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Studies Show That Unions Work

Labor Productivity

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While reliable studies of craft labor productivity in the U.S. are in short supply, a few recent reports that specifically address changing trends in construction over the last decade indicate declines in productive output of skilled trades and rising project costs can be traced to gaps in education and training among non-union workers.

Studies Show That Unions Work
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William P. Hite
HITE

Extensive research conducted by noted organizations in the public and private sectors both attest to this trend. These include one groundbreaking study from the private research firm Independent Research Analysis Inc. (IPA) and another key report from the National Institute of Standards and Technology (NIST), an agency of the U.S. Commerce Dept.

Introduced at a 2009 conference of the Construction Users Roundtable, an owners' group, the NIST report shows that construction clearly is facing a serious problem of declining productivity. In fact, the institute cites several academic and industry studies that say the rate of labor productivity growth in U.S. construction is among the lowest, if not the lowest, of all non-farm industries.

One root cause of declining productivity, according to the NIST report, is the failure of a large segment of the industry—that is, non-union construction—to provide skills training to craftspeople. As non-union firms have won a growing share of the market over the past several decades, this trend has accelerated, says the NIST study. This finding by the NIST is consistent with the results of a number of apprenticeship studies from around the country.

The NIST research shows that the union sector has long maintained effective training programs, while non-union firms still struggle to train and retain craft personnel. This means that as project owners award a larger share of work to the non-union sector, fewer workers are getting trained.

If 70% of non-residential work is directed to non-union firms, effective skills training will reach only 30% of the industrial and commercial craft workforce. It's simple math.

Vital Concern

The steep decline in training, at least on the non-union side, is obviously an issue of vital concern to project owners. They will be most affected by the lack of skills training and ultimately will pay for it if this problem is not corrected.

Notwithstanding the recession, which only masks long-term supply problems in the construction labor market, owners have identified craft skills shortages and related productivity and cost problems as construction's single most important area of concern.

The recent NIST study confirms these fears. However, it also reveals that project owners who award work to non-union firms that don't provide adequate craft training are a key driving force in this looming crisis.

So what happens when project owners award work to firms in the union sector that do invest in maintaining effective skills training programs? The most obvious impact, as determined by objective measurable standards, is that they get significantly greater productivity on their jobsites, not to mention better quality and cost control, as demonstrated by the other most recent report on this subject.

IPA's study—presented by Dean P. Findley, the firm's North America regional director, at CURT's 2007 annual conference—also provides a similar conclusion. In reviewing data from nearly 1,200 construction projects in the U.S. and Europe, he noted that craft labor productivity was almost 17% greater on union projects. When union and non-union jobsites were compared, there was “little variation in effective labor cost from region to region,” Findley said.

As the IPA report conclusively shows, while labor costs are often comparable, there is a vast difference in labor productivity between union and non-union craft labor pools. It further indicates that higher labor productivity not only reduces overall project costs but improves schedule and quality.

The United Association invests more than $200 million annually in its apprenticeship and craft journey-worker training programs. It pays off: Among ENR's list of top mechanical contractors, between 80% and 90% of the firms ranked are our signatory contractors.

 

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