company for on-site work, which the union objects to. The usual objection is that the firm does not subscribe to the master labor agreement, that the firm is nonunion, or otherwise objectionable to the union.

Perhaps no single provision of the Taft-Hartley Act has contributed so heavily to the chaos and the growing problems in construction, as has this provision. Congressman Edwin Eshleman has already put this concept in the form of a proposed bill, H.R. 12634, which the AGC heartily endorses.

8. Enforcing no-strike agreements to arbitrate

AGC has also long recommended legislation to authorize Federal court injunctions against unions (to live up to their no-strike agreements to arbitrate). This would be a counterpart to the way in which the courts have been allowing injunctions against employers' breaches of such an agreement.

The problem arises from the Norris LaGuardia Act which bars Federal court injunctions (at the request of a private party) against unions in a labor dispute. This was decided by the Supreme Court, although AGC continues to doubt the tenability of that ruling, especially after the composition of the Court has been changed. But there would not appear to be any anti-labor aspects to this case since it appears no more than fair for unions which voluntarily make labor agreements, to submit to Court processes requiring them to live up to what they agreed to. Certainly, this situation is different from the case in which the injunction against the union is directed against other types of misconduct outside the realm of voluntary agreements.

AGC finds that Senator Fannin's bill on this subject, S. 1482, is an excellent draft of the above legislative idea.

Repeal Davis-Bacon Act

AGC urges Congress and the administration to repeal the Davis-Bacon Act and related laws since these laws were enacted at a time of less than full employment and were designed to solve some of the problems of that day. The operations of these statutes in a full employment economy restricts training opportunities, prevents the economical use of labor and contributes to wage inflation. Conclusion

The AGC recommends the above-noted labor law reforms as a "must" if the construction needs of the 70's are to be met.

47-076 O 70-27

Published by the Associated General Contractors of America, June 1970.

In the Spring of 1969 the construction industry was confronted with wage demands and costly fringe benefits which exceeded the previous excesses of the powerful three-million man building construction trades unions. An alarm was sounded by then AGC president, Carl M. Halvorson, who expressed the concern of the industry and made a number of positive recommendations to the Administration.

Government officials and advisers to the President have given this problem their attention and a Construction Industry Collective Bargaining Commission representing management, labor and the public was established by the President. In addition, a special Cabinet Committee on Construction was formed. İndividuals and groups in all sectors of the economy joined in efforts to investigate the effects of nflationary union settlements.

Notwithstanding all these efforts, the tide of inflation continues to mount with no apparent relief in ight. In fact, wage demands in the Spring of 1970 have been running well ahead of 1969. This continued nflation is occurring because the root causes of the problem - excessive union power have not been ttacked. The Administration has made no substantive effort to check the power of the building trades nions.

-

AGC engaged the firm of Townsend-Greenspan & Co., Inc. to make an economic study of labor costs 1 the construction industry and analyze the effects of government policies and labor legislation on the ollective bargaining processes in this industry.

The following is a report prepared by Alan Greenspan for the 51st Annual Convention of the ssociated General Contractors of America, held in New Orleans, Louisiana, March 6-12, 1970. His nalysis, data and recommendations deserve the attention of all policymakers in the government; of embers of Congress; of users of construction; of the construction industry; and of the building trades nions themselves.

troduction

The building trades unions are exercising a significant, and increasing, degree of monopolistic control er major segments of the construction labor market. They are able to command hourly rates 50% above eir counterparts in open shop construction and substantial premiums over rates paid to union aintenance craftsmen doing comparable work in other industries. Moreover, the wage gap between union ales in the building trades and those of other industrial and maintenance workers has widened appreciably ring the past decade indicating an intensification of union control over the supply of workers onto nstruction sites.

Their extraordinarily rapid wage gains have already imposed a serious threat to the integrity of the nstruction industry. If our construction industry is to remain viable and be able to meet the vast quirements for residential and nonresidential construction over the next decade, it will be necessary to en up the forces of competition in the construction labor market.

Specifically, the use of hiring halls to control the flow of skilled labor onto construction sites requires se examination and perhaps legislation. A thorough review of training programs and the criteria for rneyman status is long overdue. The Davis-Bacon Act should be repealed. The wage standards on federal jects set under this act have reinforced the upward spiral of construction wages.

The Escalation of Wages in Construction

Mingled surprise and disbelief has greeted a number of the recent extraordinarily large wage settlements in the construction trades. An agreement in Buffalo will boost wages $3.35 an hour over the next two years; another in Kansas City will add a whopping $5.30 over a two-year period. While these are clearly the extremes, they are symptomatic of a very broad and pervasive trend in construction wages that raises serious doubts about the balance of collective bargaining power within the contract construction industry.

There is great concern lest the construction industry agreements pull up the whole wage structure frustrating attempts to bring the current economy-wide inflation under control. While industrial unions have gained generous contracts in recent years, they have not been able to match the building trades. On the contrary, the gap between them has increased during the past decade and will almost certainly continue to do so at least through 1971. Hourly wages in construction have always been higher than manufacturing. But starting in 1960, the percentage spread began to widen 1 until it is now far greater than at any time since the 1930's and probably since the turn of this century. This suggests that some of the factors governing labor negotiations in the construction industry are basically different from those which prevail elsewhere.

The Labor Market Tightens

An examination of the internal structure of the construction employment picture makes it clear wh this is happening.

Table 1 exhibits the relationship between people and jobs for the three major construction oriente occupations. It shows, for example, that the number of jobs filled, by full-time year-round carpenters ros from 403,000 in 1959 to 490,000 in 1967, while the number of job slots filled by part-time workers fe dramatically. As a result, far fewer carpenters were looking for work, on the average, in 1967 than i 1959. The trend is even more pronounced among other construction craftsmen and laborers.

2

For all wage and salary workers whose primary job was in construction, 55.6% worked full-tim year-round in 1967, compared with only 43.6% in 1959. Work experience data are not yet available for th most recent years. However, judging from continued decreases in unemployment, the construction labo market has tightened still further.3

This flexibility and mobility of the workforce has clearly been impaired as the pool of part-year an part-time workers has been absorbed. The contraction in this pool has confronted construction contracto with an extraordinarily inelastic labor supply schedule. Slight increases in the need for manpower ha sharply escalated its price.

1 If fringes are included, the increase in the percentage spread is only slightly less pronounced. (See Append Table A-19)

2 Includes workers in both construction and nonconstruction employment. Approximately three-fourths carpenters are employed in the construction industry.

3 There is also some evidence to suggest that fewer workers primarily associated with manufacturing and oth

industries are devoting time to construction work.

1

Persons 14 years of age and over in 1959; 16 years of age and over in 1967.

Durce: Work experience and total employment data from BLS. Remainder are estimated.

But why hasn't the normal pool of construction workers enlarged with an increasing wage spread? It ight be argued that the "pool" is at least marginally a depository for the unemployed or underemployed om other industries who seek construction work only as a last alternative with wages being secondary. If ue, this would make the supply of construction workers inelastic and generally unresponsive to higher ages. In periods of industrial boom and overall labor shortages, construction, receiving the "residual" upply of manpower, would be confronted with far faster wage gains than other industries. The obverse at construction wages would rise more slowly in periods of industrial recession - would then also have to e true. The data, however, do not support this hypothesis. In 1955 and 1956, when unemployment was nerally low, wage gains in construction were no better than in manufacturing. In 1958 and again in 1961, oth periods of recession and relatively high unemployment, construction wages moved up faster than ages elsewhere.