Stephen Smith of the Center for Building in North America has written a report, summarized in a New York Times op-ed, that does an international comparison of the elevator industry. In the rest of the developed world, the elevator industry has become more standardized over time, with international best practices leading to lower costs and easier installation. In the U.S., a strong labor union and government regulations have made it more expensive and more difficult to install an elevator, or even maintain ones that already exist.
The disparity between the U.S. and everyone else is stunning. According to Smith’s report:
“The International Union of Elevator Constructors is one of the most powerful construction unions in North America, and it resists trends like preassembly and prefabrication, creating more work and causing further tightening in the labor market,” the report says.
It’s common in wealthy countries for the construction industry to be dominated by immigrants. That’s true in the U.S. for many subsectors of the construction industry, but not elevators. The elevator industry is “almost completely closed to undocumented immigrants due to licensure and union rules, and the country lacks essentially any legal immigration pathway for construction workers,” the report says.
The IUEC also limits labor-market entry for Americans, by controlling access to apprenticeships, in an effort to keep labor supply low and pay for its members high. It has succeeded in securing the highest pay for any construction trade in the U.S., with average wages over twice as high as the median U.S. worker. On top of an average wage of $47.60 per hour, elevator workers make $35.25 per hour in benefits.
The IUEC compounds the problem of low labor supply by also pushing for mandates that require workers to do more work than they need to. This union practice, known as “featherbedding,” is technically illegal in the U.S., but the law is difficult to enforce, and politicians often lack the will to even try to enforce it.
The IUEC contract mandates work that could be done in a factory be done on the job site, by its members. “We can’t afford to sit back and see our trade dumbed down through factory prefabrication and preassembly to a point where all our members will have to do on the job is simply uncrate the elevator, set it, and plug it in,” IUEC president Dana Brigham said in 2011. Heaven forbid elevators be easy to install.
The union is so committed to never seeing productivity rise that it has spurred the creation of practices where workers undo and redo work. Global manufacturers build to global standards, which are much more amenable than the standards set by the IUEC. It has been ruled lawful for elevator builders in the U.S. to buy from the world market, so long as they disassemble any prefabricated components that IUEC members are required to build, so that they can reassemble them on the job site. This is a “dirty secret” of the industry, according to the report.
Elevator manufacturers “prefer to drill holes in parts before they arrive on site, to take advantage of the cheaper labor and more controlled conditions in factories,” the report says. But the IUEC has fought hard to keep the drilling of holes for its members. A 2019 labor agreement “lays out in exacting detail which holes required for the installation of the drive machine support structure can be drilled in the factory (‘for alignment,’ the agreement specifies, hinting at the superior accuracy and quality control of factory work), which can be drilled in the field, and which can be a mix of both – a smaller ‘pilot hole’ drilled in the factory to ensure proper placement, to be enlarged on site by a union elevator constructor.”
Elevator manufacturers have also simplified the electrical work in their products, which is permitted everywhere except the U.S. One manufacturer lost in arbitration with the IUEC over having too much prefabricated wiring in one of its elevator models. The arbitrator ruled that the manufacturer had to have less of the wiring complete if it wanted to continue to sell that model in the U.S.
Want to get around the IUEC? You can’t. It has a master contract with all major elevator manufacturers in the U.S. It controls the apprenticeship program that trains elevator workers. And, as is commonly the case with overpowered craft-wide labor unions, the IUEC colludes with the major elevator companies to keep competition out.
The IUEC maintains a fund that can subsidize worker pay for projects where non-union firms might be able to undercut it. The union also works with manufacturers to push licensure laws that meet union standards.
The report also details how the U.S. market is different from the rest of the world due to government regulations. European elevator regulations became more unified between European countries, and then most other countries adopted European rules, except the U.S. and Canada. So now there is a global market for elevators, based on the European regulations, and an isolated North American market.
U.S. elevator regulations also vary greatly within the country, which is also unusual. Local rules often mean that manufacturers essentially have to approach many U.S. elevator projects as unique, rather than being able to produce standard units at lower costs. Each state produces its own standards, and big cities are often excluded from the state standards and set their own regulations.
New elevators in the U.S. are also now required to have two-way audio and visual communication devices for people who might get trapped, a significant step up from the typical call buttons in most elevators. That new regulation has added about $5,000 to the cost of a new elevator, plus an additional $50 per month for operations, the report says. It’s also a new thing that can break, which must be fixed with union labor.
The different regulations in the U.S. have not led to measurably safer elevators for riders than in Europe. (The report suggests that workplace safety for elevator workers in the U.S. is slightly worse than in Europe.) But they have driven up costs and prevented the U.S. from taking advantage of improvements in global manufacturing processes.
Higher costs mean lower supply, and sure enough, the report finds that the U.S. has fewer elevators per capita than almost any other developed country. As the population ages, installing or retrofitting elevators will become more desirable in many buildings, but high U.S. costs will make that difficult, all to satisfy a powerful union and a patchwork of regulatory authorities.