Hot Markets and Labor Shortages Give Unions Strong Negotiating Hand
The strength of overall construction activity and a shortage of skilled labor is playing in the favor of many unions when they step up to the bargaining table these days. Some unions are recording record increases in wage and fringe packages as they nail down agreements.
The impact became clear last year when wages and fringes jumped significantly. According to the Construction Labor Research Council, Washington, D.C., 2006 labor agreements tallied average increases of 4.5% for the first year, up from 3.9% in 2005. That is the highest percentage increase since 1989. Contracts covering 5,000 workers or more had the biggest increases, averaging 5.2%. The increases came at a time when construction employment grew to a record 7.5 million persons in 2006, says Robert M. Gasperow, CLRC executive director. Despite a softening of the residential market, non-residential work remains high and construction unemployment should remain low, he says.