A presentation at the recent CURT (Construction Users Round Table) Conference discussed the findings of a study that showed the true value of union labor on construction projects.
Conducted by Independent Project Analysis (IPA), the study entitled “The Value of Union Labor” was commissioned by the Mechanical Contractors Association of America (MCAA). It expanded on an earlier study that found union labor is more productive than open shop labor, and projects that employ union labor cost less despite the higher average all-in wage rate paid to union labor.
The Value of Union Labor confirmed the findings from the earlier IPA study, as it examined some underlying differences in union labor versus open shop labor that explains the differences in productivity and the overall effect on project outcomes.
The study was conducted nationwide with a diversity of projects and crafts. The results may not be shocking to those within the union construction industry. Still, the study’s actual value offers credibility that vindicates the value of union labor from a non-biased source.
This information may be helpful to contractors and end-users on many different levels.
Below are the 10 highlights of the study:
- Productivity for union labor is 14 percent higher versus open shop labor.
- Projects that use a mix of union and open shop labor have 8 percent better productivity than projects that use all open shop labor.
- The use of union labor reduces the total cost of projects by an average of 4 percent versus when open shop labor is used.
- The union craft labor and foremen have demonstrated a significantly higher level of skills versus open shop labor.
- Strong relationships exist between higher craft skills, lower project total costs, and better construction schedule predictability.
- Projects are 40 percent less likely to experience a shortage of skilled labor when union labor is sourced versus open shop labor.
- Projects that are short on skilled labor are twice as likely to have a 10 percent or higher cost overrun and are more likely to have a schedule slip of 25 percent or higher.
- Turnover of labor on projects is one-third less likely when union labor is employed versus open shop labor.
- Turnover of labor is linked to worse project cost and schedule outcomes.
- Projects using a mix of union and open shop labor saw benefits from union labor in each of the performance measures versus projects that employ solely open shop labor.
This study was conducted for the Mechanical Industry Advancement Fund (MIAF), a national joint Labor-Management cooperative committee established and operated by trustees appointed by the United Association of Plumbers and Pipefitters (UA) and the Mechanical Contractors Association of America (MCAA).
Click here to download the full report.