Declining Unionization in Construction: The Facts and the Reasons

This paper documents and examines the forces behind the decline of unionization in the construction industry. The proportion of construction workers belonging to unions has dropped from slightly less than one-half in 1966 to less than one-third in 1984. The employment share of union contractors has declined even further because of the fraction of union members working in the open shop rose from 29 to 46 percent between 1973 and 1981. Initially, an important factor in the initial decline in percentage unionized was the growth in the union-nonunion wage gap between 1967 and 1973. However, the gap did not widen any further after 1973 and actually has narrowed substantially since 1978. A key subsequent factor has been the erosion of the productivity advantage of union contractors, which dropped substantially between 1972 and 1977 and vanished by 1982. The decline of unionization is unrelated to changes in worker characteristics or changes in the mix and location of construction activity.