ST. PAUL — Union construction work in Minnesota pays better than the nonunion peers without inflating project costs in the $16 billion industry, according to anew study out last week.
Union contractors in Minnesota collected an average hourly pay of $33 between 2015 and 2019, according to the study, $8 more than their nonunion counterparts and only $2 less than the average Minnesota college graduate. Coupled with other findings in the study, Midwest Economic Policy Institute Policy Director Frank Manzo said Tuesday, July 6, is the takeaway "that Minnesota's union construction industry is no more costly than the nonunion alternative even though it produces higher wages."
Using U.S. Census Bureau data, researchers at the institute, the University of Illinois at Urbana-Champaign and Colorado State University-Pueblo found construction workers in Minnesota not only earned an average hourly pay 32% greater than nonunion workers, but had greater access to pension plans and relied less on government assistance as well. Less than 1% of union construction workers used the Supplemental Nutrition Assistance Program between 2010 and 2019, according to the study, compared to 13.6% of nonunion construction workers.
Higher rates of entitlement program enrollment, Midwest Economic Policy Institute spokesperson Todd Stenhouse said, "is a cost borne by taxpayers that never shows up on a project."
In a sample of 640 Twin Cities-area school construction projects carried out between 2015 and 2017, 71% of which were awarded to union contractors, researchers also found "no statistically significant cost difference between union contractors and nonunion contractors." Union-backed projects cost an average of $14.6 million, according to the study, compared to the nonunion average of $14.1 million.
According to Kevin Pranis, campaign director for LIUNA of Minnesota and North Dakota, a major construction union in the region, union contractors have better training and access to equipment that can help to keep project costs in check. In other words, a smaller team of well-trained workers can get the job done in less time.
"It’s nice to see some confirmation," Pranis said of the report, which the union was not involved with. Pranis noted there is "often there's even a bigger difference" with respect to retirement benefits, saying nonunion contractors generally have 401k plans, which employees are required to contribute to, instead of pension plans offered by unions.
The study also highlights the role of apprenticeship programs funded jointly by contractors and unions. According to Manzo, they have generally helped the unionized part of the industry to avoid labor shortages, among other things.
Pranis said such apprenticeships also have the benefit of developing and later employing local laborers. He pointed to the $3 billion flood diversion on the Fargo-Moorhead metro, for which least 15% of workers must be enrolled in registered apprenticeship programs, as an example.