The Truth About Project Labor Agreements

Dr. David Tuerck, Executive Director of The Beacon Hill Institute (BHI) and Professor and Chairman of the Department of Economics at Suffolk University, asked TheTruthAboutPLAs.com to post the following note and related correspondence to U.S. Congress in response to attacks by Dr. Peter Phillips, economics professor at the University of Utah, on BHI’s research on the impact of government-mandated project labor agreements (PLAs) on public construction costs.

Please note that all links have been added by TheTruthAboutPLAs.com.

Dear Mr. Brubeck,

I would like to bring to your attention a matter of considerable importance to the question of mandatory Project Labor Agreements (PLAs). As you know I testified against mandatory PLAs at a hearing conducted June 3 before the Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform of the Committee on Oversight and Government Reform of the U.S. House of Representatives.

In my testimony, I reported the results of studies in which the Beacon Hill Institute showed that PLAs increased construction costs for samples of schools built in Massachusetts, Connecticut and New York.

Note: Tuerck’s tesitmony starts at 22:13 of this video

I argued that our studies provide compelling evidence that mandatory PLAs generally increase construction costs and are, on that basis, not in the public interest.

You will also recall that, before I could testify, Representative Elijah E. Cummings read a statement from Professor Peter Philips of the University of Utah in which Philips claimed that our work was nothing but “simple minded statistics” that, in his judgment, do “not pass muster.” Unaware, as I was at the time, that this statement had been submitted to the Subcommittee and given the circumstances in which it was read to me and everyone else at the hearing, I could not respond adequately to Philips’ accusations at that time. Following the hearing, however, and with a written copy of Philips’ statement in hand, I wrote my response, attached here, and sent it to Congressman Cummings.

As you can see, I find Philips’ criticisms to be based on an entirely fabricated characterization of the methodology that we followed in our studies. I need to be emphatic. It is not as if Philips just disagreed with our interpretation of our statistical results, as economists often do in examining each other’s work. This was not a complaint, say, that our results suffered from some problem connected with sample selection or that they failed some standard test for robustness. This was a false characterization of what we did in obtaining our results. It would be as if one chemist tried to debunk another chemist’s findings by falsely describing the laboratory procedures followed in getting those findings.

It has now been a month since I wrote to Congressman Cummings. I have received no reply from him about the questions I raise. If, as it appears, neither Congressman Cummings nor anyone on his staff has asked Philips to clarify his remarks, then anyone who read the record of that hearing would be permitted to believe that there was substance to those remarks, when in fact there was none. Anyone could infer that our findings about PLA costs were spurious and could be ignored when in fact there was nothing presented at that hearing (or anywhere else, by my reckoning) that would support any such conclusion.

I am therefore compelled to take my case to a broader public. To that end, I hoped that you might be able to bring my letter to the attention of readers who follow ABC and its efforts to inform the public about government-mandated PLAs. Your help in this regard would be much appreciated.

Sincerely,

David G. Tuerck
Executive Director, The Beacon Hill Institute
Professor and Chairman, Department of Economics
Suffolk University

##

Here is more on the controversy from a post by BHI on the Red Mass Group blog, (BHI Weekly Dispatch: Taking on the D.C. union proxies on Project Labor Agreements,” 7/21/11).

Here is a key passage from Dr. Tuerck’s letter to Rep. Cummings in response to Dr. Phillips’ attacks:

In Phillips’ mindset, however, a project would never be more costly because it was conducted under a PLA.  The explanation would always lie elsewhere.  The project had a more complex roof.  Or it included an auditorium.  Or it had some other feature that increased the cost. Never mind if there were only a few bidders. Or if the contractor had to follow burdensome work rules.  Or if the contractor had to hire union workers instead of his own workers.  It just couldn’t be the PLA that was at fault.

Phillips’ approach to the PLA question reflects a compulsion, unhappily all too common among social scientists (and even some physical scientists), to hold stubbornly to one’s assumptions no matter what the data show.  That, in and of itself, is a bad enough fault to exhibit in criticizing someone else’s work.  In this instance, however, Phillips went beyond merely attempting to defend his assumptions against the data.  He made up an entirely fictitious story to discredit the work of someone whose data challenge those assumptions.

Be sure to give the full letter a read.

Print PDF