From the NY Observer:
In recent months, talk of reducing costs has dominated the efforts of union and contractor leaders, as both have been seeking a citywide agreement to cut the high labor costs through streamlining. The next few weeks will likely prove critical in this effort, as many involved in discussions say unions and contractors are aiming to reach an accord on cost-cutting measures for a handful of major projects in the city that risk delay.
The level of construction in New York is soon to drop off a cliff, a plunge that will leave many a contractor and union member desperate for work. While construction is still at relatively high levels as projects move toward completion, the economic collapse and accompanying credit freeze has dried up the once plentiful well of new work, as even those developers still willing to build apartment towers cannot find banks willing to lend.
All corners of the industry are eager to see work continue, so numerous groups have come together to hone in on one main factor that is within their control: the cost of labor.
Labor can comprise about 50 percent of the cost of a construction job, so developers have warned that without major drops in costs—25 percent is the target—those few current projects on the books may have to be scrapped.