The Truth About Project Labor Agreements

According to a press release by the Beacon Hill Institute at Suffolk University, in Boston Mass., a new poll of Massachusetts voters indicates the public opposes a key provision of typical PLAs.

A new survey conducted by the Suffolk University Political Research Center for the Beacon Hill Institute shows that 69% of Massachusetts voters oppose a requirement under which private contractors who perform public projects must hire workers through union hiring halls. The finding is important because the requirement is a key feature of Project Labor Agreements (PLAs), which are strongly favored by construction unions for conducting public projects.

Last year, President Obama issued an executive order encouraging the use of PLAs on federal construction projects. The order is controversial in part because PLAs require contractors to use labor provided by the unions, whether or not their own workers are union members.

Proponents argue that PLAs guarantee the availability of a skilled workforce and labor “peace.” Opponents argue that nonunion workers are just as a skilled as union workers and that the requirement puts nonunion contractors at a competitive disadvantage, penalizes the vast majority of construction workers, who do not belong to unions, and increases construction costs. Worries about labor peace, say opponents, are an empty threat.

Opposition to the idea of requiring construction contractors to hire through union hiring halls runs counter to voters’ otherwise sympathetic attitudes to unions. The same survey showed that a majority (52%) of Massachusetts voters have a favorable opinion of unions. It also found that only 19% of voters believe that public sector union workers are overpaid.

The requirement that construction contractors hire their workers through union hiring halls is opposed by almost every segment of the electorate. Eighty‐eight percent (88%) of Republicans, 76% of Independents and 52% of Democrats oppose the requirement. Even among households with union members, 59% are opposed. Opposition is consistent across voters segmented according to age, gender, race and attitudes toward candidates for governor and the U.S. Senate. Only the 15% of voters who have a “very favorable” view of unions support the requirement.

The survey suggests that public opinion of project labor agreements may be sensitive to perceptions about the degree to which construction workers are unionized. Seventy‐three percent (73%) of the respondents estimated that the fraction belonging to unions is 40% or more. In fact, only about 20% of private construction workers in Massachusetts belong to unions. Respondents were given this fact before they were asked about hiring through union hiring halls.

David G. Tuerck, Executive Director of the Institute said that “elected officials who must decide whether to enter into PLAs on public construction projects should be interested in the results of the survey. Apparently, when voters are informed of the facts concerning union membership, they do not support a key feature of PLAs.”

The statewide survey of 500 Massachusetts registered voters was conducted Feb. 21‐24, 2010.

The margin of error is +/‐ 4.4 percent at a 95 percent level of confidence. Cross-tabs.

See The Boston Herald for additional coverage, (“Poll: Don’t Mandate Unions on Projects,” 3/4/10).

While some PLAs permit a nonunion contractor to use a limited number of their core workforce (usually the lesser of 8 employees or 12 percent of the trade’s total workforce), most PLAs require an all-union workforce.

For those few nonunion employees that work on a PLA project, PLAs require that they are hired through the union hiring hall where they are often subject to union intimidation to join a union. While on the jobsite, PLAs force nonunion employees to follow unfamiliar union work rules and pay union fees for the life of a PLA project. 

Employer contributions to employee benefits must be paid into labor-management (union) run plans rather than existing plans offered by their nonunion employer. Employees will forfeit these contributions earned for hours worked on a PLA jobsite to the union plans unless they join a union and become vested. 

A 2009 study by Dr. John R. McGowan, “The Discriminatory Impact of Union Fringe Benefit Requirements on Nonunion Workers Under Government-Mandated Project Labor Agreements” found that nonunion employees of nonunion contractors that are forced to perform under government-mandated PLAs suffer a reduction in their take home pay that is conservatively estimated at 20 percent because of the “pension” provision in typical PLAs.  Hundreds of millions of dollars of their income would be distributed to union pension funds, from which the nonunion workers will receive no benefits. It’s no wonder why nonunion contractors and their employees oppose PLAs.

The study found that had President Obama’s pro-PLA Executive Order 13502 applied to federal contracts in 2008, additional costs incurred by employers related to wasteful PLA pension requirements would likely have ranged from $230 to $767 million per year. In total, the move to PLAs could cost nonunion workers and their employers $414 million to more than $1.38 billion annually.

In short, nonunion employees experience a Big Labor shakedown on PLA projects.

Big Labor will be quick to refute this poll with arguments that PLAs don’t require an all-union workforce and nonunion contractors can bid on PLA projects. While both claims may be technically true, the reality is that PLA proponents must rely on distorted facts instead of superior value and performance to secure work for their members and regain lost market share.