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American workers can take pride in being the most productive workforce in history. They are the linchpin in an economic system that is the envy of every nation. Unfortunately, however, the joy of this good news is not shared by all workers, especially those minority construction workers who have been shut out of the marketplace. Discrimination by unions that often control the supply of labor has limited their opportunities for employment, economic advancement, and personal fulfillment.
The boom of new construction work planned for Metro Detroit has cast a new spotlight on the discriminatory practices of organized labor. New Detroit, a coalition of civic and corporate leaders addressing the Motor City's racial problems, released statistical data in June showing that only 3 percent of southeast Michigan's construction union members are minorities.
Discrimination against minorities by Big Labor is not just a local problem. Nationwide, a paltry average of 8 percent of construction union members are minorities, even though blacks and Hispanics make up about 23 percent of the general population. But Detroit's mere 3 percent is particularly notable because Detroit's "minorities" (primarily blacks and Hispanics) are actually a majority within the city-80 percent of the population. Labor union discrimination may be showing up in the form of these wide disparities.
Unions have a long history of petitioning government for special protections from competitive nonunion firms, especially in the skilled trades and construction industries. The result has been a kind of institutionalized racism. For example, the Depression era Davis-Bacon Act-which mandates that prevailing (union) wages be paid on all federal construction projects-was originally passed to protect Northern, and predominately white, unionized construction workers from the Southern, black, nonunion construction workers who were underbidding the union firms. Unions continue to fight to preserve this law despite the fact it serves no worthwhile social or economic purpose.
In 1944, the U.S. Supreme Court decided a case involving union negotiated contracts that set a ceiling on the amount of work that could be performed by black workers and even eliminated black workers from certain positions. Concurring with the majority which ruled against the unions, Justice Murphy wrote that "the Constitution voices its disapproval whenever economic discrimination is applied under authority of law against any race, creed or color."
Insidious discrimination has flourished in the union hiring halls. Unions in the construction industry have been granted special privileges under the labor laws to operate exclusive hiring halls and referral arrangements to supply labor on construction projects. The hiring-hall arrangements in building trades labor agreements limit employers to hiring individuals referred by the union. Unfortunately, discrimination prevents many minorities from ever becoming union members in the first place, which deprives them of training in apprenticeship programs and, ultimately, of jobs.
Occasionally, these discriminatory practices come back to haunt the unions because, as appears to be the case in the Detroit stadiums project, the unions are unable to supply the necessary skilled labor to meet building requirements. Construction unions are cartels: they lift wages above what the free market would pay by using their monopoly power over firms to say who can be hired and what wage they can earn.
Local governments have attempted to address this problem by mandating racial quotas, goals and timetables in publicly financed projects. Designed to guarantee a percentage of minority workers the opportunity to work on local jobsites, these "quick-fixes" are largely ineffective and constitutionally suspect. They also raise construction costs, and do not address the fundamental problem of continuing discrimination against minorities.
One alternative that promises to accomplish far more good would be to end the unions' monopoly power in public construction by getting rid of "project labor agreements," which mandate that all contractors must employ members of a designated union for all labor performed on the site. These "union-only" agreements are frequently agreed to by state and local governments in Michigan in order to guarantee labor peace during the life of the contract, but the premium paid for this peace also permits union discrimination to persist.
Big Labor has proudly stood at the forefront in the civil rights movement in advocating equal opportunity for all, but progressive talk is hardly a substitute for concrete action. Labor organizations should take dramatic steps to correct the systemic racial problems that persist among some of their locals. The union movement is responsible for cleaning its own house by breaking down the barriers to racial equality and economic justice.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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