We can build faster by choosing contractors who invest in workers

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OPINION — California has no shortage of infrastructure needs. From schools and roads to water systems and clean energy projects, maintaining the infrastructure that supports the world’s fourth-largest economy is a non-negotiable public imperative.

But how do we make sure these projects get done right?  How do we control costs and make sure projects are completed on time?

In California, these projects are typically awarded to bidders promising to get the job done for the least amount of money.  That’s intended to protect taxpayers, but the lowest bid doesn’t guarantee the best result. Construction projects rarely go exactly as planned, especially in an era of supply chain disruptions, inflation and labor shortages.

In a new study of Sacramento County public works projects, my colleague Dr. Matthew Hinkel and I find that union signatory contractors consistently deliver superior outcomes — both on cost and timeliness. This is because union signatory contractors have made long-term, binding commitments to apprenticeship training, safety and job quality.

The report analyzed 128 public works projects completed in Sacramento County between 2018 and 2022, including infrastructure, public buildings and schools. All told, 75 projects were led by union signatory contractors, and 53 were led by non-union contractors.

Across all projects, final costs averaged about $236,000 higher than starting costs. But that overall figure masks a dramatic difference.

Projects led by union signatory contractors saw average increases of just over $41,000.  Projects led by non-union contractors experienced average cost increases more than ten times higher ($511,000).

The timeliness results told a similar story. Across all projects, the average time to completion was 274 days. Union-led projects were completed in 268 days on average, compared with 283 days for non-union-led projects.

In plain terms, union-led projects finished more than two weeks faster.

Of course, simple averages only tell part of the story. Construction projects differ in size, type, location, agency and complexity. That is why the study included industry-standard regression analyses to control for these variables.

Once we did, we found that projects led by union signatory contractors still had substantially smaller cost increases and were completed 14 to 22 percent (or 38 to 60 days) faster than the non-union alternative.

Here’s why these findings should matter to every California taxpayer. Public debate often treats labor standards as if they are obstacles to efficiency. The assumption is that better wages, benefits, safety practices and apprenticeship training must make projects more expensive.

Our research points in the opposite direction. Higher labor standards and better project performance go hand in hand.

There are practical reasons why. Project success depends on reliable pools of trained workers, and research has consistently shown that unionized construction sites carry less risk of labor shortages, higher rates of workforce productivity and superior safety outcomes.

This ultimately reduces the risk of delays, injuries, mistakes, and workforce supply problems that can otherwise throw projects off track.

The secret to union contractors’ success is the workforce development and supply system it funds and operates in partnership with its trade unions, which supports more than 90% of registered apprenticeships in the Golden State.

Every hour that a union tradesperson works generates funding to train the next generation of career carpenters, ironworkers, electricians, heavy equipment operators, laborers and cement masons.

The non-union side of the industry lacks this institutionalized workforce training and supply framework. And while those costs may not show up on a non-union contractor’s bid documents, they may often be reflected in the form of cost overruns and later project completion times.

At a time when construction costs are elevated, labor shortages remain real, and California investing billions in housing and infrastructure, the state cannot afford to ignore what works. Public agencies should evaluate contractors not just on the lowest number at bid time, but on the ability to deliver the project taxpayers were promised.

The lesson from Sacramento County is clear: investing in workers is not a detour from cost control or timely project delivery. It is a key part of how cost control and timely delivery are achieved.

Larissa Petrucci, PhD is a policy and research analyst at NorCal Construction Industry Compliance.