Dive Brief:

• A new report says collective bargaining agreements help create "robust" middle-class careers and make significant contributions to local economies. The report, released this week, was produced by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign.
• The authors analyzed CBAs between the Mid-America Regional Bargaining Association and eight trade unions in the Chicago area. They found that a typical union journeyworker earns $77,300 per year, which is comparable to that of urban Illinois workers with bachelor's degrees. The study also found that apprenticeship programs paid by CBAs turn out 97% of all local construction apprentices.
• CBAs, the authors wrote, supported $7.5 billion in wages for 97,000 northeastern Illinois union construction workers in 2019 and, through worker spending, created 49,000 additional jobs per year in other industries. Without CBAs, economic activity in northeastern Illinois would decrease by $2.2 billion each year and lose 13,000 jobs, the report said. At the state level, Illinois would lose $315 million total in sales and income tax revenues, and local governments would lose $251 million in property tax revenues.

Dive Insight:

CBAs are agreements negotiated between employers and unions and cover work terms like rates of pay and other conditions of employment. The study said additional benefits for construction workers in northeastern Illinois covered by CBAs were:

• Wages increased by 11% over three years, beating a 6% rate of inflation.
• The union worker household homeownership rate is 76% compared to 73% for nonunion worker households.
• Union workers are covered by private health insurance at a rate of 98% compared to 70% for their nonunion counterparts. 
• Only 3% of union construction workers receive assistance via the Earned Income Tax Credit (EITC) compared to 12% of nonunion construction workers.

The big takeaway from the report, said coauthor Frank Manzo, policy director at the IEPI, is that collective bargaining agreements have positive economic impacts beyond just paychecks and that the study can serve as an example of how CBAs benefit communities.

"The Chicago area's construction industry offers a roadmap for family-sustaining careers in a post-COVID economy and, in particular, in construction," said Manzo.

Some construction employer groups, like the Associated Builders and Contractors Illinois Chapter, take issue with the suggestion that CBAs might be necessary in order for workers to achieve financial success.

"The construction industry provides an ideal career path to the middle class, regardless of union affiliation," said Alicia Martin, president of the ABC Illinois Chapter. Martin said that merit shop workers have more take-home pay than their union counterparts, but the ABC could not provide any state or national data on nonunion construction wages.

Martin did point to statistics from the Bureau of Labor Statistics' Current Population Survey that found in 2019 there were more nonunion construction workers in Illinois than union workers, although the survey did not report wage data. 

However, according to coauthor Robert Bruno, director of the labor education program at PMCR, CBAs provide an opportunity for employers and workers to sit down, without government mandate, and decide what’s needed for the employer to be profitable and for workers to earn a fair wage.

“I think what people don’t get,” Bruno said, “is that the collective bargaining process empowers the parties to put on the table what is important to them — to both parties — with an understanding and appreciation that compromise is absolutely essential. … It is an incredibly powerful problem-solving tool to bring these two parties together who defend their own interests but then find common ground.”