As Labor Day approaches, it’s fitting that unions get the recognition they deserve for leading the fight to improve the lives of millions of Americans — union and nonunion alike — by providing access to the middle class and the American Dream.
Sadly, it’s getting harder and harder for today’s tradespeople to access the upward mobility that unions helped create.
A recent report by the University of California Berkeley Labor Center concluded that because of a decline in union membership in the construction industry, “construction workers should expect to continue to be exploited and cheated, and lawful contractors should expect to find it more and more difficult to remain in operation.”
In 1971, more than 42% of construction workers were in a union; by 2019, that number had fallen to 12.6%.
That decline in union membership has taken a severe toll on workers. According to the Berkeley report, nearly 4 out of 10 construction-worker families nationwide are so poorly compensated that they are forced to enroll in one or more safety-net programs such as Medicaid or the Supplemental Nutrition Assistance Program, also known as SNAP — a higher rate than that seen in the general population.
These poor wages end up costing all of us. In Pennsylvania, 28% of families of construction workers are enrolled in one or more safety-net programs, and these benefits end up costing the state and the federal government $428 million per year.
Compared with all Pennsylvania workers, construction workers are more than twice as likely to lack health insurance.
It is estimated that there are more than 2 million construction workers in the United States who work full time but are misclassified as “independent contractors,” which allows their employers to pay them in cash, without declaring the expense to the government. This is illegal, and enables the employer and worker to avoid paying taxes or benefits ― which costs federal, state, and local governments billions of dollars a year in lost tax revenue, according to the Institute for Construction Economic Research.
In states where there is ineffective or nonexistent enforcement of laws prohibiting employee misclassification, a tremendous financial incentive exists for unscrupulous employers, who save millions annually from reduced employee wages and nonexistent benefit costs. As a result, thousands of American workers are routinely underpaid and exploited by being kept “off the books,” with virtually no consequences to their employers.
Recently, the solicitor of the U.S. Department of Labor, Seema Nanda, said, “When employers misclassify workers as independent contractors, workers lose key rights and protections, hurting labor standards across the board and making it harder for law-abiding employers to compete on an even playing field.”
She’s absolutely right. Our union has been calling for stricter enforcement of existing laws that prohibit misclassification.
From the start of the labor movement in America, activists have said workers should be entitled to a family-sustaining wage and sufficient medical coverage with pensions when they retire. Misclassification is not only illegal and robs workers of hard-earned wages — while also cheating governmental taxing authorities — it’s exploitation on a number of fronts that robs hardworking human beings of their dignity.
While we applaud elected officials who are standing up to these tax cheats, more must be done throughout the country to stop this exploitation.
It’s time our elected officials at all levels take action to stop this theft of much-needed tax revenue. It’s time to enforce our laws and stop the tax cheats from exploiting and taking advantage of their fellow Americans.