According to data from the Bureau of Labor Statistics’ annual union members summary report published Jan. 22, 2021, union membership in the construction industry declined in 2020.
Just 12.7% of wage and salary workers were members of unions in the U.S. private construction industry in 2020, a slight increase from 12.6% in 2019.
According to BLS data, construction unions lost 62,000 members in a year-over-year comparison (1.055 million union members in 2019 to 993,000 union members in 2020), as the U.S. construction industry lost near 500,000 jobs (8.352 million workers in 2019 to 7.829 million workers in 2020) due to the economic downturn caused by COVID-19.
BLS data suggests the recent economic woes had a larger negative impact on nonunion workers in the construction industry, overall. However, union membership as a percentage of the U.S. construction industry has steadily declined throughout the last 75 years. In 1947, approximately 87% of its workforce was unionized. During the nadir of the construction industry’s recession in 2010, just 801,000 construction industry workers belonged to a union (13.1% ), the smallest number of union members in recent history.
Updated state-specific union membership information for various U.S. industries, including the construction industry, will be available at Table II of unionstats.com.
Construction Industry Unemployment Increased in 2020
The nonresidential merit shop construction sector continues to perform relatively well, despite the pandemic. In a YoY comparison, construction backlog fell to 7.3 months in December 2020 compared to 8.8 months in December 2019, according to ABC’s Construction Backlog Indicator. And the latest ABC Construction Confidence Index decreased YoY with respect to sales, profit margins and staffing.
The most recent BLS data pegs the construction industry unemployment rate at 9.6% for December 2020, compared to a decade-low 5% unemployment in December 2019. In contrast, the construction industry unemployment rate was 27.1% in February 2010 at the peak of the prior recession.
Data on the construction industry’s union membership can impact the public policy debate surrounding anti-competitive and costly government-mandated project labor agreements on taxpayer-funded construction projects.
When mandated by lawmakers on construction projects, PLAs typically ensure construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of most or all of its existing qualified employees; obtain apprentices exclusively through union apprenticeship programs; follow inefficient union work rules; pay into union benefit and multi-employer pension plans workers will never benefit from unless they meet vesting requirements; and force workers to pay union dues and/or join a union as a condition of employment.
Discouraging competition from qualified merit shop contractors and their skilled nonunion construction workforce via government-mandated PLAs costs taxpayers a fortune. When mandated by a government agency on taxpayer-funded projects, PLAs drive up the cost of construction projects anywhere from 12% to 20%, on average, according to a series of academic studies.
A study released in January 2020 by the Beacon Hill Institute found that Connecticut schools built under controversial government-mandated PLAs cost 19.8% more than schools that were bid and constructed through fair and open competition, free from PLA requirements. Similar research by the Beacon Hill Institute on the impact of PLA mandates on school construction in New Jersey (2019), Ohio (2017), New York (2006) and Massachusetts (2006) found schools built with government-mandated PLAs were 12% to 20% more expensive compared to school projects not built with PLAs.
According to a model developed by Markstein Advisors, every $1 billion in extra overall construction spending generates an average of at least 6,500 construction jobs, and every $1 billion in extra construction spending on infrastructure generates an average of at least 3,300 construction jobs. As the construction industry faces a 9.6% Dec. 2020 unemployment rate due to the economic slowdown caused by COVID-19, and America’s infrastructure faces a $5.6 trillion infrastructure spending deficit by 2035, lawmakers need to be doing all they can to maximize taxpayer investments in infrastructure while helping all construction workers find quality jobs to rebuild their communities.
In 2021, ABC will continue to fight for federal, state and local policies that create a level playing field in the procurement of government construction contracts, increase competition, help small businesses grow, curb construction costs and create jobs and opportunities for all Americans and all qualified construction industry businesses.
Advocating for inclusive policies so all Americans and all qualified companies can rebuild America’s infrastructure is a win-win for taxpayers and the U.S. economy.