Dive Brief:
- In an op-ed piece for the Commercial Observer, Kenneth Thomas, executive director of the New York Construction Alliance, said the U.S. Supreme Court's recent decision that public-sector employees who are not union members cannot be forced to foot the bill for collective bargaining is "hardly the death knell" to organized labor in New York City.
- Although the Janus case deals with the public sector, Johnson said it could spark a discussion within the private sector about how construction trade unions collect and spend dues and how they engage with private-industry players. He said the Janus decision was not "an indictment" of trade unions, but "a qualifier in terms of how organized labor may need to moderate its agendas in the future."
- Johnson wrote that the conversation in the New York City construction market, where there has been a trend toward more "open-shop" contracting in recent years, should be about how to more efficiently carry out the building process, whether by union or nonunion crews. Ultimately, however, he said that market forces will determine "how all of us industry stakeholders have to interact with each other in the sandbox."
Dive Insight:
New York City has long been a stronghold of trade union labor, but has seen that grip loosen as nonunion, or "open-shop," contractors appeal to developers' desire to circumvent what they might perceive as onerous union work rules and more expensive wage and benefit rates. In fact, the use of union wage rates in Turner & Townsend's 2018 International Construction Market Survey left New York City's average, per-hour construction wage of $98.30 second only to the $104 per hour that construction workers in Zurich, Switzerland, earn. Wages and other construction costs made New York City the most expensive place to build in the world.
So, some developers have brought on nonunion employees, often working in tandem on the job with trade unions, to cut those costs. A survey found that unions make up about 65% of the Manhattan construction labor force but not even 40% of labor on jobs in the Bronx, Staten Island, Brooklyn and Queens. In addition, private-sector wage rates can dip as low as $15 per hour.
Inevitably, this has led to a clash between unions and some developers like Related Cos., the developer of the $25 billion Hudson Yards project in Manhattan.
Related filed a lawsuit against the Building and Construction Trades Council of Greater New York objecting to the terms of a new project labor agreement, claiming that some unions that were part of a previous agreement for Hudson Yards bilked it out of $100 million during the first phase of the project. The Trades Council also filed a complaint against Related with the National Labor Relations Board alleging that the company engaged in unlawful anti-union activities at Hudson Yards.
