A new report released today by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) indicates that from 2010 to 2011, 874,000 workers in the private construction industry belonged to a union, the second lowest number of construction union members since BLS started tracking this information in 1973.
According to BLS data, the construction industry recorded the lowest number of union members in 2010, when just 801,000 private construction workers belonged to a union.
From 2010 to 2011, union membership grew from 13.1 percent to 14 percent of the U.S. private construction workforce, with construction unions adding 73,000 new members.
The recession has hit the construction industry hard. The average construction industry unemployment rate in 2011 is 16.4 percent. According to government data, the current industry unemployment rate is at 16 percent, but it was as high as 22.5 percent in Jan. 2011 .
The construction industry has shown few signs of improvement. From 2010 to 2011, the construction industry added 141,000 jobs and grew from 6,103,000 workers to 6,244,000 workers. However, this few workers have not been employed in the construction industry since 1998, when 5,946,500 workers were employed and 17.8 percent of the workforce was unionized, according to the Union Membership and Coverage Database, available at www.unionstats.com. In addition, government data indicates construction spending has been flat.
Update: www.unionstats.com has released state specific union membership information for various industries, including construction (see table II), for the year 2011.
Government-Mandated PLAs Create Jobs for Union Members
So how will the decline in overall construction union membership change the public policy debate surrounding government-mandated project labor agreements (PLAs) and President Obama’s pro-PLA Executive Order 13502?
In short, there will be added pressure on politicians to pander to Big Labor’s special interests and help keep their political base afloat. As they did in 2009 and 2010, the White House, members of Congress and federal officials beholden to Big Labor’s costly special interest agenda will try to steer federal construction contracts to unionized employers and create jobs exclusively for union members through federal government-mandated PLAs. On April 13, 2010, the Federal Acquisition Regulatory (FAR) Council issued a final rule (pdf), effective May 13, implementing President Obama’s Feb. 6, 2009, pro-PLA Executive Order 13502 into federal procurement regulations.
While the final rule does not mandate PLAs on all federal construction projects — and it offers agencies some flexibility when deciding whether to mandate a PLA on a specific large-scale construction project — the regulation is nothing but a handout to special interests.
The decision to agree to a PLA should be left up to individual contractors and not forced onto qualified contractors by government agencies as a condition of winning a federal construction contract. PLAs mandates reduce competition, increase costs and steer contracts to unionized firms.
This election year, special interests and their political allies will turn up the heat on federal bureaucrats to ensure more PLAs are attached to federal construction projects and other taxpayer-funded construction projects.
After all, numerous elected officials have a politically motivated self-interest in creating jobs for construction union members. Fewer union jobs spells disaster for union institutions, union retirement plans and the politicians that depend on union contributions to get elected and pass public policy favoring Big Labor.
Politicians understand that a lack of union jobs in the construction industry means fewer union dues and “voluntary” political contributions deducted from union members’ paychecks that are funneled into various union slush funds coordinated through Labor Management Cooperation Committees (LMCCs), 527 groups and Political Action Committees (PACs) that support Big Labor’s friends in politics.
This symbiotic relationship between Big Labor and its political chums cannot continue without healthy union institutions and political contributions from labor unions that fuel the Democrats’ political machine.
So the latest union membership numbers—coupled with high unemployment in the construction industry and the complex relationship of entities dependent on union revenue—point to a greater push for local, state and federal governments to mandate PLAs at the expense of taxpayers and the merit shop contracting community.
There are valid economic and ethical reasons why promoting the special interests of Big Labor, which composes just 14 percent of the U.S. private construction workforce, ahead of the needs of the rest of the construction industry through PLAs is bad public policy.
For example, on prevailing wage projects, PLAs on average increase the cost of construction between 12 percent and 18 percent compared to similar non-PLA mandated projects. With the added cost premium of anti-competitive PLAs, there is less construction money available. And less construction money means fewer total construction projects and construction jobs. So union-favoring PLAs could make unemployment in the construction industry even worse.
In addition, there is no compelling reason (other than political self-interest) to create jobs for union members ahead of nonunion employees via government-mandated PLAs. Qualified nonunion employees deserve just as fair a shot to feed their families as union members. Unions should use the ultra-competitive market and tough economy as an opportunity to retool their product and make it more lean and efficient to compete in today’s marketplace instead of relying on government handouts to stay relevant.
The U.S. economy and the construction industry would benefit from free and open competition, without corrupt government-mandated PLAs, where taxpayers can get the best possible construction product at the best possible price.