# UNION VS NONUNION Advice Needed



## GC37 (Apr 29, 2016)

I'm going to preface this by saying that construction in San Francisco is almost as expensive as New York now. It seems like labor costs in other areas of the country aren't even close. 

Costs:
Union Wages+ Benefits Area 1: http://local22.org/2016_wage.jpg
+taxes & Insurance etc. of about twenty per hour

I am working in San Francisco as a small residential union construction company. 

Even though the market is very hot in the residential market, I am seeing my business slip away. Most of the projects I estimate are awarded to nonunion construction companies. 

Unless I am mistaken, I think union wages/benefits will increase $15 or so in the next 3 years. 

Real estate is projected to take a big dip sometime in the next 2 years. I can't imagine what it will be like trying to sell work in a slow market with the most expensive labor I have ever had. That being said, my carpenters are excellent and I am friends with them all. I have never had a customer dissatisfied with the quality of my crew's work. I just don't think I have a sustainable and competitive business model..at least for residential. 

What do you think?


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## Irishslave (Jun 20, 2010)

GC37 said:


> I'm going to preface this by saying that construction in San Francisco is almost as expensive as New York now. It seems like labor costs in other areas of the country aren't even close.
> 
> Costs:
> Union Wages+ Benefits Area 1: http://local22.org/2016_wage.jpg
> ...


It already flipped here years ago. The union will fight you on small commercial stuff throw up pickets etc...but they long ago gave up single family residential. Then everybody left the unions. Fast forward to the new millennium boom..they recruited any warm bodies they could find. Journeyman Carpenters who couldn't read plans....It's a joke here anymore


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## griz (Nov 26, 2009)

*non union......*


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## Agility (Nov 29, 2013)

GC37 said:


> Even though the market is very hot in the residential market, I am seeing my business slip away. Most of the projects I estimate are awarded to nonunion construction companies... I can't imagine what it will be like trying to sell work in a slow market with the most expensive labor I have ever had... I just don't think I have a sustainable and competitive business model..at least for residential.
> 
> 
> 
> What do you think?


 
I think you answered it: go non-union. Are you worried about finding quality non-union workers or about offending your current union guys who have become friends?

Or you could go commercial..


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## Windycity (Oct 3, 2015)

There is no question being non union will make you more competitive and easier to compete in bidding residential jobs......

If you are currently union and want to go non union get ready to bankrupt your business, sell your assets and start a whole new business preferably in someones else name...ie spouse?. its the easiest way out otherwise there is probably something in your agreement with them where they can legally come after you.. it happened to us when we dropped out.


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## MSLiechty (Sep 13, 2010)

Our fully burdened union wage costs us almost $71/hr. But we could not so the type of work unless we are union. 80% is all high rise work 

ML


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## MSLiechty (Sep 13, 2010)

Windycity said:


> There is no question being non union will make you more competitive and easier to compete in bidding residential jobs......
> 
> If you are currently union and want to go non union get ready to bankrupt your business, sell your assets and start a whole new business preferably in someones else name...ie spouse?. its the easiest way out otherwise there is probably something in your agreement with them where they can legally come after you.. it happened to us when we dropped out.



Yep they will go after you and they have the funds to out last if you try going non- union. We tried this this once in 95' and by the letter we were going non Union and they told us you are right but we will litigate you into BK. We are still Union today


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## bwiab (Mar 17, 2006)

Had no idea union residential contractors existed...

don't know why anyone would go union... ever. Hard enough to comply with gobmint.. osha, etc. Market will dictate rates fairly effectively. Biggest thing I never understood or liked was tenure based pay.


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## CarpenterSFO (Dec 12, 2012)

bwiab said:


> Had no idea union residential contractors existed...
> 
> don't know why anyone would go union... ever. Hard enough to comply with gobmint.. osha, etc. Market will dictate rates fairly effectively. Biggest thing I never understood or liked was tenure based pay.


In San Francisco, if you're doing a $10MM remodel, a union contractor is a reasonable idea. Smaller jobs, not so much.


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## Irishslave (Jun 20, 2010)

It's why government work is so expensive. Gov contracts mandate prevailing wage. Guess you know who determines prevailing wage. 

Unions feed inflation 

Unions bankrupt companies 

Unions bankrupt governments


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## Windycity (Oct 3, 2015)

Irishslave said:


> It's why government work is so expensive. Gov contracts mandate prevailing wage. Guess you know who determines prevailing wage.
> 
> Unions feed inflation
> 
> ...


There are plenty of of companies that have a high unionization that are successful long term profitable companies. I also know alot of companies that are non union that have filed for bankruptcy protection and liquidated. Poor management, bad business decisions, and an outdated business plan has alot more to do with companies being unsuccessful than collective bargaining.

Inflation is going to happen regardless of unionization and employee pay. As a matter fact inflation happens all over the world 

And I agree with prevailing wage laws because By taking wages out of the equation, prevailing wages organize competition around quality, productivity, and efficiency without touching off a "race to the bottom" as contractors underbid one another by lowering the rate of pay earned by their workers. The goal is that, with everyone playing on a level field, contractors seek to maximize their workers' output and their own ability to manage work better than their competition. In practice, a construction project will have most of the same workers on the job whether it is a "prevailing wage" job or not. The employees will be paid at a higher wage scale if the project has been deemed "prevailing wage" either by law or choice. A construction project requires the same amount of materials provided the quality of the work is the same. Therefore the true variables are how cheap can you pay your employees and how efficient do you run your jobs. So the contractor can come in significantly cheaper if he finds a bunch of guys to work for next to minimum wage ....Or as alot of people i hear say "hire a bunch of Mexicans, they work for cheap" and you can make more money. (Not trying of offend anyone, just what i see alot)


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## RH*carpentry (Jul 29, 2016)

Windy City

Maximizing a worker's output is the same as saying less pay for the same output. If one painter paints 100 square feet for $15.00 and another paints 150 square feet for $15.00 then the rates are different.


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## Irishslave (Jun 20, 2010)

Windycity said:


> There are plenty of of companies that have a high unionization that are successful long term profitable companies. I also know alot of companies that are non union that have filed for bankruptcy protection and liquidated. Poor management, bad business decisions, and an outdated business plan has alot more to do with companies being unsuccessful than collective bargaining.
> 
> Inflation is going to happen regardless of unionization and employee pay. As a matter fact inflation happens all over the world
> 
> And I agree with prevailing wage laws because By taking wages out of the equation, prevailing wages organize competition around quality, productivity, and efficiency without touching off a "race to the bottom" as contractors underbid one another by lowering the rate of pay earned by their workers. The goal is that, with everyone playing on a level field, contractors seek to maximize their workers' output and their own ability to manage work better than their competition. In practice, a construction project will have most of the same workers on the job whether it is a "prevailing wage" job or not. The employees will be paid at a higher wage scale if the project has been deemed "prevailing wage" either by law or choice. A construction project requires the same amount of materials provided the quality of the work is the same. Therefore the true variables are how cheap can you pay your employees and how efficient do you run your jobs. So the contractor can come in significantly cheaper if he finds a bunch of guys to work for next to minimum wage ....Or as alot of people i hear say "hire a bunch of Mexicans, they work for cheap" and you can make more money. (Not trying of offend anyone, just what i see alot)


Let me guess...you're union? 

Once upon a time it was supportable, with globalization it has become an anachronism. In the days gone by everyone knew if it weren't for the unions we'd all be workin for nothing. With globalization eventually you'll be working for nothing again...Sorry it's just the way it works....it's part politics, part math 

One need only look at the pension plans to see the demise. the numbers aren't working anymore. The big unions UAW, Teamsters, proves it. Moreover the unions do feed inflation because the cost of everything is based on what union workers make and not everyone gets paid $50 @ hr to shove bolts through a hole all day long....it's just that simple. 

Government employee unions are really the worst. Talk about phuckin goldbrickers. When i went to school the teachers all drove beaters and wore the same 3 outfits all year...they did the job because they were dedicated...not for the money and bennies. Today the whole educational atmosphere is different. Club Med for the teachers and administrators and medicated daycare for the kids 

Unions are the sacred cow of Democrats and a model of social declivity. it never used to be that way but it is now


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## Calidecks (Nov 19, 2011)

RH*carpentry said:


> Windy City
> 
> Maximizing a worker's output is the same as saying less pay for the same output. If one painter paints 100 square feet for $15.00 and another paints 150 square feet for $15.00 then the rates are different.


But if one painter paints 150 s.f. In one hour for 15 bucks and the other paints 100 s.f. In one hour for 15 bucks the rate is the same, the output is different.


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## Metro M & L (Jun 3, 2009)

Pretty sure the non union painter in this example is the one who gets 150 feet done.


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## CarpenterSFO (Dec 12, 2012)

I'm not a union man myself, and I've seen some of the undesirable parts of that world, but I can also say that I have good friends in the union world, doing fine work - some of it that I don't think could be done outside of the union world - and taking good care of their families. I don't buy the black and white, good and evil, narrative.


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## hdavis (Feb 14, 2012)

CarpenterSFO said:


> I'm not a union man myself, and I've seen some of the undesirable parts of that world, but I can also say that I have good friends in the union world, doing fine work - some of it that I don't think could be done outside of the union world - and taking good care of their families. I don't buy the black and white, good and evil, narrative.


Agreed, but if you had to go one way or the other with no other information, I could probably guess which way....

In a lot of cases, flexibility is worth something, others cases, it may not be worth much.


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## hdavis (Feb 14, 2012)

FWIW, in a different industry and for a large manufacturing company, the loaded labor cost difference between non-union and union was ~25%. That includes any loss of efficiency going union.

There's a basic breakdown of what goes into making something (doesn't include all the indirect costs) - materials, machines, men, methods. environment. High labor cost makes more costly efficiency improving equipment justifiable.


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## Calidecks (Nov 19, 2011)

I think most guys will go to whatever will keep them busy. Around here union jobs are far and in between. I'd rather have the job for 25 an hour that kept me busy year after year, every year, than a job for 35 that kept me busy in 3 month spurts. Union jobs around here are cut throat. When I was in the union there were lots of politics envolved. Guys would back stab, talk ****. I was in with the big bosses so my political position was good. :laughing:


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## hdavis (Feb 14, 2012)

A lot of union guys around here work in what ever state they can get a job. Being able to sleep at home and drive to work in the morning has some attraction.


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