How Do Unions Impact Integrator Profitability?

A member asked a question about unions and how they impact integrators:

I want to know if integrators in heavily union controlled areas make more or less margins on jobs. I see that projects in right to work states have a lower cost. In union states, most sub out the labor. So, they lose that part of the sale even though they mark it up. I usually see a 15% mark up on union labor. I also see more union electricals getting in the business.

Anyone with experience in union areas able to provide feedback / insights?

I would say no, because it means they're probably going to jack up their labour sell rate to compensate for the extra costs. How ever if they are trying to compete with non-union companies they will probably lose some profit, given that on average unionized employees make $5/hour more than non-unionized. Sources on that stat all come from unions, I choose to believe it but I am pro-union.

Also electriciians getting into the security game probably won't be losing profitibility, but will also be charging a lot more, since the average journeyman in my area makes atleast 1.5 times the average security installer.

Unions always have a higher overhead and burden (15%) for the union

Usually at least 20-35% in ca. (answer) yes always cost more (union scale)

And if you go to the State & Federal websites you will see the P/W scale is much higher

Depends on what Project, Type Project, Where the Project is located, Demographics of the area

Average Example laborer: 12-15.00 normal vs union 25-45.00

After the economy dropped and many of the co's went to lowering the pay scale, and benefits this changed the view of the unions

I would say as a whole that union jobs have kept pace with the economy and protected their investments (their employees)

Not to say I like unions, but they are necessary to protect the workforce

The Common Employeers out their put more on the employees backs, shortened the work week, and went to outsourcing the labor pool, cutting moral, limiting incentives to stay and be a great employee.

This make's a weaker economy and a dumber labor pool, creating an environment of cheep labor or personnel. Requiring More, giving back less.

Something doesn't add up here:

unionized employees make $5/hour more than non-unionized - Daniel Tyrrell

I usually see a 15% mark up on union labor - Undisclosed Undisclosed

Average Example laborer: 12-15.00 normal vs union 25-45.00 - Christopher Freeman

which is well over 100% mark-up, different states maybe?

I'm in Canada, and my number is an average across all unionized employees, not just our industry.

Shocked this discussion has not blown up out of control!

I'm not a Union guy, but they always seem to compete. Usually they are attached to an electrical side. When it is an Union electrical contractor, the same can be said for Merit Shop electrical's, they can win bids by throwing in security and/or low voltage for next to nothing, as long as they win the large electrical package which can be 4-20+ times more than the security package. The low voltage division and security divisions of electrical's usually hate this, but they understand the electrical side is where their company profits and succeeds.

As for a security contractor who calls themselves Union, I would almost call that Union a BS union as it is basically a classification for them to get jobs or compete on jobs. This may be different in New York City, Chicago, Philadelphia and a few other historical union cities, but a majority of states where the Security Integrator is said to be part of a is just BS. I have seen security companies be Union in certain cities or states but not Union in others. (I'm talking the U.S. here)

If you're going to be a true Union, you should be Union throughout the company. I think a real Union guy would agree.

As for my response to anybody who attacks an electrical company doing security read below.

As for security companies that hate Electricals for doing this, put up with it, as that is the way it is. I keep hearing how electricals can't do the job. That could be true for small electrical's, but today the truth is, Electrical's have hired security people to run their security divisions or lead the security team within a low voltage division. It is security people doing the work and not electrical people within these companies.

You are 100% correct. When you have unions and GC in big citys youre markups are limited to 10% and 5% profit and overhead. If you are using unions to install without a GC there are no imposed margin limits. The rub is you have to pay union rates 120 per hour rather than your normal employee wages and overhead.

With the advent od IP cameras we see more work going to EC's with us doing parts and smarts.

Additionally, CWA cost less than IBEW; here in NYC the IBEW is dropping their rates to compete with CWA on a job by job basis. The workers take the lower rate but get a bit disgruntaled at the lower wages. THe EC's typically uses M (5th year apprentice) rated workers than A rated (journeymen) workers. M rated workers earn less than A rate, the result is lower rates all around and less grousing.

The playing field can be level because anyone installing at the site will have to use union labor if the shop is not a unionized shop.