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I have worked construction in San Francisco, and a former General Contractor. There is a cost difference between all union projects, and non-union projects. T

I have worked construction in San Francisco, and a former General Contractor. There is a cost difference between all union projects, and non-union projects. The costs seem outrageous at first. If I wanted to hire a union local 6 Electican a few years ago the union would charge me $101/hr. for a skilled worker to show up. Yes--it sounds nutty? The answer is bypass the union, and go non-union? When all us said and done, and the project is completed, and the developer gets the bill; the few projects I worked on, the total cost of building was roughly the same? That doesn't take into account what non-union shops cost society either. Very few non-union shops provide health care. If they do, it's usually a lousy plan. Workers get sick, or hurt, and worker's compensation runs out; you have workers looking for government medical care. My point is I'm pretty sure the mob is not affiliated with unions in San Francisco. (I know that was not your point) My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same. Non-union workers make developers more money. The buyer will not see those savings. You the buyer will not receive a better deal ever. The market determines the price. Now--if you are the developer, it's a no brainer--kind of--you want the building built as cheaply as possible. You hire non-union, provide lousy training, but live in a grand mansion. You spit out a few spoiled kids, and they run the money machine. (Big Bill of Bradley electric was apprentice for 5 years. Learned the trade. Turned around and opened a non-union shop. Made millions. Made so much money he could shoot his son in-law, and somehow get out if a long jail sentence. Making a lot of money is nice?) Many unions now have a no compete clause in their agreement. Unions don't want to pay for your schooling, and have their guys opening up non-union shops. I am pretty sure it's never enforced, or even legal? Wow--I'm just writing too much today. Don't feel that great? I'm finding this opening depressing in a weird way. Sorry about bothering anyone with my issues. I sometimes have no one to talk to.) O.k, I say "kind of" because with a union run job, it's usually done on time, and done well. This crazy rant is basically developers are usually the only one's saving money with non-union help.

stale2002 5y ago
> My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same. It is more complicated than that. The way that supply and demand works, is that if costs go up, then there is less reason to create new supply. And a lower supply of an item, means that prices, for the overall market, will go up. That is how supply and demand works, and housing is no different. > You the buyer will not receive a better deal ever. The market determines the price. The market is determined by supply and demand. This is standard, 101 economic theory. If costs go up, supply go down (or supply increases a smaller amount), and price goes up.
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quickthrowman 5y ago
> O.k, I say "kind of" because with a union run job, it's usually done on time, and done well. This is why owners of Class A real estate usually mandate union labor, at least for MEP trades. I bid and run work at a union shop, it’s sometimes difficult to compete on prevailing wage/public jobs here since only the cash wage portion is counted and not the benefits portion. So, a non-union shop can pay the $45/hr prevailing wage and cheap out on fringe benefits, maybe an additional 12-15/hr, where the union labor gets the prevailing wage and negotiated fringe benefits package that is roughly 2x the base wage (total comp). Right now we pay union journeyman electricians $87/hr in IBEW 292, which will go to $90/hr next Monday. The good thing is, there’s plenty of work for union shops since as I mentioned, lots of Class A real estate and giant companies stick to union labor for construction, as the quality or perceived quality is higher (in general). You’re also correct about the extra savings going to the developer, if you hire non-union labor and are bidding against a union shop and it’s a lump sum bid, you only need to beat the union guy by 1-2%, the rest is profit to keep. It’s refreshing to see someone with actual experience commenting about construction on HN, nice post!

stale2002 5y ago

> My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same. It is more complicated than that. The way that supply and demand works, is that if costs go up, then there is less reason to create new supply. And a lower supply of an item, means that prices, for the overall market, will go up. That is how supply and demand works, and housing is no different. > You the buyer will not receive a better deal ever. The market determines the price. The market is determined by supply and demand. This is standard, 101 economic theory. If costs go up, supply go down (or supply increases a smaller amount), and price goes up.

deleted 5y ago
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quickthrowman 5y ago

> O.k, I say "kind of" because with a union run job, it's usually done on time, and done well. This is why owners of Class A real estate usually mandate union labor, at least for MEP trades. I bid and run work at a union shop, it’s sometimes difficult to compete on prevailing wage/public jobs here since only the cash wage portion is counted and not the benefits portion. So, a non-union shop can pay the $45/hr prevailing wage and cheap out on fringe benefits, maybe an additional 12-15/hr, where the union labor gets the prevailing wage and negotiated fringe benefits package that is roughly 2x the base wage (total comp). Right now we pay union journeyman electricians $87/hr in IBEW 292, which will go to $90/hr next Monday. The good thing is, there’s plenty of work for union shops since as I mentioned, lots of Class A real estate and giant companies stick to union labor for construction, as the quality or perceived quality is higher (in general). You’re also correct about the extra savings going to the developer, if you hire non-union labor and are bidding against a union shop and it’s a lump sum bid, you only need to beat the union guy by 1-2%, the rest is profit to keep. It’s refreshing to see someone with actual experience commenting about construction on HN, nice post!