The Union Difference in Construction
Better Outcomes for Workers
Since the 1930s, unions have been associated with improving the economic, health and social well-being of workers across America.
Recent research by the Midwest Economic Policy Institute (MEPI) and Project for Middle Class Renewal at the University of Illinois Urbana-Champaign (UIUC) has quantified these impacts for Minnesota’s construction workforce.
Specifically, it was found that Minnesota’s unionized construction workers earned significantly higher wages, were more likely to have employer sponsored health insurance and access to a pension plan, suffered less wage inequality, and had substantially fewer health and safety problems at work than their non-union peers.
|MN Construction Worker Metric||Union Workers||Non-Union||Union Difference|
|Average Annual Construction Wage – All Trades||$69,383||$52,724||Up 32%|
|Share of Workforce Earning Less than $15/hour||3.4%||14%||Down 10.6%|
|Covered by Health Insurance Plan at work||91.3%||48.7%||Up 42.6%|
|Covered by Pension Plan at work||60.2%||36.1%||Up 24.1%|
|Relies on Food Stamps (SNAP)||0.9%||13.6%||Down 12.7%|
|Active Registered Apprentices (All Trades)||10,219 (93%)||816 (7%)||Up 1,152%|
|OSHA Safety Violations Per Investigation||0.7||1.2||Down 48%|
Additionally, this data found that joint labor management programs financed through collective bargaining agreements produced 93% of the state’s skilled construction apprenticeship opportunities.
Notably, the data also showed these workplace benefits with improved mobility and stability outside of work—concluding that union members were also more likely to be homeowners and considerably more likely to be married than their non-union counterparts. And, because of their wage levels, these workers are able to live in the communities they are benefitting through their work on schools, roads, parks, etc.
Unions = Cost Competitive
A recent study that examined 640 school construction projects in the Minneapolis-St. Paul region concluded that union contractors are no more expensive than nonunion contractors.
Why? Because while labor represents less than a quarter of total costs on an average project, these expenditures directly improve an employers’ ability to attract and retain sufficiently skilled workers that can deliver on the jobsite.
More recent research has demonstrated that unionized worksites deliver productivity gains of 15%, as well as more efficient utilization of project cost components like fuels and materials, improved safety outcomes, and a 40% reduction in the risk of cost or schedule overruns.
These gains more than offset any effects from employers paying higher wage or benefit rates to their blue collar workforce.
Minnesota’s unionized construction industry is building a stronger Minnesota by investing in the kind of job quality that controls construction costs, attaches workers to in-demand careers in the skilled trades, and delivers the highest standards of safety, productivity, and efficiency on the jobsite.
Better for Public Budgets & Economy
Minnesota’s unionized construction is not only good for workers and cost competitive—it strengthens public budgets and our economy.
According to University of Minnesota economists, “union members contribute approximately $1,110 more in taxes and receive about $180 less in social safety net benefits, on average, than nonunion workers—positively impacting public budgets by $1,290 per member.”
In Minnesota’s construction industry, the effects are even more pronounced, with union construction workers contribute nearly 50% more in state and federal taxes on average, while being 13% less likely to rely on publicly funded assistance programs like Food Stamps and Earned income tax credits.
Local businesses and communities can also benefit. Research has found that strong labor standards, such as those negotiated through collective bargaining agreements, can increase the share of construction bids being awarded to Minnesota-based firms by as much as 10%.”
More broadly, the income earned and spent by union workers in Minnesota translates to jobs and growth across other parts of the economy. It is estimated that annual consumer spending by Minnesota’s 41,000 unionized construction workers supports nearly 16,000 additional jobs in healthcare, transportation, business services, retail and other sectors, growing the state’s annual economic output by nearly $2.7 billion.
Clean Energy and the Future of Unionized Construction in Minnesota
Not including new federal infrastructure investments, Minnesota’s annual construction output is expected to grow by nearly $4 billion over the next decade. Alongside traditional construction investments in roads, highways, bridges, utilities, schools, hospitals, housing and commercial facilities, this is also expected to include new investments that will transition the nation’s power infrastructure towards cleaner sources of energy.
More than half of our state’s current energy mix comes from renewable sources. Economic research shows the industry currently employs more than 61,000 Minnesotans, with employment in this sector growing by nearly 5% between 2017 and 2018. The state is one of the nation’s leaders in its capacity for wind energy production. This data also notes that “every $1 billion invested in clean energy creates 7,300 jobs and $1.3 billion in economic activity.”
These dynamics should continue to create new opportunities for unionized construction workers in a range of occupations, including in manufacturing, construction, and installation of clean energy facilities, alongside a reliable workforce pipeline to produce the skilled labor that will be needed to meet the rapidly growing demand for these projects. Click here to learn more about opportunities in Minnesota’s clean energy sector.
What Construction Leaders are Saying
“…the same study examined 640 school construction projects in the Minneapolis-St. Paul region and found no overall cost difference between those built by union firms, and those built by non-union firms. The reason why is because labor comprises less than a quarter of total construction project costs.” (Read more)
“Union workers complete years of apprenticeship training, through programs that are jointly financed and administered through collective bargaining agreements with their employers. This results in a higher skilled workforce, more employee retention, higher levels of productivity and improved safety outcomes on the jobsite. It means less waste of things like fuel and materials, not to mention less reliance on public assistance programs.” (Read more)