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Banks: Union refusals to make reforms has led to the rise of merit-shop construction

The demonstrations being waged by some unions within the Building and Construction Trades Council of Greater New York (BCTC) outside of the Hudson Yards development project on Manhattan’s West Side are a sad statement on the inability of these unions to compete in today’s workplace.

Let’s put this in perspective. These building trade unions are not picketing a non-union job site. They are picketing a site that probably employs more unionized construction workers than any other private sector development in the United States. They are picketing Related, which is currently the largest employer of private-sector union construction workers in New York City.

How did the BCTC find itself in this moment where it is attacking the very entities that employ its members?

Several of BCTC’s unions have refused to abandon outdated work rules and adopt a more cost-effective and competitive wage and benefit structure. Instead, their leaders espouse progressive rhetoric, railing against income inequality and fair wages for workers – all while many of its members are making annual salaries well over $100,000. They refuse to address work rules that permit some of their members to be paid $42/hour plus overtime to deliver coffee, while running fraudulent scams on the side, charging their colleagues for food and beverages.

The refusal of such unions to make reforms and be more economically competitive has been replicated throughout the city and has led to the rise of open-shop construction. Open shop construction simply means that both union and non-union contractors are provided an opportunity to bid for work on a construction job. In the case of 55 Hudson Yards, which several BCTC unions are picketing, open shop bidding has led to 92 percent of the work going to union contractors. That is not good enough for the BCTC or its non-competitive unions though.

Instead, the BCTC wants developers, including Related, to sign Project Labor Agreements (PLA) which would require all work on a construction site use union labor purportedly in exchange for reduced costs and labor harmony. There was a period of time when many REBNY members signed PLAs. Experience showed, however, that the promise of cost savings was not realized. Furthermore, PLA sites were subject to labor strikes by construction trade unions despite explicit written guarantees that such actions would not occur. As a result, PLAs have been discredited and are being used much less frequently in the private sector.

It is becoming increasingly clear that the wasteful practices of some BCTC unions are not limited to the private sector. Taxpayers are bearing the cost of such practices as well. Media reports early this year showed that subway construction undertaken by the Metropolitan Transportation Authority (MTA) is exponentially costlier when compared to similar projects throughout the world. At the New York City Housing Authority (NYCHA), tenants experience long delays in securing much needed repairs. One common denominator in each instance is that the MTA and NYCHA are bound to use union contractors and laborers only.

One solution would be for such government agencies to employ open-shop construction moving forward. More contractors would bid for the work and it would put pressure on union contractors and laborers to become more competitive and eliminate wasteful practices. Employing open shop construction in public agencies will not win elected officials accolades or endorsements from the politically active building trade unions.

Taxpayers, however, will come out the winners knowing that their tax dollars are being put to better use.

In Other REBNY News

Residential agents, bring your clients to see the hottest apartments uptown at our sixth annual Uptown Open House Expo this Sunday, May 20th from 11:00 a.m. to 3:00 p.m. This one-day affair, co-hosted by our Upper Manhattan Committee and Experience Harlem, will feature more than 40 open houses for condos, co-ops, townhouses, and new development rental units in Harlem, Washington Heights, and Inwood. From 11:00 a.m. to 12:00 p.m., attendees may check in, enjoy light refreshments, meet participating REBNY members, and receive the Uptown Open House Expo Listings Packet and Experience Harlem Guide at one of the two following locations: Settepani at 196 Lenox Avenue in Harlem, and Garrisons at 821 West 181st Street in Washington Heights. All expo listings will be open for viewing from 12:00 to 3:00 p.m. Enter to win two tickets to Harlem EatUp! when you register to attend the expo by May 17th. Register online at:

Our Sales Agent Boot Camp on Tuesday, May 22nd from 9:30 to 11:00 a.m. will feature speaker Michael Rossi of Elegran Real Estate. Hosted by our Residential Education Committee and sponsored by Bank of America, this boot camp will unpack best practices for winning deals in a changing market. Register now.

Learn from top brokers and industry leaders at our Residential Brokerage seminar, “Road Map to Success: Identifying Your Route,” on Tuesday, May 22nd from 5:30 to 7:00 p.m. The discussion, hosted by our Residential Membership Committee and sponsored by Bank of America, will be moderated by Ken Scheff of Stribling & Associates and feature Mirza Avdovic and Kellee Buhler of Compass Real Estate, Joanna Mayfield Marks of Halstead Property, Jennifer Morcheles of REAL NY Properties, and Ilan Bracha of Keller Williams NYC. Register online.

Network with and honor outstanding leaders in the field of commercial property management at our 15th Annual Commercial Management Leadership Breakfast on Thursday, May 31st from 7:30 to 10:00 a.m. at the New York Hilton Midtown (1335 Avenue of the Americas). Register now to attend and email for sponsorship opportunities.

Save the Date! Our Finance Committee will host its 7th Annual Cocktail Party on Wednesday, June 6th from 5:30 to 8:30 p.m. at 230 Fifth Avenue, Rooftop Lounge. Tickets are $70 for members and $90 for non-members. Email for more information and sponsorship opportunities.

Stay in front of New York City’s top retail dealmakers by sponsoring our 20th Annual Retail Deal of the Year Cocktail Party to be held on Tuesday, June 12th from 5:30 to 7:30 p.m. at Club 101 (101 Park Avenue). For more information on sponsorship opportunities, email

Enjoy a summer day of golf and tennis while networking with NYC real estate professionals at our Annual Golf and Tennis Outing on Monday, July 30th at the North Shore Country Club. Take advantage of this opportunity to advertise your company, sponsor the event, and provide promotional items or raffle donations. Register online and email for sponsorship opportunities.

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