Union push hinders housing production
Report indicates workers are sometimes paid not to work
DEMANDING CONSTRUCTION of more affordable housing is the right thing to do. Getting it done is another thing entirely, which is why it’s fair to question practices that slow the pace of or obstruct production altogether.
In Boston, the tradition of city officials arm-twisting developers to hire union workers has undoubtedly hurt affordable housing production. And when private companies have hired non-union contractors, they have felt labor’s sting, such as picketers with a large, inflatable rat and worksite disruptions.
For developers, it can be easier to go along to get along. But going along hurts the bottom line. Projects then skew toward more profitable commercial or high-end residential construction, sacrificing the less-lucrative, affordable housing.
Recently, activists cried foul that the redevelopment of Suffolk Downs included only 930 affordable units out of a total 10,000 proposed to be built exclusively by union labor. In an interesting twist, the developer pledged to buy 500 apartments in East Boston to designate as low-income. Apparently, it makes more financial sense to buy apartments to designate as affordable than to build new ones with only union labor.
There are several reasons union-only construction is more expensive. First, it limits bidding to only union contractors, and when competition is limited, prices go up.
Second, union contracts include inefficient rules that increase costs as illustrated by Skanska USA Building Inc. in a 2019 report to Worcester officials regarding the new ballpark project.
“One of the factors that increase construction costs on these projects are requirements from the unions to have some number of support workers on site at all times, whether needed or not. These workers merely drive up the cost without a resultant benefit to the project, but the unions require them,” states the Skanska report.
Think about that. A worker is paid not to work. At $87.09 per hour, an unused bricklayer would cost $174,180 per year. If there are 10 “support workers” – say from various trades on a project with scores of workers – the waste could easily exceed $1.7 million annually. How does affordable housing get built with this kind of waste?
In two recent reports on construction, the Beacon Hill Institute showed New Jersey’s costs increased 16.25 percent and Connecticut’s jumped 19.84 percent because of mandates to hire only union workers. Combined, the two states overpaid by more than $1 billion.
There is no evidence that union work is better. Merit shops deliver safe, quality and efficient construction. They build in all sectors of the economy, from health care to housing. They also pay competitive wages and fund benefits such as health insurance, retirement plans, paid time off, and so on.
Their employees are full-time and not laid off at the end of a job, unlike union members. All this may explain why 81.7 percent of the Massachusetts construction workforce in 2019 was non-union, according to unionstats.com.
No one is saying block union workers from affordable housing construction. Rather, developers should be encouraged to seek bids from all qualified contractors, regardless of union affiliation. This reduces the excuse that financial pressures lead to more lucrative commercial and high-end residential housing and less affordable housing production.When money is wasted in construction, less is built. Whether its schools or affordable housing, the lost potential is real and shameful.
Jason Kauppi is the president of the Merit Construction Alliance of Massachusetts, Inc., a trade association representing open shop contractors.