An editorial in today’s Boston Globe decimates flimsy arguments in favor of government-mandated project labor agreements (PLAs) and skewers Mass. Gov. Deval Patrick (D) for requiring PLAs on major state projects, including the Whittier Memorial Bridge, which TheTruthAboutPLAs.com covered last week (“Project labor agreements: Mass. taxpayers lose again,” 7/24/12):
Although it lacks any compelling reasons for doing so, the Patrick administration is continuing to impose project labor agreements on some major state projects. Those agreements restrict work to contractors who agree to use union labor and abide by union work rules, effectively excluding the state’s nonunion firms and nonunion workers, and raising costs at a time when the state’s transportation coffers are already running dry. [snip]
Now, several studies have indicated that these agreements push the price of construction projects up significantly. When the Beacon Hill Institute, Suffolk University’s market-oriented think tank, looked at school-construction projects in Massachusetts, Connecticut, and New York, it found that PLAs had added at least 12 percent to construction costs. Other studies have suggested that limiting bidders boosts prices even more. Unions dispute such conclusions, but the usual effect of restricting competition is to increase prices. The net result is that, because of the labor agreements, the state will end up spending tens of millions of dollars that could otherwise have been directed toward other road projects or toward long overdue transit repairs.
On the Whittier Bridge project, as with the Longfellow project, the administration’s rationale has been thin and unpersuasive. An internal analysis cited the “size and complexity” of the project, the risk of labor unrest, and importance of keeping to a schedule. But state Transportation Secretary Richard A. Davey conceded to the Globe that nonunion contractors and workers were capable of doing the work. Nor could he cite any instances of labor problems delaying highway projects. Anyway, if union workers had created havoc on a project awarded to a nonunion firm, why reward such activity by granting union firms exclusive rights to future work?
The editorial continues by identifying the real reason behind these Big Labor favors and explaining the unfortunate results on the Commonwealth’s taxpayers and construction industry when these special interest schemes are mandated by politicians:
The most plausible interpretation, however, is that Patrick is simply rewarding unions for past political support — and for the help Democrats want in this election year. But political considerations aren’t legitimate grounds for even an occasional PLA. And the longer-term political consequences are unpredictable: If the administration continues to foster the impression of profligacy, it could undermine the crucial effort to secure more highway and transit funding.The state will end up spending tens of millions of dollars that could otherwise have been directed toward other road projects.
If project labor agreements are unfair to taxpayers, they are also unfair to the thousands of nonunion construction workers in the Commonwealth. Those workers and the firms that employ them aren’t asking that construction jobs be designated specifically for nonunion firms. Rather, they are simply seeking to compete on a level playing field for state work.
What an editorial. It exposes numerous facts about government-mandated PLAs worth listing again:
PLA mandates increase costs. Check.
PLAs result in fewer construction projects and construction jobs. Check.
Merit shop contractors and tradespeople are capable of building large-scale projects. Check.
PLAs offer little value against strikes because strikes are rare. Check.
PLAs are extortionary and monopolistic market protectionism schemes. Check.
PLAs are politically motivated special interest handouts to Big Labor. Check.
PLAs are not in the best interests of Commonwealth taxpayers. Check.
PLAs discriminate against Commonwealth merit shop firms and employees. Check.
PLAs are unfair and inject special interest favoritism into competition for taxpayer-funded jobs. Check.
Kudos to the The Boston Globe editorial board for telling the Truth About Project Labor Agreements.