Editor’s Note: The following article by Peter Cockshaw, national labor analyst, provides an excellent explanation of why there is no accurate way to measure construction industry market share and why using current data resources results in flawed and inaccurate information.
Claims are constantly made about union vs. open shop market share and the relative cost differences between these two competing sectors.
Unfortunately, the claims are spread by those who are uninformed – or purposely distort data to advance their own agenda. But, when put under the microscope, these so-called "facts" cannot withstand close scrutiny. To help penetrate the fog of conflicting statements that swirl in today's construction industry, this article will attempt to separate fact from fiction.
Let's begin by focusing on statements about market share. The initial point to stress is that, contrary to many assertions, no national market study of all industry segments exists -- none. Nonetheless, a most oft-repeated open shop claim is that 80 percent of industry market share is captured by unorganized contractors. This pronouncement is based on the erroneous premise that percentages of the union vs. non-union workforce and market share are one and the same. They are not.
Regardless, some in the open shop quote Bureau of Labor Statistics' (BLS) data that show 80 percent of construction employees are non-union and extrapolate that figure into market share. But, as COCKSHAW's will illustrate, assessing market share by the labor status of industry workers is a fatally flawed method.
Secretaries and professional staff are included in BLS's statistical mix Not only is it a faulty method, it also ignores the fact that BLS statistics do not offer apples to apples comparison of union and non-union craft workers. Explains Robert Gasperow, the nationally-respected director of the Construction Labor Research Council (CLRC):
"BLS's surveys represent an objective, consistent means of measuring unionization. But they do not present a breakdown of union and non-union craft people. “That's because the Bureau's data cover all industry employees -- including professionals and clerical workers -- not just trades people.
“Professional and clerical employees are highly unlikely to be union members, even in contracting firms where all craft workers are members.
“So the only way to obtain accurate union/non-union craft comparisons is to remove managers, engineers and secretaries from the mix -- a group that accounts for over a quarter of industry employment in the BLS data."
Regardless of craft workers' labor status, the key point to stress is that union vs. non-union worker ratios still do not translate to market share percentages.
Impressive as open shop gains have been, what little reliable non-residential market data that does exist strongly indicate that claims of 80 percent open shop to 20 percent union shares do not hold water.
Residential is another matter. It has been largely unorganized for years with a different labor force, contractors and customers. Even though, as noted earlier, no national market survey of all industry segments exists, that's not to say there isn't any data available.
Union sector specialty contractors appear to hold on to some 40 percent-45 percent of non-residential
There are indications that union sector specialty contractors -- specifically electrical, mechanical and sheet metal -- command a larger share of construction than the 20 percent figure the Associated Builders and Contractors and other groups quote.
Moreover, it appears that those three specialty sectors enjoy a larger chunk of non-residential than many other organized sectors. This evidence comes from annual surveys compiled by SMACNA that estimates current market share at 44 percent.
We suspect that similar surveys of non-residential electrical and mechanical sectors would produce similar findings.
Why reliable market share statistics are a rarity in construction industry
Now that we've summarized the scant work share data available, you most likely are puzzled as to why so few statistics are compiled.
There are good reasons for the lack of data. The main reason is because obtaining figures for accurate analysis it is so time-consuming and expensive. The only credible method to assess work share comparisons is to examine the labor relations policies of each -- and every -- contractor on all projects in the area being surveyed. The enormity of such a task on a national level staggers the imagination. Even surveying a metropolitan area or several counties requires significant time and dollar expenditures.
Studies have been compiled -- albeit very few -- for some local areas. But most all rely on the prime contractor's signatory status to determine whether projects are union or open shop. But putting total project cost in either the signatory or non-signatory column -- based solely on a general contractor's labor status -- produces flawed figures.
In the case of an open shop prime, assigning the total job cost based on that employer's labor relations policy is especially faulty. This is because, unless an area is solidly open shop, a non-signatory general does not automatically let all the work non-union.
In many parts of the country like the Northeast and Midwest, open shop primes often award a sizable amount of work to union specialty contractors. That's why it is inappropriate to assign a job's entire dollar value to the open shop just because the project prime is non-union. So the next time you hear one group or another making market share claims ask to see the type of study we've just described.
Ask for a breakdown of all projects in the area surveyed along with listing of all contractors who did the work, their labor relations status and the dollar amount of all contracts they were awarded. Absent such documentation, those making such market share claims are clearly "blowing smoke!"
This analysis was reprinted by special permission of Peter A. Cockshaw, publisher of COCKSHAW’s Construction Labor News + Opinion.
For a free sample issue of COCKSHAW’s current labor advisory newsletter, contact Cockshaw Publications, P.O. Box 427, Newtown Square, PA 19073; Phone (610) 436-7553 or Fax (610) 738-7617; or e-mail to firstname.lastname@example.org.