Scott Van Voorhis’ opinion piece [“The Union Challenge,” March 2] on the future of Boston construction is wrought with false assumptions and developed with minimal industry insight. His suggestion that the future of Boston development is perilously close to collapse due to a single major development project in Quincy hitting financing obstacles has no basis in reality.
Van Voorhis claims the $1.6 billion Quincy Center revamp is “threatened by a major escalation in construction costs … combined with a sudden shortage of union hard hats,” which is “driving the cost escalation that is threatening to derail this landmark project.” According to his unnamed “Boston construction consultant,” union labor is increasing the bottom line by 7 to 9 percent, unmotivated and less experienced union workers are forcing a 12 percent efficiency hit and developers are coping with rising costs by “pushing prices to the limit.” All three of these arguments defy reality, according to an independent, non-biased study funded by union and non-union owners alike.
As to his assessment of the causes of Quincy’s troubles, Van Voorhis has knowledgeable dissenters. Successful Boston-area real estate developer Peter Palandjian pointed out, “A budget creeping up by 30 percent in three years is a function of poor budgeting by the developer and the fact that the original budget was formulated on schematic drawings (or ‘cartoons,’ as we say in the industry), not on completed drawings that can actually be bid out for pricing.” Quincy Mayor Tom Koch also questioned the master developer’s competency when he publicly stated, “The challenge has always been with Street-Works, whether they could come up with the capital, and by not meeting this benchmark it’s obvious they are having some trouble getting capital.”
Van Voorhis’ opinions simply are not factually borne out. Independent Project Analysis Inc.’s Labor Productivity Study examined no less than 700 union and non-union construction projects from coast to coast to see which workforce generated more output. Unionized labor was found to be 17 percent more productive and skillful because of intensive training that is not found in the open shop sector.
An anonymous “consultant,” who points to a 7 to 9 percent increased cost to use union labor, completely ignores the 17 percent efficiency uptick organized labor brings.
A developer would have to keep a non-union, less prolific crew on the clock 82 extra minutes PER DAY to overcome the productivity gap. Despite Van Voorhis’ unsubstantiated claim that available union workers are not the “recession-hardened workers of a few years ago,” best-in-class training found at union educational centers – often financed in lieu of wage increases – ensures substantial cost savings over non-union crews. Union hiring halls also guarantee contractors an uninterrupted supply of qualified labor when and for however long they need it.
Finally, Van Voorhis suggests rising construction costs are the sole determinant in escalating real estate prices. Surely he understands construction expenses are just one of many factors to a developer’s bottom line, including financing, interest, margins, planning, materials, architecture, permitting, sales, utilities and taxes. And since Van Voorhis’ claim of union labor being more costly has been disproven, the argument that building a project non-union will have a net positive effect on rental rates is false. Ultimately, the market sets real estate rates – not the higher cost of non-union construction. If the real estate market is hot, but a developer was able to save costs, would he charge a lower rate?
Opinion articles like the one Van Voorhis purported to write generate dialogue and help us all judge important issues. Their danger comes when they are written without an ounce of fact. My fellow labor leaders understand we must repair a brand image that has been under assault by ideological adversaries for years. As productive professionals, we are proud of our work. Moving forward, it is our hope those with a vested interest in our demise can argue their points more responsibly, if not factually.
Michael Monahan is business manager of the 7,500-member International Brotherhood of Electrical Workers Local 103.
