Monday, May 30, 2011

Stop swinging at union hardhats: Construction workers' rep says they've done their part to cut costs

Union workers aren't to blame for the downturn in the construction business.
BY Gary Labarbera

New York City's long-term economic strength depends heavily on a vibrant construction sector. But the construction industry has been hit hard by the recession and its fallout. Jobs are down more than 20% since 2008, and new buildings are not rising as they were only a few years ago.

In recent weeks, observers have tried to pin the blame for this situation on union construction workers, cynically assuming the public would forget the risky financial and investment practices that actually caused the economic problems we're all facing.

A review of the facts shows how silly this attempt at distraction has been - revealing that the challenges most important to the future of the construction industry have been apparent since long before the recession.

From 2000-2008, construction spending in the city increased by a whopping 121%, according to data from the New York Building Congress. Yet during the same period, construction workers' average annual incomes increased by about 3.5% and construction jobs increased by less than 10%.

So where did this massive increase in spending go? It clearly didn't mostly go into workers' paychecks or job creation. And while contractors say they've been trying to cut costs, they don't offer independently verifiable data to substantiate the claims.

Now there's a slowdown, and suddenly construction unions - the workers - are expected to bear the lion's share of the burden. What sense does that make?

We recognize that we live in a changing world. We realize we need to take substantial steps to reduce costs. For example, construction unions negotiated cost-cutting agreements with the Bloomberg administration for public school renovations and work on other government buildings that will save taxpayers some $335 million from 2010-2014 - after having already saved $221 million from 2005-2009.

Don't be misled by arguments mounted by right-wing researchers who are trying to convince the public that unionized construction workers are part of the problem.

That's what the Regional Plan Association argues in a report released last month. It states that disputes over which unions can perform certain tasks cause strikes that inflate costs by as much as 20%. The same report says union cost-cutting agreements geared at jump-starting private projects didn't work and that union members barely work on private projects any more.

In fact, contractors themselves have administered a union plan prohibiting such disputes from causing work stoppages. These disputes never slow work down.

And those union cost-cutting agreements that supposedly didn't work are being used on more than 70 private projects to stimulate some $15 billion of development all over the city - with thousands of union members working on them.

Rather than inflating costs, unions have been among the only players in the construction industry working hard to bring them down. As contractors know full well, labor costs often amount to half of "hard" construction costs, which don't even include big expenses like the cost of land and "soft" costs such as legal and architectural fees.

Unions can only control labor costs, not everything else on projects. On that, they are doing their share.

Large construction firms using union labor claim to be losing market share. Yet of the region's top 25 contractors ranked by revenue, almost all are unionized. This belies the notion that such contractors can't compete.

Union construction workers proudly built the skyline that defines New York City. If contractors and others in the industry worked harder at trimming their costs and inefficiencies, we could build more and create more good-paying jobs for middle-class New Yorkers.

LaBarbera is president of the 100,000-member Building and Construction Trades Council of Greater New York.

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