The Truth About Project Labor Agreements

The Wall Street Journal published an editorial praising New Jersey Gov. Chris Christie’s (R) veto of legislation (S. 2425) expanding New Jersey’s ability to mandate union-favoring project labor agreements (PLAs) on taxpayer-funded projects like roads, bridges, water treatment facilities and other large-scale infrastructure projects (WSJ editorial, “Sandy’s Union Blowback: Christie keeps veto promise,” 4/16/13):

New Jersey unions wanted a monopoly on Hurricane Sandy reconstruction, but Governor Chris Christie put a stop to that scheme on Monday when he vetoed a bill that would have favored unions on all state public-works projects over $5 million.

The bill would have expanded the state’s ability to mandate the use of so-called project labor agreements, or PLAs, on taxpayer funded projects including roads and bridges. Mr. Christie wrote in his veto message that the bill would “significantly alter public contracting in this State” when the focus should be on rebuilding.

Unions are fond of PLAs because they usually force all contractors to hire workers at union hiring halls and pay into union benefit plans, discouraging non-union firms from bidding on jobs. New Jersey Democrats, including Senate President Stephen Sweeney, say mandating PLAs would have given more jobs to New Jerseyites. That’s curious math, when some 75% of the state’s private construction workforce isn’t unionized.

The real goal is to kick more business to unions and expand their market share. Projects run with PLAs take longer and cost more, but they also squeeze workers by forcing non-union workers to pay union dues to work on a taxpayer-funded project. Under current law, unions can still bid on Sandy reconstruction projects, but they’ll have to do so in open and competitive bidding.

The Obama Administration encourages PLAs on federal projects over $25 million, but 15 states currently ban the use of PLA mandates and the line of scrimmage may be further shifting against PLAs. Last week, North Dakota became the 11th state to prohibit their use since 2011, and Georgia, North Carolina, South Carolina and Texas are also considering laws that would restrict PLA mandates.

Mr. Christie has been collecting endorsements from unions for his re-election bid this year, but he has long said he wants to “fix” the problems created by PLAs. We’re glad to see him doing his part.

This veto is a win for New Jersey’s merit shop contracting community and for federal, state and local taxpayers.

(TheTruthAboutPLAs.com covered the news Monday here).

In January, Congress passed a $51 billion Hurricane Sandy relief bill stuffed with money for federal and federally assisted construction projects procured by federal agencies and state and local authorities.

President Obama’s pro-PLA Executive Order 13502 encourages federal agencies to mandate PLAs on large-scale construction projects exceeding $25 million in total costs.

Had S. 2425 been signed into law, New Jersey’s qualified nonunion contractors and their skilled employees would have been effectively locked out of rebuilding the Garden State whenever PLAs were mandated by government entities on federal, state and local projects.

Increasing competition, reducing costs and restricting handouts to special interests is always good policy.

The chief sponsor of S. 2425, New Jersey Senate President Stephen M. Sweeney (D), makes $207,000 a year as a paid organizer for the International Association of Ironworkers (BSOIW), a union whose members typically benefit from PLA mandates on public construction projects. New Jersey Ironworkers’ locals, in particular, would profit from this proposed expansion of New Jersey’s pro-PLA law (which currently allows government-mandated PLAs only for state buildings on a case-by-case basis) because they often perform significant work on bridge projects. Absent a PLA, this work could be assigned to contractors signatory to other competing trade unions, or qualified nonunion contractors and their employees through a normal competitive bidding process.

This an egregious example of a lawmaker engaged in unethical conduct. Why isn’t this troubling to New Jersey citizens, lawmakers and government watchdogs?