhile, as construction costs climbed and financing for new construction evaporated, individual developers and contractors started making different decisions. The city saw an increase in open-shop development sites—that is, major construction undertaken with nonunion workers alongside union labor. The open-shop phenomenon had been growing for many years, mainly through the affordable-housing industry, which has usually been almost exclusively nonunion. Originally low-rise and inexpensive, affordable housing construction has functioned as the time-honored training ground, converting cheap, sometimes unskilled, immigrant labor over time, into skilled labor paid wages that are equivalent to union rates. Nonetheless, due mainly to the costs of benefits and work rules, nonunion labor remains far less expensive than union and, equally important, is free of featherbedding practices and customs.”
- Quality Gap shrinking: “All segments of the industry agree—at least in private—that the union advantage in quality and speed of construction has diminished with every new project that is built nonunion.4 This may be the most important—and enduring—construction trend of our time.” (p.8; Tolll Brothers Brooklyn project cited)
- 20%-30% differential: “The consensus among developers and contractors—both union and nonunion—is that the price tag on nonunion labor is between 20 and 30 percent lower than on union labor. Some of the cost differential comes from lower nonunion wages and benefits, but most derives from unproductive union-mandated work rules and practices.”
Conclusion from the RPA:
“Inefficiencies must be rooted out: “The Issue: For the long-term good of the industry, the entire management-labor structure needs to be reconsidered and rationalized along modern management principles. There need to be clear lines of authority between employer and employee. The large number of independent negotiating parties sows confusion, contradiction and expense—and defies principles of rational management. No business can survive long term with such inherent inefficiency.”
- Emerging Construction Firms Boon to Immigrant Workers: “In the unregulated part of the industry, workers are hired directly by contractors or subcontractors (rather than through a union hiring hall). Some find jobs through social and family networks, in which case they may work together for the same contractor over a period of time…Workers tend to be recent immigrants, both documented and undocumented, and come to the industry with widely varying skills.” (http://www.brennancenter.org/sites/default/files/legacy/d/download_file_49377.pdf)
- “While 48% of all New York City workers are foreign-born, 64% of construction trades workers are foreign-born. Immigrants account for at least 50% of the five major trades occupations and for 54% of first-line supervisors. The immigrant share of occupations is highest for the least-skilled painters and laborers categories. Immigrants who have come to the U.S. within the past five or six years account for nearly one quarter of laborers (23%) and for nearly 21% of painters. Across all construction trades, recent immigrants represent nearly 15% of the total, more than twice their 6.6% share of all city workers.” (Fiscal Policy Institute Study, 2006)
- Borough breakdown: “Of the 168,200 construction industry workers who lived in New York City in 2010, 63,600 were Queens residents. Another 53,700 lived in Brooklyn, followed by 24,200 from The Bronx, 14,400 from Staten Island, and 12,300 who lived in Manhattan.”
- Immigrants dominate: “Non-United States citizens accounted for 39 percent of the total construction industry workforce and 45 percent of all construction trades workers. In addition, 56 percent of all respondents said they speak a language other than English in their homes. After English speakers, the largest percentage of workers speak Spanish (34 percent), followed by Chinese (3.2 percent) and Polish (2.7 percent)” (https://www.buildingcongress.com/outlook/122111.html)