This is a post from Jim Haughey's blog that covers the US construction industry.

Jim Haughey is the Chief Economist for Reed Construction Data and has over thirty years experience as a business economist, including twenty years monitoring the construction market. He has a Ph.D. degree in economics from the University of Michigan and has previously taught at the University of Michigan, Ohio University, Michigan State University and the University of Massachusetts.

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Construction Industry Forecasts

Notes from Jim Haughey - Jun 09, 2011

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NYC construction unions may agree to drop expensive work rules to spur more work
Jim Haughey, RCD Chief Economist

The inefficient work rules that may be dropped in New York City include a lot of scheduling and staffing changes. One of the changes under discussion in New York City would permit con tractors to schedule workers for a staggered start to the work day.  On a high rise project, lots of paid time is lost when the carpenters, plumbers, electricians and painters all show up at 7AM and wait in line for a place in one of the few elevators. The same wait is repeated twice at lunch and again at the end of the day. Generally, contractors have to endure this added cost because the current work rules would require overtime for a start after 7AM. Changes in New York City rules would spread quickly to other markets with similar expensive work rules.

 

There is a good chance that the constructions unions will accept these work rule changes. During the last few years they leaned a basic lesson in economics. People will buy more of an item whose price declines relative to substitutable items. More efficient work rules (and wage concessions) prompted more union construction work in New York City when it became relatively less expensive compared to non-union construction in the city and any construction elsewhere.  For many projects, using a non-union contractor or moving the building project outside the city are acceptable substitutes to union projects in the city.

The New York City construction unions are also aware that they no longer have the full support of Mayor Bloomberg and Governor Cuomo who are both slashing inefficient work practices by public employee unions that add to operating and especially benefit and pension costs.

 


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Read Other Recent Jim Haughey Posts

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07/18 - Congress prepares to postpone resolving the deficit crisis assuring an extended period of subpar eco
07/12 - House Transportation Committee proposes to keep federal highway funding at fuel tax receipt level
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