The Truth About Project Labor Agreements

Longtime readers of this blog remember that a PLA requirement was adopted by the San Diego Unified School District for all projects funded by Proposition S, a $2.1 billion voter-approved school construction bond.

We have already seen this PLA requirement lead to expensive cost increases. Media reports now find that projects covered by the PLA requirement are also failing to achieve local hiring goals as well. Here is an excerpt from last Friday’s San Diego Union-Tribune:

The San Diego school district has failed to meet the hiring goals of its labor pact, which promised to employ local workers to build and repair campuses under its $2.1 billion construction bond measure.

The district rolled out its project labor agreement two years ago over the objections of the construction industry, pledging to give jobs to locals whose children might attend San Diego schools.

The union-friendly plan called for contractors to hire all of their crews from San Diego County, with 70 percent living within the boundaries of the San Diego Unified School District, and 35 percent from some of the poorest ZIP codes.

A district review of the actual hiring shows that 95 percent of the workers live in the county. Thirty-two percent live within district boundaries, less than half of the 70 percent goal. About 20 percent live in City Heights and the other specified low-income ZIP codes, below the goal of 35 percent.

The labor pact initially mandated local hiring provisions, but the agreement was softened before adoption in 2009 to call for employment goals.

[Snip]

Jim Ryan, executive vice president of the Associated General Contractors Association San Diego chapter, said the hiring goals were included in the pact for political purposes — to make the agreement more appealing. He said the goals are out of reach, in part, because they defy some union hiring rules that award jobs to workers on a priority list that does not take into account residency.

“It sounded great but it was never practical,” Ryan said.

The San Diego school board voted in March to spend $86,350 to hire consultants to conduct a study to determine the effectiveness and impact of the labor pact. The report is expected to be complete in October.

This is further evidence that this PLA requirement is a bad deal for school district residents.

In fact, San Diego County residents already recognize that PLAs are a not in their interest and have voted to ban government-mandated PLAs all three times bans have been on the ballot (Chula Vista, Oceanside and San Diego County)

The local hire struggles on Proposition S funded projects are just more evidence debunking Big Labor’s claim that PLAs guarantee local hire.  They don’t.

Here is an excerpt from our August 5, 2010 post that explains why this is the case:

An article in yesterday’s San Francisco Examiner demonstrates that PLAs can’t guarantee local hire because union hiring rules can’t guarantee local hire (“Union allocation is roadblock to local hiring,” 8/4):

SAN FRANCISCO — City residents are landing more construction jobs on San Francisco Redevelopment Agency projects, but union practices still keep some from working.

The City and the Redevelopment Agency, a state bureau that oversees massive building efforts, aim to provide half the work on construction projects to San Francisco residents.

But those goals are rarely achieved, prompting some activists and politicians to push for a law that would fine contractors when city residents perform less than half the work on a locally funded project.

Mayor Gavin Newsom would support such legislation if it’s achievable given the constraints of unions’ collective bargaining agreements and the poor economy, mayoral spokesman Tony Winnicker said.

Less than 25 percent of work on 29 San Francisco-funded construction projects went to locals, a city-funded research report published Monday showed.

[snip]

But with tens of billions of dollars worth of construction planned in San Francisco, including the building of new Hunters Point neighborhoods, city and agency officials said unions hold the key to achieving 50 percent local hiring rates.

“There’s no way we’re going to meet the goal without relationships with the building trades,” Redevelopment Agency Executive Director Fred Blackwell said at the bureau’s meeting Tuesday.

That’s because construction workers are generally assigned to jobs by unions, not contractors.

“We cannot legally determine our membership by where they live,” San Francisco Building and Construction Trades Council Secretary-Treasurer Michael Theriault said. “Hiring is generally done under the principle that the worker who has been out of work longest has first crack at the work.”

Theriault is involved with a city task force that’s exploring ways of boosting the local work force through labor agreements and other measures. The group next meets Thursday.

That quote from a Big Labor Boss is accurate. Union membership and hiring hall rules can’t guarantee a local workforce for public projects. PLA advocates claim special language within PLAs can help establish local hiring goals (not mandates) that can help with local hire.  But so can clauses in contracts without all of the discriminatory and costly baggage contained in typical PLAs.

It is not uncommon for a city or state to experience a lack of job creation for local residents when Big Labor has control of an urban or regional construction market with help from politicians beholden to Big Labor’s special interest agenda.

PLAs fail at local job creation. It is just that simple.

The local hire issue is just a Big Labor smoke screen to deflect reasonable people away from the real issue, that government-mandated PLAs are special interest handouts that deprive the vast majority of the construction workforce that chooses not to join a labor organization of the opportunity to compete for projects funded by their own tax dollars.