Organized labor may now have a little less leverage than it had a year or two ago at the peak of the construction boom, but construction workers are still in high demand and union members appear more willing to strike to squeeze the best deal they can from contractors as their multiyear collective-bargaining agreements expire.
Some of the increases are huge compared to the 3% average annual increases in wages and fringe benefits that the industry has seen in the union sector over the past decade. In Connecticut, a two-week carpenters' strike ended recently when the union accepted a 9% annual wage hike in each of the next four years for heavy/highway carpenters and 6.25% for building carpenters, says Marvin B. Morganbesser, president of the Connecticut Construction Industries Association, Wethersfield. The wage increases "could well hurt the industry in the long run," he says. Workloads are still strong, but signs of a slowdown are starting to show up, Morganbesser adds.
How long the union sector can maintain those increases remains to be seen. "Now that we're facing a slight downturn, it's going to be harder [for workers] to get these raises," says Denise Gold, labor and employment counsel for the Associated General Contractors, Alexandria, Va. Of the seven major trades tracked by AGC, she estimates settlements have been reached in half a dozen states this year, with at least a dozen more in negotiations. "It's not a particularly heavy [bargaining] year, but there's plenty of activity," she says.
Labor shortages still plague heavily unionized California. Three California trades recently reached settlements with annual wage hikes of "between 3% and 3.5%," up from an average of 2.5% during the 1990s, says Steve Clark, executive director of Bay Area operations for AGC of California, Concord. Operating engineers, laborers and teamsters negotiated four-year pacts calling for initial hourly wage hikes of $1.20, $0.95 and $1.26, respectively, he says. Continuing a trend building since 2000, "the agreement terms are getting longer," Clark adds.
California unions also negotiated provisions that allow retirees to return to the work force if less than 15% of the labor pool is out of work. "We have a tremendous work force shortage here and it's not going to go away," says Clark. The average age of area workers is over 50 and Clark's chapter is conducting outreach sessions at area high schools "to let students know there is a valid career path" in construction, he says.
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