Why Government Should Consider Spending Tax Dollars on Open-Shop Construction

The demonstrations being waged by some unions within the Building and Construction Trades Council of Greater New York (BCTC) outside of the Hudson Yards development project on Manhattan’s West Side are a sad statement on the inability of these unions to compete in today’s workplace.

Let’s put this in perspective. These building trade unions are not picketing a non-union job site. They are picketing a site that probably employs more unionized construction workers than any other private sector development in the United States. They are picketing Related, which is currently the largest employer of private-sector union construction workers in New York City.

How did the BCTC find itself in this moment where it is attacking the very entities that employ its members?

Several of BCTC’s unions have refused to abandon outdated work rules and adopt a more cost-effective and competitive wage and benefit structure. Instead, their leaders espouse progressive rhetoric, railing against income inequality and fair wages for workers – all while many of its members are making annual salaries well over $100,000. They refuse to address work rules that permit some of their members to be paid $42/hour plus overtime to deliver coffee, while running fraudulent scams on the side, charging their colleagues for food and beverages.

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The refusal of such unions to make reforms and be more economically competitive has been replicated throughout the city and has led to the rise of open-shop construction. Open shop construction simply means that both union and non-union contractors are provided an opportunity to bid for work on a construction job. In the case of 55 Hudson Yards, which several BCTC unions are picketing, open shop bidding has led to 92 percent of the work going to union contractors. That is not good enough for the BCTC or its non-competitive unions though.

Instead, the BCTC wants developers, including Related, to sign Project Labor Agreements (PLA) which would require all work on a construction site use union labor purportedly in exchange for reduced costs and labor harmony. There was a period of time when many REBNY members signed PLAs. Experience showed, however, that the promise of cost savings was not realized. Furthermore, PLA sites were subject to labor strikes by construction trade unions despite explicit written guarantees that such actions would not occur. As a result, PLAs have been discredited and are being used much less frequently in the private sector.

It is becoming increasingly clear that the wasteful practices of some BCTC unions are not limited to the private sector. Taxpayers are bearing the cost of such practices as well. Media reports early this year showed that subway construction undertaken by the Metropolitan Transportation Authority (MTA) is exponentially costlier when compared to similar projects throughout the world. At the New York City Housing Authority (NYCHA), tenants experience long delays in securing much needed repairs. One common denominator in each instance is that the MTA and NYCHA are bound to use union contractors and laborers only.

One solution would be for such government agencies to employ open-shop construction moving forward. More contractors would bid for the work and it would put pressure on union contractors and laborers to become more competitive and eliminate wasteful practices. Employing open shop construction in public agencies will not win elected officials accolades or endorsements from the politically active building trade unions.

Taxpayers, however, will come out the winners knowing that their tax dollars are being put to better use.