Analysis of Contractor Surveys Shows Construction Workforce Shortage is Disproportionately Impacting Nonunion Firms

A review of 2018-21 Associated General Contractors of America surveys of more than 5,000 member firms nationwide reveals that nonunion construction firms are facing significantly greater workforce supply problems than their union counterparts. These problems preceded the COVID-19 pandemic.

The surveys, which include responses from 1,768 union contractors and 3,893 nonunion contractors, were analyzed by researchers from the nonpartisan Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign.

The Associated General Contractors of America represents more than 27,000 construction firms nationally. It releases its topline survey data each September and, since 2018, has released data specifically on union firms and nonunion firms.

While ILEPI and PMCR’s analysis of survey responses showed nearly identical levels of concern between union and nonunion segments on supply chain and regulatory issues, it revealed significant differences on workforce matters. Specifically, it showed nonunion firms were an average of 16% more likely to report difficulty filling open positions, 13% more likely to report losing skilled workers to other industries, 21% more likely to report project delays due to workforce supply or retention issues and 27% more likely to report their local workforce training pipeline as “poor” compared to their union signatory peers.

Through apprenticeship programs jointly administered with contractors and financed via collective bargaining agreements, construction unions train the vast majority of skilled trades workers in the United States. Their tuition-free, “earn while you learn” programs attach new workers to in-demand construction careers, and have been linked to better productivity, safety and employee retention outcomes. While the nonunion segment of the industry also offers apprenticeships, they are not nearly as robust because they rely on voluntary contributions from contractors or employer associations.

Using U.S. Census Bureau and Bureau of Labor Statistics data from the Current Population Survey, the report offers insight into why union construction jobs are performing better in the labor market environment. On average, skilled union construction workers earn 42% higher wages, are 34% more likely to have private health insurance and are 6% less likely to live in poverty or rely on Medicaid than their nonunion peers.

According to the ILEPI and PMCR analysis of AGC surveys, this competitive advantage extends to the industry’s efforts to diversify its workforce with more women, military veterans and people of color.

Read the full report at https://illinoisepi.files.wordpress.com/2022/02/ilepi-pmcr-construction-labor-shortage-agc-report-final.pdf