Taking the High Road in Prince George’s County

The Role of Worker Representation in Economic Development Strategies

The following is a summary of the report. Download the full report. Some numbers in this report were updated in September 2017, after the report was originally published.

Key Takeaways

• Prince George’s County has promising opportunities for growth, and local development policies can influence which direction that growth takes:
  

  Benefits of Union Representation The Maryland Center on Economic Policy analyzed the potential benefits to workers and the community of union representation at the MGM National Harbor. This analysis compared a hypothetical no-union scenario to one in which all non-managerial, non-supervisory workers were assumed to be in a union. This analysis found that if all eligible workers at the MGM National Harbor are represented by a labor union, the potential benefits to workers and the economy are substantial: Represented construction workers earn an additional $9,000 per year. Represented accomodation workers earn an additional $6,000 to $19,000 per year. Union workers spend more at local businesses, adding $23 million  to $74 million in earnings to the local economy. Increased spending translates into increased employment, adding 111 to 360 new jobs to the local economy.

  • Low-quality jobs and increasing inequality
  • A local economy that works for everyone
  • The local economy is stronger when the workers at new developments join together in a labor union:
    • Workers earn better wages and benefits
    • Local businesses have greater sales and may increase hiring
    • The benefits of growth are broadly shared
  • When public resources are invested in a development project, local governments can use project labor agreements and labor peace agreements to protect their interests and promote constructive labor relations.

Unions Raise Wages and Improve Benefits

• Economic research finds that union wages are about 23% higher than wages for comparable nonunion workers.[i] Data from Prince George’s County indicate union hotel workers may earn up to 68% more than their local counterparts who are not union members.[ii]
• Union representation at the MGM National Harbor likely means an additional $6,000 to $19,000 per year for average workers.
• Studies find that when more workers in a region are union members, employers must offer better wages to remain competitive. As a result, nonunion workers also get a raise.[iii]
• Unions are even more effective in getting workers the benefits they rely on, from health insurance to paid sick days to pensions.[iv]

Unions Strengthen the Economy

• Research shows that union workers stay at their jobs longer and often work more efficiently, which leads to lower costs.[v]
• When workers win decent wages through a labor union, they have more money to spend at local businesses. This money circulates through the economy, boosting earnings and creating jobs along the way.
• Well-paid workers pay more in income taxes and have less need for social assistance, which means more room for local governments to invest in things like schools, roads, and parks.

[i] MDCEP analysis incorporating QCEW, OES, CPS data, 2015 BLS Union Members Summary, and RIMS II multipliers from the Bureau of Economic Analysis. See the technical appendix of the full report for details.

Constructive Labor Relations Maximize Gains

• The benefits of union representation are greatest when labor and management share a constructive relationship.[vi]
• Project labor agreements and labor peace agreements can protect local governments’ proprietary interests and reduce conflict.
• Prince George’s County has legal mechanisms for using PLAs and LPAs when appropriate:
  • The county executive may execute a PLA on any county capital project exceeding $1 million[vii]
  • The county executive must determine whether each development project creates a proprietary interest and whether an LPA is appropriate to protect that interest[viii]

[i] Barry Hirsch and Edward Schumacher, “Unions, Wage, and Skills,” Journal of Labor Economics, 2002, quoted in Matthew Walters and Lawrence Mishel, “How Unions Help All Workers,” Economic Policy Institute, August 26, 2003, http://www.epi.org/publication/briefingpapers_bp143/.

[ii] MDCEP analysis of Quarterly Census of Employment and Wages and Occupational Employment Statistics data. See technical appendix of full report for details.

[iii] Walters and Mishel, “How Unions Help All Workers.”

[iv] Brooks Pierce, “Compensation Inequality,” Office of Compensation and Working Conditions, Department of Labor Working Paper No. 323, 1999, quoted in Walters and Mishel, “How Unions Help All Workers.”

[v] Michael Reich, Peter Hall, and Ken Jacobs, “Living Wage Policies at San Francisco Airport: Impacts on Workers and Businesses,” IRLE Working Paper 98-03, November 2003, http://irle.berkeley.edu/files/2003/Living-Wage-Policies-at-San-Francisco-Airport.pdf.

[vi] Dale Belman, “Unions, the Quality of Labor Relations, and Firm Performance” in Unions and Economic Competitiveness, ed. Lawrence Mishel and Paula Voos (New York: M.E. Sharpe, 1992).

[vii] Prince George’s Cty., Md. Code of Ordinances Subt. 10A, Div. 6, Subdiv. 13, §10A-158.

[viii] Prince George’s Cty., Md. Code of Ordinances Subt. 10, Div. 18, §10-293.