Based in LaGrange, Ill., the Midwest Economic Policy Institute is a think tank that supports generally pro-union positions and says in its mission statement that it “promotes thoughtful economic growth for businesses and working families.”

The report, “Building a Strong Minnesota: An Analysis of Minnesota’s Union Construction Industry,” was released July 12. The other co-participants are the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign and Colorado State University-Pueblo.

The study compared union and non-union work in the state’s construction industry, which has grown by 69% since 2000, and employs 130,000 workers, 41% of whom are union construction workers.

Manzo said one reason Minnesota was selected for the study is because its current workforce unionization rate is more than double the national average of 18% and is higher than every other Upper Midwest or Great Plains state other than Illinois, which has a 45.7% unionization rate.

The study looked at data from the U.S. Census Bureau and said, based on its data, Minnesota construction workers earned 32% greater average hourly pay than their non-union counterparts.

The average hourly rate for a union worker was $33.36 compared to $25.35 for a non-union worker for the projects studied.

Researchers analyzed a sample of 640 Minneapolis-St. Paul area school projects done between 2015 and 2017. In total, 71% of the projects were awarded to union contractors and 29% were awarded to open shop contractors.

Manzo said school projects were studied because “they are much more similar to one another than any other type of construction you might look at. It’s an apples to apples comparison.”

He said the study also took into account project complexity including what types of trades were involved, whether the project was new construction versus an addition or renovation, and the overall size of the project.

Researchers found there was no statistically significant cost difference in projects between union contractors and non-union contractors.

However, Adam Hanson, chapter president of Associated Builders and Contractors of Minnesota and North Dakota, part of ABC’s national association that represents nearly 22,000 merit/open shop construction and construction-related firms in 70 chapters across the U.S., disagreed with the study and said the comparison was not apples to apples because of prevailing wage laws. The study said prevailing wage laws were not responsible for the pay disparity observed.

“Unfortunately, most of these (school) districts have one size fits all prevailing wage requirements,” he said. “A more in-depth study would have looked at how union labor costs and prevailing wage mandates affect greater Minnesota school districts and taxpayers. We have often seen prevailing wage rates in these areas imported from metro counties, which are not reflective of local area wage rates.”

Manzo said the study proves that union construction projects are similar in cost to non-union projects because higher union labor costs are offset by savings in other project components such as materials and safety.

He also said the study shows that union apprenticeship programs provide better training, which contributes to costs savings. 

“The implication is that if union workers are better trained or are more efficient, they don’t have to spend money on redoing something or add extra materials that are unnecessary to the project,” he said.

Manzo said the study also disproves the view that labor costs are the greatest driver of project costs. He noted that, on average, across the country, labor is about 20 to 25% of the total cost of construction.

“There is a misconception that unionized construction is more expensive simply because the workers are paid more,” he said. “But that doesn’t take into account the skill levels of the workers, in particular (those developed) through union apprenticeship training programs, the corresponding (increased) productivity levels and (better) safety outcomes that are associated with union construction.”

Responding to the claim that union workers are more efficient than non-union workers, Hanson touted the productivity of open shop construction workers who can handle a variety of tasks on a job site.

“Merit shop contractors and their employees are often multi-skilled craft professionals, meaning they can perform multiple skills and not pigeonhole themselves to one particular craft,” he said. “For example, an electrician can also do laborers’ work or a carpenter can assist a steelworker if necessary. This increases productivity and cost efficiency.”

According to the study, each worker in Minnesota’s construction industry contributes on average $120,000 annually to the state’s economy.

“This is higher than the national average of about $116,700 per construction industry worker and higher than every neighboring state, except Illinois and Michigan,” the study states.

The Illinois’ worker contribution is $130,085 and Michigan’s is $127,189.

The only state with a lower job site fatality rate than Minnesota, which had 1.2 fatalities per 10,000 construction workers between 2015 and 2019, is Wisconsin, which had an 0.86 fatality rate and a 27.8% unionization rate, according to the census bureau data cited.

Hanson said the study’s claims that unions correlate to safety are misleading and cited other census statistics from nearby states.

"Illinois has a higher unionization rate than Minnesota, yet has a higher fatality rate,” Hansen said. “Nebraska’s fatality rate was almost identical to Illinois,’ yet it had one-third the unionization rate."

Hanson also noted that the study did not distinguish who is more likely to be the subject of the fatality statistic, whether union or non-union, just that there is some link between the fatality rate and a state’s unionization rate.

The study also looked at the broader societal and economic factors that differentiate union and non-union labor. It found that 91.3% of union workers were covered by private insurance compared to 48.7% of non-union workers, 60.2% of union workers had a private pension plan through their work compared to 36.1% of non-union workers, and state/federal income tax contributions for 2015-2019 were $11,824 for union workers and $7,026 for non-union workers.

In addition, it found that union construction workers are less likely to rely on both Supplemental Nutrition Assistance Program (SNAP) food stamps and the Earned Income Tax Credit (EITC) government assistance than their open shop counterparts.

“They are 13% less likely to rely on those programs, but they contribute in Minnesota, on average, 48% more in state income taxes than non-union construction workers,” Manzo said.  

He said those differences are important "because while they are not captured in the bids, they do have an impact on social costs or taxpayer costs."

The study found that there were 10,219 active apprentices through union programs between 2015 and 2017 compared to 816 non-union apprentices.

Hanson took issue with the study’s assertion that union apprenticeship programs educate 93% of all apprentices in the state. He said the number only includes registered apprentices. He also disputed the study’s assertion that union apprenticeship programs are privately funded.

“The claim that union apprenticeship programs are privately funded is appalling,” he said. “When discussions of prevailing wage reforms take place at the legislature, union lobbyists will regularly say that prevailing wage laws (on publicly funded construction) protect their apprenticeship programs. So much for privately funded.”

The study also used economic modeling to estimate that the state’s construction workers covered by collective bargaining agreements support more than 15,000 additional jobs across all economic sectors and boost the state’s GDP by nearly $2.7 billion per year.

According to Hanson, Minnesota building trades unions have increased their push in recent years to recruit open shop contractors and their employees to join their unions, but he says the non-union option needs to remain.

“When municipalities entertain or adopt restrictive contracting mandates that require union labor, they are essentially telling these Minnesotans — including those who live and pay taxes in their communities — that they are not welcome to work there,” he said. “All Minnesotans, regardless of labor affiliation, should be able to fairly compete to win work on taxpayer-funded construction.”

The study reported that an area where unions have not yet gained a foothold in Minnesota is in the clean energy industry. The study found that workers earn 22% more in fossil fuel power generation in Minnesota than those in the wind and solar power sectors.