New Book Examines History of War on Building Trades Unions & Provides Blueprint for Rebuilding Union Density in Construction
In January 2020, author and organizer Mark Erlich, a retired Executive Secretary-Treasurer of the New England Regional Council of Carpenters, visited the site of the tragic Hard Rock Hotel collapse that left three people dead and 30 others injured near the French Quarter of New Orleans three months earlier. What he saw was horrifying. More than 100 construction workers had been working on the new 350-room hotel when the structure began crumbling, then collapsed in an enormous cloud of dust and debris. The three deceased workers included 36-year-old Quinnyon Wimberly, 49-year-old Anthony Floyd Magrette and 63-year-old Jose Ponce Arreola.
For three days, search and rescue teams scoured the wreckage for the victims, but they couldn’t reach Arreola and Wimberly for several months due to the instability of the collapsed structure and the inability of the various parties involved to assume responsibility for the disaster. Shortly after Erlich arrived, strong winds broke the ropes on the tarps covering the bodies, exposing the corpses. It wasn’t until ten months later that the bodies were removed.
Workers had repeatedly raised concerns about the safety of the structure before it collapsed, but, like the two deceased men, many of them were undocumented immigrants and there was a risk for whistleblowers. Following the collapse, Fish and Wildlife agents interviewed one of the workers. After learning he was undocumented, they reported him to Border Patrol and he was arrested. Other undocumented whistleblowers immediately stopped speaking out about dangers on the job for fear of suffering the same fate. Although it was clear there was gross negligence on the project, in the end, a Grand Jury decided not to indict anyone on criminal charges for the collapse citing insufficient evidence.
The tragedy is an extreme example of what can happen in an industry where non-union contractors rely on shady labor brokers and subcontractors that routinely cut corners on safety, commit fraud and misclassify workers to avoid paying taxes, insurances and other benefits. But as Erlich writes in his book “The Way We Build: Restoring Dignity to Construction Work,” the U.S. construction industry was not always been this way. In fact union workers once made up an astounding 87 percent of the construction industry in the U.S. after World War II. Private and public projects, commercial work and even much of the residential work were all union.
“You weren’t considered to be a real craftsman unless you had a union book,” Elrich, who lives in Maine part time, told Maine State Labor News. “That’s not to say that there weren’t individual small contractors on their own doing residential renovation and things like that, but having a union book wasn’t just about economics, it was a sense of identity.”
When Unions Reigned in the Construction Industry
As Erlich documents in his book, when union workers dominated the construction industry both contractors and workers benefited. He points out that the world of construction is a bit chaotic with “clashing, overlapping, competing and feuding participants, from owners and bankers, to architects, engineers, contractors and trades workers." Unions, he argues, were the “glue that held together an industry without a clearly defined management center.”
The owners hired the contractors, the contractors hired the workers and the unions supplied a well-trained, skilled workforce on an as-needed basis through hiring halls. The unions not only handled hiring and training, but also administered health and retirement benefits and formalized labor-management dispute resolutions. This allowed contractors to focus on other priorities like business development, doing estimates, project management and collecting bills, Erlich writes. This relationship, as well as the fact that smaller contractors were often led by former union members, created a more harmonious relationship between workers and management.
This predominantly white male workforce were the “labor aristocrats” of the era as some of the most well-paid blue collar workers in America. Erlich points out that inflation adjusted hourly earnings for these workers rocketed from $14.59 in 1947, to $36.09 in 1971, a nearly two and a half fold increase. They were skilled craftsmen who took immense pride in their work, prioritized safety and retired in dignity thanks to strong pensions. That changed when corporations got organized with the sole aim of driving down construction costs by undermining workers and their unions.
A Class War Against Construction Workers
By the 1960s, corporate CEOs grew alarmed as a building boom, a strike wave and a labor shortage due to the Vietnam War, led to major wages increases for workers in the construction industry. In response to rising wages, some of the top corporate CEOs in America formed the Construction Users Anti-Inflation Round Table (later renamed the Business Roundtable) in 1972 to contain construction costs by driving down workers’ wages.
Erlich quotes a 1977 construction management textbook arguing that general contractors tended to side with subcontractors against the owner because “he will work with the same subcontractors on another job and had few commitments to owner beyond contract.” The BRT’s goal was to drive a wedge between unions and the other actors by putting management in firmer control.
They did this, Elrich writes, by shifting from a traditional general contractor to a construction manager model in which managers worked for a fee, rather than a lump sum bid, and focused on soliciting clients and marketing products produced by subcontractors. In this way, he notes, the financial burden of risk — the ability to make or lose money on the basis of a fixed estimate — and the responsibility for managing crews was shifted to multiple subcontractors, creating tension between former partners. As a result, general contractors stopped directly employing as they shifted the responsibility to subcontractors.
At the same time, this “fissuring strategy” allowed general contractors to shed their obligation to provide wages, benefits and safety training to a web of subcontractors, labor brokers and other third parties. By giving priority to non-union subcontractors and cutting unions out of the equation, owners and general contractors created fierce competition among subcontractors to deliver a product at rock bottom prices.
“For instance,” explained Erlich, “when a company like DuPont wanted to build a new plant, their construction people would say ‘Our CEO is part of an organization that’s trying to drive down the influence of the building trades unions so let’s pick a non-union contractor and help them grow. That happened consistently.”
Business groups like the Chamber of Commerce and the Business Roundtable-funded Associated Builders and Contractors (ABC), corporations and non-union contractors also began an intense lobbying campaign in Washington and in state capitals to gut worker protections. They were fortunately unsuccessful at the federal level in repealing the Davis–Bacon Act, which mandates hourly wage rates (usually the union scale in a given locality) on federally financed construction projects.
But ABC and its anti-union allies were wildly successful in lobbying state governments in the 1980s and the 2010s to repeal prevailing wage laws, which dictate the minimum rates contractors must pay on state-funded public works projects. As a result, 24 states don’t have a prevailing wage standard for construction.
Federal Government Creates the Misclassification Business Model
As Erlich writes, one of the most devastating laws for construction unions was the Revenue Act of 1978, which opened the door to rampant misclassification of workers in the industry. Passed by a Democratic-led Congress and signed by Jimmy Carter, the law’s Section 530 protecting employers from getting penalized for misclassification if they had a “reasonable basis” for treating workers as non-employees, defined as a “longstanding recognized practice of a significant segment” of an industry.
The problem with this definition, writes Erlich, is that it was so broad that it constituted a “green light” to the industry to shed its legal and tax obligations to pay for unemployment, Social Security, and Medicare taxes. It created a workforce of non-union “independent contractors” doing the same work as employees, but with worse wages and no benefits. The practice also hurts all taxpayers because the misclassification model has resulted in hundreds of millions of dollars in uncollected taxes.
In addition to shouldering the burden of taxes, some of these workers had to sign a waiver stating that they would provide their own insurance for work-related injuries. Erlich writes that misclassification eliminates as much as 30 percent of labor costs, making it extremely difficult for union contractors to compete. In comparison, he noted that a typical Boston union concrete subcontractor pays 35 percent of a carpenter’s wages in taxes and insurances.
Then eight years after the creation of Section 530, President Reagan signed the 1986 Immigration Reform and Control Act, which was intended to stem the flow of migrants across the Mexican border and punish employers for hiring undocumented immigrants. However, the legal standard for proving that a company “knowingly” hiring undocumented immigrants is so high that it’s very difficult to prove.
Even stepped up enforcement, Erlich points out, seldom holds the general contractors at the top accountable for hiring these shady firms and squeeze the profits from workers. Coyotes who help desperate migrant families cross the border have expanded their businesses to become labor brokers, effectively shielding liability from the companies that hire this vulnerable and easily exploited workforce.
As Erlich writes, even the federal E-Verify program which was designed to prevent the hiring of undocumented immigrants has only led a to a boom in black market stolen, rented or fake social security cards. Even when these brokers are prosecuted, he points out that the whole management model incentivizes a competitive race to the bottom, so it's like playing "whack-a-mole" with unscrupulous subcontractors. Today undocumented immigrants make up 15 percent of the nation’s construction workforce.
The Business Roundtable strategy has been extremely successful for the very wealthy as construction union density plunged from 87 percent in 1947 to less than 11 percent in 2023. Workers wages have dropped 15 percent while fewer of them have health care and retirement benefits.
Unsurprisingly, pro-business voices from the Chamber of Commerce to TV star Mike Rowe complain that fewer and fewer young people want to work in the industry. But instead of re-examining how their deregulatory agenda has driven down wages, reduced benefits and made the profession less safe, they blame parents for wanting their kids to go to college.
As Erlich argues “Why should a young man or woman looking for a job choose to handle heavy concrete forms in 100-degree heat to build a foundation for a Texas shopping complex when safer and cleaner sales positions in one of the retail outlets inside the air-conditioned mall pay roughly the same?”
And while non-union contractors struggle to find enough workers, he notes, unions typically don’t have trouble finding new apprentices because workers know an earn-while-you learn union apprenticeship is a pathway to a great career without any debt.
“The opportunities in construction work today differ dramatically from a half century ago,” writes Erlich. “The work remains dangerous, but, despite the physical demands, construction had long served as an enticing path to the middle class for smart and ambitious young men who could not afford or chose to attend college. The decline of union density, the resulting deterioration of wage rates, and the presence of payroll fraud and the underground economy has removed that path for some trades workers.”
Unions Share Responsibility for State of the Industry
Erlich doesn’t let unions off the hook for the decline of union density in the construction sector. Too many leaders stubbornly refused to change, modernize and adapt to the times. He points to conservative building trades leaders like United Brotherhood of Carpenters and Joiners President William “Big Bill” Hutcheson and former AFL-CIO President George Meany as embodying that spirit of “business unionism” that failed to respond appropriately to well-funded attacks on the union workers.
When asked by reporter in 1972 why union membership was not growing as fast as the nation’s labor force, Meany famously replied “I don’t know. I don’t care,” adding “I used to worry about the size of the membership. But quite a few years ago I just stopped worrying about it, because to me it doesn’t make any difference.”
This attitude, Erlich notes, was very common when unions represented the vast majority of workers. Business unionism discourages rank-and-file engagement in favor of a service model where union staff refers members to work and administer training and benefits in exchange for dues. Without a rank and file organizing strategy, workers became complacent.
That’s why in the 1990s building trades unions launched the Construction Organizing Membership Education Training (COMET) to educate members about the importance of organizing new members.
A Pathway to Rebuild Union Density in Construction
But despite all the doom and gloom, “The Way We Build: Restoring Dignity to Construction Work” is not a pessimistic book and offers comprehensive recommendations for rebuilding union density in the construction industry. According to Erlich this will take a “whole tool box” of strategies, including:
- Fostering an active and engaged membership to inject energy into political and policy discussions.
- Electing presidents, governors and lawmakers who will pass measures like project labor agreements for publicly-funded projects and the Protecting the Right to Organize Act that would crack down on worker misclassification and appoint effective regulators who will enforce labor laws.
- Organizing to improve overall working conditions in the industry and partner with regulatory agencies to help exploited non-union workers recoup back wages (something some unions like Carpenters are already doing).
- Expanding market share through top-down organizing.
- Creating Community Benefit agreements and Community-Labor Alliances to help secure union jobs while adding diversity to union ranks.
- Anticipating and preparing for future technological developments like increased off-site prefabrication and modularization, green construction, and specialization can guide training programs’ curricula to maintain productivity edge.
- Pass responsible employer ordinances and laws that ban independent contractors and unscrupulous contractors.
- As clean energy projects create more construction opportunities, groups like the Climate Jobs National Resource Center and the Maine Labor Climate Council can bridge gaps between unions and environmental groups and help build broad coalitions to advance mutually beneficial projects.
Erlich mentions a number of contractors in his book who are also fed up with an unregulated industry that incentivizes misclassification, tax evasion and fraud. Since the publication of his book, other non-union contractors who want to clean up the industry have reached out to him. That’s why he believes that there is a more broadly felt sentiment to improve conditions for workers.
“There is no reason,” he concludes, “why a high-road model of building trades unionism cannot evolve from the best practices of the past — the sense of craft pride, the commitment to training and the effectiveness of sectoral multi employer bargaining — with a renewed commitment to organizing, diversity, and an activist membership.