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Construction Unions Enhance Racial Equity

An economist reveals that unions have helped minority workers get into the construction industry

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by Guest Post on
Sep 27, 2018

Richard Berman’s recent claim that construction unions have hurt the black community ("#CountMeOut: Construction unions leave minority workers behind," op-ed) is false and easily refutable with data provided in my study of New York City construction employment published in 2015 (disclosure: my study was commissioned by the Building & Construction Trades Council of Greater New York). If black workers in the union construction sector were subject to the employment and wage patterns of the nonunion sector, their earnings would be 45% less. This results from the fact that black workers are more likely to find employment in the union than the nonunion sector and earn far higher wages in the union sector, even more than white construction workers earn in nonunion construction.

My study was based on a sample of construction industry workers over the years from 2006 to 2015, those who live in New York City and were ages 18 to 64. Berman presented some wage data for union workers in construction but curiously omitted any reference to the wages and employment in the nonunion construction sector which provide the critical benchmark for comparison because they represent how wages and employment would fare, at best, in the absence of collective bargaining. The basic facts refute his contention that the absence of unions and collective bargaining would help black workers. Here they are (all wage data are in 2018 dollars):

  • Black workers in union construction earn $22.58 per hour, 36.1% more than the $16.60 earned by black workers in nonunion construction. In fact, unionized black workers in New York City construction earn $1.63 per hour (7.2%) more than white workers in the nonunion construction sector;
  • Black workers are far more represented in the union construction workforce (where they account for 21.2% of employment) than in the nonunion construction workforce (where they account for 15.8%). Among workers under age 40, the disparity is greater, with blacks comprising 21% of the union jobs but just 14.8% of the nonunion jobs.
  • Black workers in the union construction sector earn $354 million each year. If these workers had the lower earnings of the nonunion sector and the lesser ability in that sector to gain employment, total earnings would have been only $194 million.

There is a long history of racial discrimination in the New York union construction sector, amply documented in my study. But that does not reflect the current circumstances. This can most readily be seen in the racial composition of the apprenticeships, the entry point for obtaining a union construction job. Minorities accounted for 61.8% of all New York City residents’ union apprenticeships in 2014, far higher than the 36.3% share in 1994. Black apprentice participation roughly doubled, rising from 18.3% to 35.1% over those same 20 years.

Black workers do earn less than whites in union construction, as they do in every occupation or sector one can examine. Berman neglected to mention that the gap between black and white wages in nonunion construction is even larger, a 21% difference. There is a 28% racial wage gap in nonunion blue-collar occupations outside of construction.

Berman offered no guidance for how he would eliminate racial wage disparities because he is really only interested in bashing unions and we have already seen that this would only lower the wages earned by black union construction workers. What we do know about the union sector is that the racial differences in wages are not because there are differences in what is paid for doing the same job: It is a hallmark of union contracts to insist on equal pay in the same occupation. Wage difference may reflect the occupational mix of black and white workers, with blacks more heavily represented in lower-paid occupations.

There is a way to go to achieve racial equity. Building a stronger union presence, however, helps build racial equity and definitely does not hurt black workers.

Lawrence Mishel Washington, D.C. The writer holds a PhD in economics, is a distinguished fellow at the Economic Policy Institute and has worked as a labor market economist since 1987.

This letter was submitted to Crain's New York.

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