Non-union construction: Years of gains threatened in NYC by Republican Trump and Democratic Cuomo

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Crain’s New York Business has published an article explaining the rise of non-union contractors within New York City’s construction industry and what describes as “unprecedented hurdles” from “an alliance between Gov. Andrew Cuomo and unions, from new information on the low wages of nonunion workers and especially from the anti-immigration policies of President Donald Trump.”

The story describes how developers had found non-union labor cost savings irresistible and these contractors have developed the expertise to take on ever-bigger projects.

economic policy institute wage gap
The Economic Policy Institute’s study shows the extent of the wage gap between union and non-union contractors (Crain’s New York Business)

However, in the past two years, Gov. Cuomo has “backed the trades on requiring something close to union wages on residential projects receiving the controversial 421-a tax break, an issue that remains unresolved. It’s never good when a powerful governor like Cuomo sides with your opponents,” writes Greg David.

New information on nonunion wages will also put the sector on the defensive. Previously, no one had produced reliable data on what nonunion workers were paid. Earlier this month the Economic Policy Institute released a comprehensive study that showed nonunion construction workers make as little as $17 an hour on average, or less than $35,000 a year.

Politically, the findings are bad news for the nonunion firms’ alliance with the de Blasio administration, which has said that their lower costs are crucial for the mayor’s affordable housing plan. With de Blasio committed to producing jobs paying $50,000 or more, he may be forced to intervene to raise nonunion construction wages.

The story also reports that there could be problems with labour supply resulting from president Donald Trump’s plans to deport undocumented immigrants.

The story says “no one knows how many undocumented immigrants will be deported under Trump’s new policies.”

But nonunion contractors are clearly at risk. The best estimates from the Pew Research Center suggest that at least 15 percent and possibly as many as 33 percent of construction workers in New York are undocumented. The vast majority are employed by nonunion firms, half of whose employees are Hispanic. The loss of a significant number of workers at a time of booming construction work could hamstring their operations.